What is the US investment tax credit


What is the US investment tax credit

Nowadays loans accompanies an organization almost throughout its operations. With their help, modern production, procurement of raw materials, finally, only to replenish working capital. The source of these funds are (mostly) banking institutions. But there is a unique type of loan, managed by the state, with which you can solve problems with budget payments. This investment tax credit.


 Judging by the definition in the tax code, this credit is more of a pending transfer, rather than loan money. In fact, the actual money is issued on it, but after its registration allowed the organization to pay taxes in a smaller size.


What is the US investment tax credit?

Although the agreement is a public organization, most of the terms are similar to those used by banks. Here you can set the loan period, maturity, and even interest (often - very small). Accept here you can limit the property liability for non-payment of guarantees of performance of obligations.


Although the tax debt can be not only a corporation but also individual entrepreneurs, the investment tax credit is issued only to legal entities. This characteristic is due to the peculiarities of liability.


The organization may withdraw the mortgaged property debt, and this may not be necessary, until the judgment. But to deprive the citizen of housing is very difficult. Civil law is the guardian of private property, especially if it is necessary for living.


Issues what is needed

With regard to lending to this subject, in this way very often extinguished income tax, terms of payment which is very expensive to break. Penalties inevitably follow in the form of fines, delays and long fines. When the amount of payments that are ingrained in it, all these amounts translate into significant investments.


It is worth noting, that the state is concerned about, that this list is not very extensive. In addition to income tax only certain types of regional and local payments can be credited to the budget.


What is the mechanism

Investment tax credit is a well-defined mechanism. The organization, which was taken for granted, may, as we have said, to reduce payments for the reporting period.


However, the end point of the contractual relationship is taken when the amount of unpaid taxes equals the loan amount. As a result, such an agreement appears from the outside, as the decision of the existence of debt.


In addition, to reduce payments can only be up to a certain limit. Legislation set the bar at 50% of the amount of tax payable in normal circumstances.

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