A tax credit is a sum subtracted from the total amount a taxpayer owes to the state. As opposed to deductions and exemptions, credits directly reduce taxes. The dollar value of the credits is subtracted from the total dollar value of owed taxes. A tax credit may be granted for various types of taxes, such as an income tax, property tax, or VAT. It may be granted in recognition of taxes already paid, as a subsidy, or to encourage investment or other behaviors. In some systems tax credits are 'refundable' to the extent they exceed the relevant tax. Tax systems may grant tax credits to businesses or individuals, and such grants vary by type of credit.