Governments often implement tax incentives to stimulate economic growth and encourage entrepreneurship. Some of these incentives include:
- Tax Credits: These are amounts that can be subtracted directly from taxes owed, such as the R&D tax credit for businesses engaging in research and development. - Deductions: These reduce the amount of taxable income, such as deductions for business expenses, which can include office supplies, travel, and marketing costs. - Exemptions: Certain types of income or transactions may be exempt from taxation, such as specific startup grants.