Definition of the tax credit
A tax credit is an amount that is subtracted from the amount of tax that a business or individual must pay.
Depending on the tax system or the country, a tax credit can be granted for different types of taxes, such as income tax, property tax, or VAT. It may be granted in respect of taxes already paid as a subsidy, or encourage investment or other behavior.
Some tax credits are “refundable” to the extent that they exceed the amount of tax. For example, the Energy Transition Tax Credit (ISCED): it refers to work that saves energy, such as insulation or thermal renovation.