A fundamental aspect that must be considered when making a financial decision is that of taxation. Thus, it is necessary to know the tax treatment of the different returns received in savings and investment transactions. Likewise, the tax implications in the case of carrying out credit transactions must be borne in mind.
For any State to be able to meet the government expenditure that it necessarily incurs, it needs funds called public revenues. Therefore, public revenues are understood to be any amount of money received by the State and other public bodies whose essential objective is to finance public expenditure (health, education, etc.).
The main instrument for collecting such public revenues are taxes. Although the main purpose of taxation is to enable the financing of government spending, it can also be aimed at satisfying other public objectives: Promoting certain activities, fostering job creation, stimulating the economic development of a certain geographical area, etc.
Fiscal revenues are classified into dues and fees, special levies and taxes, which can be differentiated according to their respective taxable events (real-life assumptions in which each fiscal revenue is applied):
- Dues and fees: Its taxable event consists of the exclusive use or special use of the public domain, the provision of services or the performance of activities under public law that refer, affect or benefit the taxpayer in a particular way, when the services or activities are not a voluntary request or reception for taxpayers, or are not provided or performed by the private sector.
- Special levies: Its taxable event consists of generating a profit or an increase in the value of the assets of the taxpayer because of the performance of public works or the establishment or expansion of public services.
- Taxes: Tax figures imposed without consideration, whose taxable event is constituted by businesses, acts or facts of a legal or economic nature that show the economic capacity of the taxpayer.
Of these three aforementioned categories, the tax is by far the most important, since it generates the highest tax collection.
Taxes can be classified in different ways. One of the most common classifications is the one that differentiates between direct and indirect taxes:
- Direct taxes. They tax the direct manifestation of the economic capacity of the taxpayer.
- Indirect taxes. They tax the consumption or use of any good without taking into account the economic capacity of the taxpayer.
