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78-548: Kuortane is a municipality of Finland . It is located in the South Ostrobothnia region . The municipality has a population of 3,332 (31 October 2024) and covers an area of 484.88 square kilometres (187.21 sq mi) of which 22.72 km (8.77 sq mi) is water. The population density is 7.21 inhabitants per square kilometre (18.7/sq mi). The neighboring municipalities of Kuortane are Alajärvi , Alavus , Lapua and Seinäjoki . The municipality

156-606: A credit for income taxes paid to other jurisdictions of the same sort. Thus, a credit is allowed at the national level for income taxes paid to other countries. Many income tax systems permit other credits of various sorts, and such credits are often unique to the jurisdiction. Some jurisdictions, particularly the United States and many of its states and Switzerland , impose the higher of regular income tax or an alternative tax. Switzerland and U.S. states generally impose such tax only on corporations and base it on capital or

234-531: A change in law, Tampere was first city to elect a mayor ( pormestari / borgmästare ) in 2007. The mayor is not, however, currently elected directly, but by the municipal council. The mayor acts as municipal manager and as a speaker of municipal council. Although municipalities do not have police or legislative powers, local ordinances concerning traffic can be set, and municipal parking inspectors can give parking tickets. Municipalities are legal persons and can appear in an administrative court . Likewise,

312-468: A concept of net increase. In 9 CE, Emperor Wang Mang of the Xin dynasty (9 to 23 CE) established the first income tax through a 10% tax of net earnings from wild herb and fruit collection, fishing, shepherding, and various nonagricultural activities and forms of trading. People were obligated to report their taxes to the government and officials would audit these reports. The penalty for evading this tax

390-560: A few countries, cities also impose income taxes. The system may be integrated (as in Germany) with taxes collected at the federal level. In Quebec and the United States, federal and state systems are independently administered and have differences in determination of taxable income. Retirement oriented taxes, such as Social Security or national insurance , also are a type of income tax, though not generally referred to as such. In

468-439: A levy of 2 old pence in the pound ( 1 ⁄ 120 ) on incomes over £60 (equivalent to £6,700 in 2023), and increased up to a maximum of 2 shillings in the pound (10%) on incomes of over £200. Pitt hoped that the new income tax would raise £10 million a year, but actual receipts for 1799 totalled only a little over £6 million. Pitt's income tax was levied from 1799 to 1802, when it was abolished by Henry Addington during

546-452: A municipality. This was finished by the Marin cabinet . Income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income ). Income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates may vary by type or characteristics of the taxpayer and

624-548: A new (and Finnish-speaking) suburb with multiple times the inhabitants than there are in Sipoo. There is currently a heated political debate in Finland about reforming the municipality system. Essentially, a multitude of small municipalities is seen as detrimental to the provision of public services, having originated during Finland's agrarian years. As a result, there have been suggestions of state-imposed mergers. A committee led by

702-506: A new source of funds. The new income tax, based on Addington's model, was imposed on incomes above £150 (equivalent to £19,487 in 2023). Although this measure was initially intended to be temporary, it soon became a fixture of the British taxation system. A committee was formed in 1851 under Joseph Hume to investigate the matter, but failed to reach a clear recommendation. Despite the vociferous objection, William Gladstone , Chancellor of

780-591: A person had in property, the more tax they paid. Taxes were collected from individuals. One of the first recorded taxes on income was the Saladin tithe introduced by Henry II in 1188 to raise money for the Third Crusade . The tithe demanded that each layperson in England and Wales be taxed one tenth of their personal income and moveable property. In 1641, Portugal introduced a personal income tax called

858-415: A place of business in the municipality (3.8% of income). Some municipal functions receive direct funding both from the municipality and the state, e.g. AMK vocational colleges. Finland has an extensive welfare state , and municipalities are responsible for much of the services to that end. Tasks of the municipalities are as follows: Although municipalities are responsible for their own finances, there

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936-418: A property tax, amounting to 3.6% of income, which is comparatively low: the annual fee is 0.32-0.75% of net present value for permanent residences and 0.50-1.00% for leisure properties like summer cottages as well as undeveloped plots. This is always paid by the owner, never a tenant directly, unlike the council tax . Municipalities receive a share of corporate tax revenue ( yhteisövero ) from companies having

1014-412: A residential system of taxation usually allow deductions or credits for the tax that residents already pay to other countries on their foreign income. Many countries also sign tax treaties with each other to eliminate or reduce double taxation . Countries do not necessarily use the same system of taxation for individuals and corporations. For example, France uses a residential system for individuals but

1092-426: A similar measure. Income tax is generally collected in one of two ways: through withholding of tax at source and/or through payments directly by taxpayers. Nearly all jurisdictions require those paying employees or nonresidents to withhold income tax from such payments. The amount to be withheld is a fixed percentage where the tax itself is at a fixed rate. Alternatively, the amount to be withheld may be determined by

1170-462: A state agency, and used primarily for traffic-related purposes (signage, speed limits, and highway planning). There are 745 officially recognized urban areas in Finland, 49 of which have more than 10,000 inhabitants and six more than 100,000. Each municipality has a distinct coat of arms . They are posted on the municipal borders and shown in official documents representing the municipality. The coats of arms for many municipalities have been designed in

1248-488: A target of population 20,000 per municipality. Commuter belts have also been proposed as a target by a government committee, such that municipalities where more than 35% of workforce commutes would be subject to a merger. The Sipilä cabinet , from 2015, had been preparing a significant reform of health and social services ( sote-uudistus ), aimed at increasing choice between municipal and private healthcare, and assigning some healthcare responsibilities into larger units than

1326-430: Is a very wide variation in the amount of taxation in different countries. For example, countries such as Singapore, Belgium and United Arab Emirates levy low income tax on interest and dividends, while countries such as Denmark, France and United States have very high income tax for this type of income. For profits that are earned by selling assets or a real estate (capital gains), the income tax varies between countries, and

1404-429: Is collected only from medium to high income earners. However, in practice even the municipal tax is progressive due to generous deductions granted to the lowest income levels. The pre-deduction base tax varies from 16% in affluent Kauniainen to 20% or more in a number of small rural municipalities. Next to the municipal tax, municipalities receive funding from the state budget ( valtionapu , 19% of income). This funding

1482-423: Is different from for any other types of income. Rental income may also sometimes be subject to income tax, but many countries offer deductions or even exemptions for this type of income. Income taxes are used in most countries around the world. The tax systems vary greatly and can consist of a flat fixed rate , progressive , or regressive , structures depending on the type of tax. Comparison of tax rates around

1560-429: Is expected as the name of the municipality refers to the entire parish, not just a single center like a church village. Villages have no administrative role, although some have voluntary village associations ( kyläyhdistys ) and other non-governmental public life. Although related, urban areas in Finland ( taajama ) are not local administrative units. A catalog is independently compiled each year by Statistics Finland ,

1638-473: Is generally nominal or modest: a regular council member is paid 70 euro on average on a per-meeting basis (2017). Municipal managers ( kaupunginjohtaja , stadsdirektör for cities, kunnanjohtaja , kommunsdirektör for other municipalities) are civil servants named by the council. The city manager of Helsinki is called ylipormestari / överborgmästare "Lord Mayor" for historical reasons. There were previously no mayors in Finland, but after

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1716-489: Is higher in the US than in countries like Germany or Italy. In countries with a sizeable black market , the voluntary compliance rate is very low and may be impossible to properly calculate. Income taxes are separately imposed by sub-national jurisdictions in several countries with federal systems. These include Canada , Germany , Switzerland, and the United States , where provinces, cantons, or states impose separate taxes. In

1794-828: Is included in income for individuals may differ from what is included for entities. The timing of recognizing income may differ by type of taxpayer or type of income. Income generally includes most types of receipts that enrich the taxpayer, including compensation for services, gain from sale of goods or other property, interest, dividends, rents, royalties, annuities, pensions, and all manner of other items. Many systems exclude from income part or all of superannuation or other national retirement plan payments. Most tax systems exclude from income health care benefits provided by employers or under national insurance systems. Nearly all income tax systems permit residents to reduce gross income by business and some other types of deductions. By contrast, nonresidents are generally subject to income tax on

1872-522: Is means-tested to municipality wealth and serves to balance the differences in municipal tax revenue. Besides taxes, sales revenue, fees and profit of operations also form a substantial share of municipal income (21%). In 2023, taxation will be significantly changed, when new wellbeing services counties are founded. Since these are funded by the state, municipal taxes will be reduced by 12.64 percentage points from ~20 to ~7%, and state taxes will be increased correspondingly. Additionally, municipalities levy

1950-503: Is much highly specific legislation and regulation that requires the services to be provided up to a standard. Thus, although municipalities have the power to voluntarily spend tax-generated income, they are required to first allocate funds to legally prescribed services. Municipalities may provide some of these services through corporations that they own or from private companies that they regulate. For example, Helsinki Regional Transport Authority (HSL) provides public transport services in

2028-529: Is nearly always allowed for recovery of costs of assets used in the activity. Rules on capital allowances vary widely, and often permit recovery of costs more quickly than ratably over the life of the asset. Most systems allow individuals some sort of notional deductions or an amount subject to zero tax. In addition, many systems allow deduction of some types of personal expenses, such as home mortgage interest or medical expenses. Only net income from business activities, whether conducted by individuals or entities

2106-473: Is only one tax bracket, or one remains within the same tax bracket, there will still be bracket creep resulting in a higher proportion of income being paid in tax. That is, although the marginal tax rate remains unchanged with inflation, the average tax rate will increase. Most progressive tax systems are not adjusted for inflation. As wages and salaries rise in nominal terms under the influence of inflation they become more highly taxed, even though in real terms

2184-648: Is tax resident and also pay tax to other country where he or she is non-resident. This creates the situation of Double taxation which needs assessment of Double Taxation Avoidance Agreement entered by the jurisdictions where the tax payer is assessed as resident and non-resident for the same transaction. Residence is often defined for individuals as presence in the jurisdiction for more than 183 days. Most jurisdictions base residence of entities on either place of organization or place of management and control. Most systems define income subject to tax broadly for residents, but tax nonresidents only on specific types of income. What

2262-449: Is taxable, with few exceptions. Many countries require business enterprises to prepare financial statements which must be audited. Tax systems in those countries often define taxable income as income per those financial statements with few, if any, adjustments. A few jurisdictions compute net income as a fixed percentage of gross revenues for some types of businesses, particularly branches of nonresidents. Nearly all systems permit residents

2340-533: Is unilingually Finnish . Kuortane has a notable history of pine tar production. It is currently well known for the Kuortaneen urheilulukio , a sports institute (Olympic Training centre) and training facility where many young Finnish athletes study and train. Both the women's national under-18 ice hockey team and Team Kuortane of the Naisten Liiga are based at the institute. Kuortane is also known as

2418-613: The Finnish Environment Institute classifies urban settlements with over 15,000 inhabitants as kaupunki , municipalities can name themselves kaupunki with fewer inhabitants. There are 44,991 inhabitants in Nurmijärvi , the largest kunta in Finland, and 1,246 inhabitants in Kaskinen , the smallest kaupunki , so the kunta–kaupunki categorisation mainly concerns the name of the municipality. The areas of

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2496-502: The Peace of Amiens . Addington had taken over as prime minister in 1801, after Pitt's resignation over Catholic Emancipation . The income tax was reintroduced by Addington in 1803 when hostilities with France recommenced, but it was again abolished in 1816, one year after the Battle of Waterloo . Opponents of the tax, who thought it should only be used to finance wars, wanted all records of

2574-547: The décima . The inception date of the modern income tax is typically accepted as 1799, at the suggestion of Henry Beeke , the future Dean of Bristol . This income tax was introduced into Great Britain by Prime Minister William Pitt the Younger in his budget of December 1798, to pay for weapons and equipment for the French Revolutionary War . Pitt's new graduated (progressive) income tax began at

2652-643: The 18th century, King Gustaf III implemented the Great Partition, where common lands were redistributed into larger properties, and claimed all unclaimed land to the crown. Thus, there is no "leftover" land outside the jurisdiction of municipalities, as all land belongs to either to a private property or to the government. The secular government divided the properties to taxable units (villages and secular municipalities) according to its own convenience, which were not necessarily convergent with parishes. Furthermore, cities were chartered separately. Up to 1734,

2730-701: The Exchequer from 1852, kept the progressive income tax, and extended it to cover the costs of the Crimean War . By the 1860s, the progressive tax had become a grudgingly accepted element of the United Kingdom fiscal system. The US federal government imposed the first personal income tax on August 5, 1861 , to help pay for its war effort in the American Civil War (3% of all incomes over US$ 800) (equivalent to $ 21,300 in 2023). This tax

2808-864: The US treat an entity as a corporation only if it is legally organized as a corporation. Estates and trusts are usually subject to special tax provisions. Other taxable entities are generally treated as partnerships. In the US, many kinds of entities may elect to be treated as a corporation or a partnership. Partners of partnerships are treated as having income, deductions, and credits equal to their shares of such partnership items. Separate taxes are assessed against each taxpayer meeting certain minimum criteria. Many systems allow married individuals to request joint assessment . Many systems allow controlled groups of locally organized corporations to be jointly assessed. Tax rates vary widely. Some systems impose higher rates on higher amounts of income . Tax rates schedules may vary for individuals based on marital status. In India on

2886-424: The US, these taxes generally are imposed at a fixed rate on wages or self-employment earnings up to a maximum amount per year. The tax may be imposed on the employer, the employee, or both, at the same or different rates. Some jurisdictions also impose a tax collected from employers, to fund unemployment insurance, health care, or similar government outlays. Multiple conflicting theories have been proposed regarding

2964-517: The United Kingdom, and the United States, among others, follow most of the principles outlined below. Some tax systems, such as India , may have significant differences from the principles outlined below. Most references below are examples; see specific articles by jurisdiction ( e.g. , Income tax in Australia ). Individuals are often taxed at different rates than corporations. Individuals include only human beings. Tax systems in countries other than

3042-576: The United States. In fiscal year 1918, annual internal revenue collections for the first time passed the billion-dollar mark, rising to $ 5.4 billion by 1920. The amount of income collected via income tax has varied dramatically, from 1% for the lowest bracket in the early days of US income tax to taxation rates of over 90% for the highest bracket during World War II . While tax rules vary widely, certain basic principles are common to most income tax systems. Tax systems in Canada, China, Germany , Singapore ,

3120-406: The birthplace of world-famous architect Alvar Aalto . This Western Finland location article is a stub . You can help Misplaced Pages by expanding it . Municipalities of Finland Municipalities have council-manager government : they are governed by an elected council ( kunnanvaltuusto , kommunfullmäktige ), which is legally autonomous and answers only to the voters. The size of

3198-460: The capital area. From 2023, new wellbeing services counties will take the responsibility for healthcare and social services from the municipalities. As of 2021 , there are 309 municipalities in Finland, and from 1 January 2025 308, of which (the following numbers not updated) 107 are cities or towns ( kaupunki ). Sixteen municipalities are unilingually Swedish (all in the autonomous Åland region), while 33 are bilingual: 15 with Swedish as

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3276-532: The church village ( kirkonkylä , abbreviated kk ) is the historical center, the largest or administrative center may be in another village. For example, Askola has a church village (Askolan kirkonkylä), but its administrative center is in Monninkylä . Often, the church village has the same name as the municipality, as with Askola. However, this is not necessarily so, e.g. Enontekiö is governed from Hetta ; these villages are often erroneously labeled in maps. This

3354-511: The council is proportional to the population, the extremes being 9 in Sottunga and 85 in Helsinki . A subsection of the council, the municipal executive board ( kunnanhallitus ), controls the municipal government and monitors the implementation of decisions of the council. Its decisions must be approved by the council. Unlike national cabinets, its composition is derived from the composition of

3432-423: The council, not along government-opposition lines. Furthermore, individual decisions are prepared in specialized municipal boards ( lautakunta ) for a council meeting, which include, for example, zoning, social assistance, and education boards. Council, executive board, and municipal board memberships are elected positions of responsibility, not full-time jobs. Remuneration depends on the municipality and position, but

3510-444: The economic impact of income taxes. Income taxes are widely viewed as a progressive tax (the incidence of tax increases as income increases). Some studies have suggested that an income tax does not have much effect on the numbers of hours worked. Tax avoidance strategies and loopholes tend to emerge within income tax codes. They get created when taxpayers find legal methods to avoid paying taxes. Lawmakers then attempt to close

3588-474: The economy, transport and environment, while law and environmental enforcement is handled by the local aluehallintovirasto , governing multi-region jurisdictions termed alue .-G.H- Residents pay a municipal tax that is a form of income tax , which is the mainstay of the income of a municipality (42% of income). Municipal tax is nominally a flat tax that is levied from a broader population (including lower income levels) than progressive state income tax, which

3666-1189: The former Minister for Regional and Municipal Affairs, Hannes Manninen , suggested creating a two-tier system of municipalities with different powers, while the Association of Finnish Local and Regional Authorities ( Kuntaliitto ) favoured a system where municipalities would be units of at least 20,000–30,000 inhabitants, cf. the current median at 4,700. The motion was inspired by a similar reform in Denmark (see Municipalities of Denmark ). The former government ( Vanhanen II ), however, planned to not impose mergers. Recently, many voluntary mergers have been agreed on. Ten mergers were completed in 2005, one in 2006, 14 in 2007 and one in 2008. In 2009, there were even more, many of which consolidated more than two municipalities. Several cities merged with surrounding rural municipalities in Hämeenlinna , Salo , Kouvola , Seinäjoki , Naantali , Kauhava , Lohja , Raseborg , Jyväskylä and Oulu in 2009. In total, there were 32 mergers, involving 99 municipalities, that reduced

3744-430: The gross amount of income of most types plus the net business income earned within the jurisdiction. Expenses incurred in a trading, business, rental, or other income producing activity are generally deductible, though there may be limitations on some types of expenses or activities. Business expenses include all manner of costs for the benefit of the activity. An allowance (as a capital allowance or depreciation deduction)

3822-435: The history of civilization , these preconditions did not exist, and taxes were based on other factors. Taxes on wealth , social position, and ownership of the means of production (typically land and slaves ) were all common. Practices such as tithing , or an offering of first fruits , existed from ancient times, and can be regarded as a precursor of the income tax, but they lacked precision and certainly were not based on

3900-616: The income tax unconstitutional , the 10th amendment forbidding any powers not expressed in the US Constitution, and there being no power to impose any other than a direct tax by apportionment. In 1913, the Sixteenth Amendment to the United States Constitution cleared the unconstitutionality obstacle which previously had not allowed for the implementation of a federal income tax before 1913 in

3978-615: The jurisdiction is generally total income less income producing expenses and other deductions. Generally, only net gain from the sale of property, including goods held for sale, is included in income. The income of a corporation's shareholders usually includes distributions of profits from the corporation. Deductions typically include all income-producing or business expenses including an allowance for recovery of costs of business assets. Many jurisdictions allow notional deductions for individuals and may allow deduction of some personal expenses. Most jurisdictions either do not tax income earned outside

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4056-615: The jurisdiction is generally total income less income producing expenses and other deductions. Generally, only net gain from the sale of property, including goods held for sale, is included in income. The income of a corporation's shareholders usually includes distributions of profits from the corporation. Deductions typically include all income-producing or business expenses including an allowance for recovery of costs of business assets. Many jurisdictions allow notional deductions for individuals and may allow deduction of some personal expenses. Most jurisdictions either do not tax income earned outside

4134-563: The jurisdiction or allow a credit for taxes paid to other jurisdictions on such income. Nonresidents are taxed only on certain types of income from sources within the jurisdictions, with few exceptions. Most jurisdictions require self-assessment of the tax and require payers of some types of income to withhold tax from those payments. Advance payments of tax by taxpayers may be required. Taxpayers not timely paying tax owed are generally subject to significant penalties, which may include jail-time for individuals. Taxable income of taxpayers resident in

4212-462: The jurisdiction or allow a credit for taxes paid to other jurisdictions on such income. Nonresidents are taxed only on certain types of income from sources within the jurisdictions, with few exceptions. The concept of taxing income is a modern innovation and presupposes several things: a money economy , reasonably accurate accounts , a common understanding of receipts, expenses and profits , and an orderly society with reliable records. For most of

4290-410: The jurisdiction. See, e.g. , the discussion of taxation by the United States of foreign persons . Residents, however, are generally subject to income tax on all worldwide income. A handful of jurisdictions (notably Singapore and Hong Kong) tax residents only on income earned in or remitted to the jurisdiction. There may arise a situation where the tax payer has to pay tax in one jurisdiction he or she

4368-577: The law was different in cities than in rural municipalities. On 6 February 1865, the modern municipalities were established as secular entities separate from the parishes. The reform was inspired by the Swedish municipal reforms of 1862 . Up to 1964, cities financed their own police and registry services. Until 1977 municipalities were divided into cities ( kaupunki , stad ), market towns ( kauppala , köping ) and rural municipalities ( maalaiskunta , landskommun ). The market town category

4446-517: The loopholes with additional legislation. That leads to a vicious cycle of ever more complex avoidance strategies and legislation. The vicious cycle tends to benefit large corporations and wealthy individuals that can afford the professional fees that come with ever more sophisticated tax planning, thus challenging the notion that even a marginal income tax system can be properly called progressive. The higher costs to labour and capital imposed by income tax causes dead weight loss in an economy, being

4524-495: The loss of economic activity from people deciding not to invest capital or use time productively because of the burden that tax would impose on those activities. There is also a loss from individuals and professional advisors devoting time to tax-avoiding behaviour instead of economically productive activities. Bracket creep is usually defined as the process by which inflation pushes wages and salaries into higher tax brackets , leading to fiscal drag . However, even if there

4602-574: The majority language (all but four in Ostrobothnia ) and 18 with Finnish as the majority language (all but five in Uusimaa region). Four municipalities in northern Lapland ( Utsjoki , Inari , Sodankylä and Enontekiö ) have one or all of the three Sami languages spoken in Finland as an official language. Finnish municipalities can choose to be called either kaupunki ( city or town ) or kunta (small town or rural municipality). Although

4680-432: The modern era, many of them by Gustaf von Numers . In addition, municipalities like Vantaa since 2015 and Helsinki since 2017 have a logo distinct from their coat of arms. Distinctively, the Helsinki capital region , has no special arrangements. The area consists of four entirely independent cities that form a continuous conurbation . The Helsinki metropolitan area has grown in population and area relatively quickly:

4758-478: The municipalities vary, as the population is the primary criterion for forming a municipality. The largest municipalities in size are found in Lapland, of which the largest is Inari at 17,333.65 km (6,692.56 sq mi) (130 km square). The smallest municipalities are very small towns. Kaskinen is an independent town with a land area of only 10.49 km (4.05 sq mi). Kauniainen , which

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4836-456: The nearby municipalities, considered rural only 50 years ago, have become suburbs , and the growth is projected to continue. A state-imposed merger of Helsinki and a part of Sipoo , a rural, 40% Swedish-speaking municipality adjacent to the Helsinki metropolitan area, was approved by the government in 2006, counter to the opinion of the Sipoo municipal council. This area will effectively become

4914-413: The next $ 10,000 taxed at 1%, etc.). Most jurisdictions exempt local charitable organizations from tax. Income from investments may be taxed at different (generally lower) rates than other types of income. Credits of various sorts may be allowed that reduce tax. Some jurisdictions impose the higher of an income tax or a tax on an alternative base or measure of income. Taxable income of taxpayers' resident in

4992-556: The number of municipalities by 67. The year 2009 also marked the end of the last maalaiskunta , a municipality surrounding a city but sharing the name, in Jyväskylä . There were four mergers in 2010, six in 2011, ten in 2013, three in 2015, four in 2016, two in 2017, one in 2020 and one in 2021. In the period 2005–2021, the number of municipalities was voluntarily reduced from 444 to 309. In 2012, Katainen's government published an extensive plan aiming at merging municipalities to reach

5070-479: The other hand there is a slab rate system, where for income below INR 2.5 lakhs per annum the tax is zero percent, for those with their income in the slab rate of INR 2,50,001 to INR 5,00,000 the tax rate is 5%. In this way the rate goes up with each slab, reaching to 30% tax rate for those with income above INR 15,00,000. Residents are generally taxed differently from non-residents. Few jurisdictions tax non-residents other than on specific types of income earned within

5148-420: The state of Finland is a separate legal person. Excluding judicial review of formal compliance to administrative law, municipalities are independent and not a part of a local state hierarchy. Municipalities cooperate in regions of Finland . State agencies have jurisdictions spanning one or more regions: each region is served by an ely-keskus ( elinkeino-, liikenne- ja ympäristökeskus ) on matters of employment,

5226-500: The tax administration of the country or by the payer using formulas provided by the tax administration. Payees are generally required to provide to the payer or the government the information needed to make the determinations. Withholding for employees is often referred to as "pay as you earn" ( PAYE ) or "pay as you go." Income taxes of workers are often collected by employers under a withholding or pay-as-you-earn tax system. Such collections are not necessarily final amounts of tax, as

5304-606: The tax destroyed along with its repeal. Records were publicly burned by the Chancellor of the Exchequer , but copies were retained in the basement of the tax court. In the United Kingdom of Great Britain and Ireland , income tax was reintroduced by Sir Robert Peel by the Income Tax Act 1842 . Peel, as a Conservative , had opposed income tax in the 1841 general election , but a growing budget deficit required

5382-449: The tax. Self-assessment means the taxpayer must make a computation of tax and submit it to the government. Some countries provide a pre-computed estimate to taxpayers, which the taxpayer can correct as necessary. The proportion of people who pay their income taxes in full, on time, and voluntarily (that is, without being fined or ordered to pay more by the government) is called the voluntary compliance rate . The voluntary compliance rate

5460-419: The territorial system, only local income – income from a source inside the country – is taxed. In the residential system, tax residents of the country are taxed on their worldwide (local and foreign) income, while non-residents are taxed only on their local income. In addition, a very small number of countries, notably the United States , also tax their non-resident citizens on worldwide income. Countries with

5538-407: The type of income. The tax rate may increase as taxable income increases (referred to as graduated or progressive tax rates). The tax imposed on companies is usually known as corporate tax and is commonly levied at a flat rate. Individual income is often taxed at progressive rates where the tax rate applied to each additional unit of income increases (e.g., the first $ 10,000 of income taxed at 0%,

5616-655: The value of the wages and salaries has not increased at all. The net effect is that in real terms taxes rise unless the tax rates or brackets are adjusted to compensate. Many types of income are subject to income tax, which is very variable. It all depends on the country and its tax laws. In general, countries impose taxes on income from wages, salaries, interest, dividends, and rental income. The most typical ones are wage and salary, which are almost always subject to taxation withheld by employers. Some one-time payments such as bonuses paid to employees are taxable. Dividends and interest (stocks or bonds) are usually also taxed. There

5694-411: The worker may be required to aggregate wage income with other income and/or deductions to determine actual tax. Calculation of the tax to be withheld may be done by the government or by employers based on withholding allowances or formulas. Nearly all systems require those whose proper tax is not fully settled through withholding to self-assess tax and make payments prior to or with final determination of

5772-416: The world is a difficult and somewhat subjective enterprise. Tax laws in most countries are extremely complex, and tax burden falls differently on different groups in each country and sub-national unit. Of course, services provided by governments in return for taxation also vary, making comparisons all the more difficult. Countries that tax income generally use one of two systems: territorial or residential. In

5850-496: Was abolished and these were renamed as cities. The rest of the municipalities were classified as 'other municipalities'. All municipalities called maalaiskunta were eventually either merged to their parent cities or changed their names. From 1995 onwards only 'municipality' is recognized by law and any municipality is allowed to call itself a city. Not all municipalities have an obvious urban center; indeed, rural municipalities are often composed of distributed rural villages. Although

5928-598: Was one year of hard labor and confiscation of the entirety of a person's property. Because it caused popular discontent, this income tax was abolished in 22 CE. In the early days of the Roman Republic , public taxes consisted of modest assessments on owned wealth and property. The tax rate under normal circumstances was 1% and sometimes would climb as high as 3% in situations such as war. These modest taxes were levied against land, homes and other real estate, slaves, animals, personal items and monetary wealth. The more

6006-681: Was originally a corporation in Espoo , is only 6.00 km (2.32 sq mi). Municipalities were originally parishes . The old word for a municipality is pitäjä , 'keeper', because when the system was instituted, one municipality kept one minister. Municipalities were divided into villages, which consisted of individual properties. Borders between properties and thus municipalities were defined by oral agreements passed down from generation to generation; usually along straight lines between defined markers such as boulders. Medieval documentation survives only from legal disputes concerning borders. In

6084-476: Was repealed and replaced by another income tax in 1862. It was only in 1894 that the first peacetime income tax was passed through the Wilson-Gorman tariff . The rate was 2% on income over $ 4000 (equivalent to $ 126,000 in 2023), which meant fewer than 10% of households would pay any. The purpose of the income tax was to make up for revenue that would be lost by tariff reductions. The US Supreme Court ruled

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