direct tax

noun
Updated on: 13 Oct 2017

Definition of direct tax

:a tax exacted directly from the taxpayer

First Known Use of direct tax

1770


Financial Definition of DIRECT TAX

direct tax

What It Is

A direct tax is any tax levied on companies or individuals that cannot be transferred to another party. It is the opposite of indirect tax.

How It Works

Direct taxes affect individuals and companies to the amountn of the tax that cannot be eliminated by transferring to another party. Personal, corporate and property taxes are examples of direct taxes.

[InvestingAnswers Feature: The Most Important Tax Changes to Know Before Filing Your Tax Return]

Why It Matters

Individuals and entities affected by direct taxes should stay informed about how much they should be prepared to pay, and if these changes might affect business decisions.

[InvestingAnswers Feature: How to Avoid an IRS Audit]


Law Dictionary

direct tax

noun

legal Definition of direct tax

:a tax imposed on a taxpayer himself or herself or on his or her property — compare excise

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