What is a Tax Rebate
A tax rebate is a refund on taxes that individuals or companies receive, when their tax liability is less than the taxes they actually paid. Taxpayers are frequently subjected to paying a higher amount in tax than the one they are due to pay, mainly because they might not be registered under the correct tax code or bracket, which results in paying the wrong amount of tax.
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Tax rebates explained
Tax rebate is a term used to describe the monetary refunds paid to an individual or company at the end of the financial year, in the event that they have paid a higher amount of tax then they are due to pay. Taxpayers need to apply for a tax rebate through the appropriate claim form to their local tax authorities. Tax authorities then, will assess the amount of tax paid against the tax due and send them a cheque with the difference.
Each jurisdiction around the world sets their own specific tax rates on corporations and individuals, which are usually dependent on the tax payers’ yearly income. Sometimes though, companies are not registered under the correct tax code, or the workers’ employer has not categorized them under the proper tax bracket, resulting in paying a higher amount of tax.
Tax authorities issue their tax rebates after collecting information from individuals or companies with regards to their financial year. It is therefore imperative that companies and individuals constantly update their systems with the latest data so that tax authorities can categorize them in the appropriate tax bracket, especially in the event that they have changed jobs or become unemployed.
There is also the case where tax authorities impose an emergency tax on individuals for whom they do not have the latest information. It is highly recommended that you inform your employer regarding the issue in order to send the relevant forms with the most accurate data to the local tax office so as to avoid being emergency taxed.