Page 15 - F1 Integrated Workbook STUDENT 2018
P. 15
Features of Taxation and the Regulatory Environment
Definitions of key terms
3.1 Incidence
The incidence of a tax is the distribution of the tax burden and can be
split into formal and actual incidence. Incidence can be either formal
incidence or actual incidence.
Formal incidence is the person who has direct contact with the tax
authorities, i.e. who is legally obliged to pay the tax.
Actual incidence is the person who actually ends up bearing the cost of
the tax, i.e. who actually bears the burden of the tax.
3.2 Taxable person
The person accountable for the tax payment, e.g. Individual or entity.
5
