Tax return

A tax return is the completion of documentation that calculates an entity or individual's income earned and the amount of taxes to be paid to the government or government organizations or, potentially, back to the taxpayer.

Taxation is one of the biggest sources of income for the government. There are two types of taxes—direct and indirect—which are both parts of the tax revenue. Tax revenue is the income gained by government from taxes that are levied on income, profit, goods and services, land revenue, ownership, and transfer of property, and other taxes. Total tax revenue calculated as a percentage of GDP shows the share of the country’s output collected by the government through taxes. Tax revenue is used by governments to grant sums of money to communities, the military, education, hospitals, and infrastructure.

Tax returns are usually processed by each country's tax agency, known as a revenue service, such as the Internal Revenue Service in the United States, the State Taxation Administration in China, and HM Revenue and Customs in the United Kingdom. Citizens in Sweden, Denmark, Finland, and Iceland pay the highest taxes and also get the highest benefits from taxes such as free or low-cost healthcare, education, childcare, etc. Austria, the Netherlands, and Belgium also have high taxes. In contrast, countries such as Saudi Arabia, Brunei, Monaco, the Cayman Islands, Bahamas, and Andorra are so-called tax havens. These countries only tax very specific types of wealth or income, have very low tax rates in general, or have no taxes at all.