direct taxes

Let’s discuss the impact and implications of indirect taxes on your organization. Direct vs. Indirect Taxes Before we talk about how indirect taxes shape businesses, let’s break down the difference between direct taxes and indirect taxes. According to the IRS, “a direct tax is one that the taxpayer pays directly to the government. These taxes cannot be shifted to any other person or group. An indirect tax is one that can be passed on – or shifted – to another person or group by the person or group that owes it.” Examples of direct taxes include things like income taxes, property taxes, and taxes on assets. Indirect taxes include things like sales tax, value-added tax, and other excise duties, where a tax is collected by the seller but paid by the buyer. Most indirect taxes are paid by consumers, not by the supplying business. The Impact of Indirect Taxes Indirect taxes are often used by governments to encourage – or discourage, in the case of sin taxes – certain behaviors in consumers. For example, taxes imposed on items being imported can help push US consumers to think more carefully about buying American-made products. These products are often cheaper because the extra indirect tax does not apply to them. This, of course, depends on the costs associated with making and shipping a product within the US versus from country to country. Indirect taxes also allow businesses to allocate certain financial burdens, operations, and cost analysis away from the business itself and onto your customers, easing your financial burdens and increasing revenue. But the digital transformation that has been in the works for years before COVID is going to create a lot of new obstacles and opportunities. The Emergence of NFTs Non-fungible tokens are becoming more and more popular, as is cryptocurrency. NFTs are unique digital assets whose ownership is demonstrated and verified via DLT (distributed ledger technology). Because NFTs are difficult to classify, they are …

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