Tax incentive

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1. Tax and treasury.

Tax incentives usually are tax-beneficial legal structures, designated physical locations, investments, activities, financial arrangements or instruments that are intended by the revenue authority attract exemption from - or reduced liability to - different forms of taxation.

Tax incentives are designed by the tax rule-setting authorities to encourage particular wanted activities, contrasted with unintended tax "loopholes" and over-aggressive tax planning.


This kind of tax incentives are also known informally as tax breaks.


2.

Additional tax - or less favourable tax treatment - attaching to activities, or omissions, that the tax rule-setting authority wants to discourage.


See also