Quote:
Originally Posted by KyleGoetz
Question about that: I've noticed that "tax deduction" and "tax credit" can both be said 税額控除, but 控除 can be both "credit" and "deduction."
These are not the same thing in the US (and maybe all of the English-speaking world?). Suppose you make $30,000 and have a $3,000 tax bill because the tax rate is 10%. A tax credit of $1,000 would make your tax bill $2,000 by taking that credit right off the tax you owe.
However, a tax deduction of $3,000 would mean you take it off your total income before calculating the 10% tax owed. So $30,000 - $3,000 = $27,000. 10% of that is $2,700, which is your tax bill.
So tax credits are subtracted after the %, and tax deductions are subtracted before the %.
Is there such a distinction in Japan? I don't see one made in Eijiro (ALC), and Wikipedia's entry for "tax credit" has no link to a Japanese article.
Thanks.
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There is a distinction in Japan as well.
If "tax deduction" means what you explained above, that would be called 所得控除 over here. Whether or not they mean the "exact" same thing, I am not 100% certain because I don't think our two countires have the same taxing system. In Japan, you get 所得控除 for conditions such as having a spouse and/or kids and paying for a life insurance, etc.
税額控除 is exactly what you described as tax credit. The most common kind would be one that you receive for taking out a mortgage loan.