Principles:Taxes
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Profit Taxes
Profit taxes is a basic tax in the game. All commercial operations (including sales from warehouses), production enterprises and stores, must will be tax (no exclusions). Tax must be paid only for already manufactured or sold goods.
Profit taxes is calculated as follows (per 1 unit of produced and sold goods):
PT = (SP — EC) x (PT rate/100)
Where:
SP — actual sale price of produced goods;
EC — estimated cost of produced goods;
PT rate - profit taxes rate (%).
Prime cost includes all main expenses per one turn.
Prime cost
Variable costs + Fixed costs (per 1 unit of produced goods) = prime cost. Prime cost includes the cost of raw material, cost of energy etc., and conditionally fixed expenses (per 1 unit of produced goods).
- Cost of raw materials (funds spent on purchasing of materials, used for production), considering transport costs and customs duties
- Salary
- Cost of energy and fuel
- General production costs
- Management costs
- Defective goods cost
- Royalty
- Amortization of equipment
- For livestock farms: cost of livestock (purchase or replacement)
Prime cost for resellers (stores, warehouses), taxation considers:
- Salary expenses
- Rent expenses
- Cost of one sold product purchase
One example for better understanding:
In case if cost of 1 bread stick = $1, and the bakery bared fixed costs = $10 000, then in case if production volume is 10 000 bread sticks, prime cost of 1 piece will be:
$1 + 10 000 / 10 000 = 2.0
However, if the factories is full producing 100,000 pcs. and the factory will work at full power, then prime cost of 1 bread stick will be:
$1 + 10 000 / 100 000 = 1.1
As you can see from the example, it will be more profitable to produce maximum possible amount of goods as long as the enterprise can sell it all. In this case prime cost will be lower.
Tax Exemption
Our game provides an option of tax exemption for the new players (within first 26 weeks from the date of registration):
- The companies with less than $2 millions asset value - are tax-free.
- The companies with less than $5 millions asset value - will pay half of the tax.
Profits tax rate
Profits tax depends on the region:
- Kazakhstan - 25%
- Azerbaijan - 35%
European Union
- France - 20%
- Germany - 22%
Russia
- Far East - 20%
- Central Russia - 30%
- Volga Region - 30%
- Siberia - 30%
- South Russia - 35%
- Ural - 35%
Ukraine
- Western Ukraine - 32%
- Eastern Ukraine - 35%
- South Ukraine - 37%
In certain situations profits tax is not collected. It happens when:
- the player sells his goods below prime cost,
- rate of profit is below the basic profitability (which is conditionally equal to the profits tax rate in the current region)
In these cases excise tax will be collected instead of profits tax.
Common tax for imputed earnings
Common tax for imputed earnings determines the minimum volume of production tax (excise tax is not collected from warehouses and commercial enterprises).
Common tax for imputed earnings is not an addition to profits tax. It is used only when the produced goods is sold below its prime cost, or in case if rate of profit is below the basic profitability (which is conditionally equal to the profits tax rate in the current region).
In case if rate of profit exceeds profits tax rate in this region, then сommon tax for imputed earnings is not collected and the player pays only profits tax.
Common tax for imputed earnings is calculated according to this formula:
Common tax for imputed earnings = EC x (Goods СTR / 100) x (PT rate / 100)
Where: EC — estimated cost of produced goods Goods СTR — Common tax for imputed earnings rate (%) for the current goods PT rate — profits tax rate in the current region
The system uses Common tax for imputed earnings rate to control different enterprises and their efficiency. For highly profitable enterprises tax rate can be up to 1,0 (100%). On the contrary, the system can apply various benefits for underdeveloped enterprises (in some cases and for certain kinds of products сommon tax for imputed earnings rate might be even 5%).
Common tax for imputed earnings rates (by the group of goods)
Natural resources
- Diamonds: 100%
- Bauxite: 100%
- Clay: 100%
- Wood: 30%
- Iron ore: 100%
- Gold: 100%
- Silica: 100%
- Oil: 100%
- Natural minerals: 100%
- Coal: 100%
Materials and half-finished products
- Aluminum: 20%
- Paper: 5%
- Engine: 20%
- Leather: 5%
- Accessories: 20%
- Dyestuff: 5%
- Plastics: 10%
- Rubber: 10%
- Synthetic fabrics: 5%
- Steel: 20%
- Glass: 20%
- Fabric: 20%
- Chemicals: 20%
- Wool: 20%
- Electronic components: 20%
Agricultural products
- Grain: 10%
- Cocoa: 10%
- Milk: 10%
- Meat: 20%
- Sugar: 10%
- Fruits: 5%
- Cotton: 10%
- Eggs: 10%
Foodstuff
- Sausages: 15%
- Pastry: 15%
- Noodles: 5%
- Dairy products: 10%
- Ice-cream: 15%
- Flour: 10%
- Beer: 10%
- Soft drinks: 10%
- Juice: 10%
- Alcohol: 10%
- Bread: 10%
- Chocolate: 10%
- Sweets: 10%
- Canned goods: 15%
Consumer goods
- Car: 100%
- Audio equipment: 50%
- Bijouterie: 20%
- Diamonds: 30
- Household chemicals: 20
- Bike: 20
- Shower cabins: 5
- Toys: 20%
- Stationery: 20%
- Books: 15%
- Computer: 30%
- Furniture: 30%
- Mobile phone: 20%
- Motorcycle: 30%
- Shoes: 20%
- Clothing: 20%
- Dishes: 20%
- Press: 15%
- Sanitary engineering : 30%
- Bedroom furniture: 100
- Washing machines: 50%
- Television: 50%
- Photo equipment: 20%
- Refrigerators: 50%
- Watches: 30%
- Tires: 20%
- Jewelry: 50%
- GPS-navigators: 20%
Industrial goods
- Device: 30%
- Machine: 30%
- Power-saw bench : 30%
- Mining equipment: 30%
- Tractor: 30%
Livestock
- Poultry : 20%
- Cows: 20%
- Sheep: 20%
- Pigs: 20%
Customs duties
According to the customs regulations, customs duty takes into account both indicative and declared prices - to protect the game from duty-free import (for example, at the country board the player declares customs price which is much lower than the goods actual price).
When the goods cross the country border, customs duty rate will be calculated as follows:
CD = MAX(Price, Indicative price) × (CD rate/100)
Where:
MAX (Price, Indicative price) — taxable price of goods. Depending on which one is higher, declared price of goods or its indicative price will be selected (see the reference tables below).
CD rate — rate of customs duty (%).
Current indicative price (not considering goods quality):
Natural resources
- Diamonds: 1500
- Bauxite: 100
- Clay: 3
- Wood: 1
- Iron ore: 40
- Gold: 300
- Silica: 20
- Manganese: 25
- Oil: 40
- Natural minerals: 7
- Coal: 25
- Chromium: 25
Materials and half-finished products
- Aluminum: 230
- Paper: 0.7
- Engine: 150
- Mirror list: 80
- Leather: 40
- Accessories: 30
- Dyestuff: 50
- Plastics: 70
- Rubber: 50
- Synthetic fabrics: 80
- Steel: 60
- Glass: 20
- Thermocouple: 50
- Fabric: 5
- Chemicals: 20
- Wool: 5
- Electronic components: 70
Agricultural products
- Grain: 2
- Cocoa: 2
- Milk: 1
- Meat: 5
- Sugar: 2
- Fruits: 2.5
- Cotton: 0.5
- Eggs: 1
Foodstuff
- Sausages: 10
- Pastry: 3
- Canned goods: 10
- Sweets: 2.5
- Noodles: 3
- Dairy products: 1,5
- Ice-cream: 1.5
- Flour: 1
- Beer: 2
- Soft drinks: 1.5
- Juice: 1
- Alcohol: 4
- Bread: 0.5
- Chocolate: 5
Consumer goods
- Car: 5000
- Audio equipment: 300
- Bijouterie: 20
- Diamonds: 1000
- Household chemicals: 2
- Bike: 50
- Shower cabins: 150
- Mirror: 20
- Toys: 25
- Stationery: 1
- Books: 5
- Computer: 600
- Furniture: 200
- Mobile phone: 50
- Motorcycle: 2000
- Shoes: 50
- Clothing: 50
- Dishes: 20
- Press: 1
- Sanitary engineering : 30
- Bedroom furniture: 100
- Washing machines: 300
- Television: 300
- Iron: 100
- Dryer: 50
- Photo equipment: 35
- Refrigerators: 300
- Watches: 30
- Tires: 50
- Jewelry: 500
- GPS-navigators: 50
Industrial goods
- Device: 2000
- Machine: 1500
- Power-saw bench : 1500
- Mining equipment: 1500
- Tractor: 2000
Livestock
- Poultry : 150
- Cows: 2000
- Sheep: 300
- Pigs: 700
