What are "retenciones" as understood in tax terminology?

In tax terminology, "retenciones" refer to amounts that are withheld from payments for tax purposes. This practice is common in various tax systems and typically involves an entity retaining a portion of the payment it makes to another party, which is then remitted to the tax authorities on behalf of the recipient. This mechanism helps ensure tax compliance and improves revenue collection for governments.

When payments are made—such as salaries, services, or rents—taxes are often deducted at the source as "retenciones," thereby alleviating the individual's burden of needing to pay those taxes directly later. By implementing retenciones, the tax system aims to create a more streamlined process for tax collection and to minimize tax evasion, as the withheld amounts are automatically reported and forwarded to tax authorities.

The other options represent different tax-related concepts, but they do not describe "retenciones." Commissions paid to tax agents refer to fees rather than tax withholdings, tax rebates denote refunds rather than amounts held back, and income that is exempt from tax pertains to amounts that do not incur taxation at all, which again does not align with the definition of retenciones.