A tax credit is a mechanism of credit of tax attached to a movable income. It is used in many countries.

Since 2004, it is not used any more in France.

Operation tax credit it

When a natural person perceives a Dividende on behalf of a company, this one with already discharged a income tax on this one. This one becomes a credit on the treasure for the shareholder who becomes deductible from his own tax.

For example, when the rate of tax on the benefit of the companies is of 33,3%, a dividend of 100 is resulting from a benefit of 150 of which 50 were paid with the title of the corporation tax. There thus exists a credit of 50 on the treasure for this dividend.

This dividend will then be reimposed for its full value before tax (100 + 50), that is to say the nominal one plus it tax credit. The tax is then calculated on this total (150). Thereafter, it tax credit will be deduced from the entire amount of the imposition, since it is about a credit.

Objectives tax credit it

The mechanism tax credit it pursues several goals:

• to avoid taxation in " cascade" Benefit S (IS + IRPP)
• to restore the tax equality between Individual business and Public limit company
• to incite the companies and the private individuals to repatriate their foreign benefit of source

According to the national legislations and international conventions, tax credit is it of whole or part of the total of the corporation tax.