Aghayev Orkhan Ilham,
Master’s student, Tax Law specialization, Faculty of Law, Baku State University
E-mail: [email protected]
Taxes are an indispensable tool for governments, without which many states areunable to function effectively. Taxation is a compulsory fiscal imposition, levied from a specified group of individuals and entities, also known as taxpayers, designed to fund the operational requirements of the state and its local units, including municipalities and then the subsequent distribution of these funds is mainly aimed at the well-being and prosperity of the populace within the respective country.
How are these payments calculated? To determine taxable amount of levied tax it is required to define some its inherent components,i.e., taxpayer, tax object, base, and its rate.
– taxpayer is an individual or entity, structured in any legal organizational form, who bears the obligation to pay taxes based on their status, primarily determined by residency.
– tax object, also known as taxable object, refers to the particular item, transaction, or set of circumstances possessing measurable cost,
quantitative, and physical attributes, presence of which, as stipulated by the legislation of respective country, establishing occurrence of taxpayer’s obligation fulfill their tax liabilities.
– tax rate means percentage or fixed amount applied to the taxable object. The coefficient of which allow state authority to ascertain the requisite relevant amount of payments.
– tax base encompasses quantitative characteristics of tax object calculated by using taxunit; the unit of measurement of tax base, e.g.,amount of individual’s gross profit in respective currency, or the volume of engine power of automobile measured in horsepower etc.
That part of the tax base which remains after preferential deductions is called taxable base, and in inference, the taxpayer must pay to the state the amount which is calculated applying the tax rate to taxable base.
DOI 10.30546/2218-9130. 01.351.2024.145