Taxation in Montecara

Taxation in Montecara is administered by the Secretariat for Finance. Montecara is known as a tax haven and offshore financial hub thanks to its lack of income, capital gains, and estate taxes. The state does, however, assess a variety of other taxes and fees that contribute to its overall operating revenue. Montecara operates a single-tier tax system; i.e., there is no dividend tax. There are no extant double taxation avoidance agreements.

Note that this article does not cover profits earned by state-owned enterprises in Montecara such as Poste de Montecara and Aeracara or dividends earned on Montepietà, the sovereign wealth fund.

Excises

Tax stamp for cigarettes sold in Montecara

Excises are per unit taxes paid on specific types of goods.

Type		Rate	2017 revenue (millions Ł)
Alcohol		Ł65/liter of pure ethanol	751.5
Cannabis		Ł15/g	656.9
Electricity		Ł22/MW·h	315.7
Fuel
	Coal and coke	Ł15.50/Gj	29.0
	Diesel	Ł6.35/l	4,171.1
	Gasoline	Ł5.75/l	4,965.5
	Heavy fuel oil	Ł2.85/l	4,796.3
	Kerosene	Ł3.00/l	940.0
	LPG	Ł1.90/l	154.4
	Natural gas	Ł2.55/m³	3,389.0
Tobacco		Ł12/pack of 20 cigarettes Ł7/cigar ≤ 10g Ł9/cigar > 10g Ł0.65/g loose tobacco	2,433.0

Tariffs

The Montecaran tariff system is complex, with rates varying by national origin and type of good, but are generally low by international standards (with some notable exceptions). For instance, the general tariff rate with the Euclean Community is 4%, and other tariffs range from 0% (for many types of goods and utilities) to 45% (for private cars, trucks, and vans). Montecara collected Ł3.215 million in tariff revenue in 2017.

Taxes

Hospitality tax is assessed on spending at hotels, casinos, brothels, and car rental agencies. Land value tax is assessed on the unimproved value of land. Withholding tax is assessed on income earned in Montecara by non-resident foreign workers (entertainers, athletes, etc.).

Type		Rate	2017 revenue (millions Ł)
Air transport tax	Cargo	Ł16/tonne	13.2
	Passengers	5% of ticket price	508.2
Corporation tax
	Income earned in Montecara by entities incorporated abroad	13.5%	735.0
	Income earned abroad by domestically incorporated entities	7.5%	48,205.0
	Domestic income earned by domestically incorporated entities	0%	0
Foreign insurance tax		4.75% of premium	85.1
Franchise tax		Varies	3,961.5
Hospitality tax		22%	2,397.6
Land value tax		0% - 2.75%	17,059.2
Mortgage tax		0.9% of each payment	271.4
Value-added tax		0% - 6%	32,222.7
Withholding tax		18%	401.6

Fees

Type		Rate	Notes
Fees
	Environmental remediation	Varies	Assessed on removing trees and vegetation, construction and demolition, and land grading
	Incorporation	Ł500	Flat fee assessed on incorporating a new business. Montecara has no franchise tax.
	Landing and docking	Varies	Assessed on aircraft and ships using Montecara's port or airport.
	Passenger vehicle registration	Varies	Varies by emissions rating and weight class.
	Road use vignette	Ł4800 per year Ł450 per 30 days	For passenger cars; trucks pay higher rate. Required to operate a foreign vehicle in Montecara.
	Ship registration	Varies	Costs vary with size, class, and age of ship. Montecara has an open ship registry and is a popular flag of convenience.
Fines		Varies
License plate auction revenue		Varies	A license plate auction is held every six months.
Loans		N/A	Includes all Montecaran government debt
Rents and royalties		Varies	Collected on state intellectual property, rent of state property, and collection of natural resources.

Hypothecated revenue

Revenue from these sources is dedicated to specific purposes rather than being paid into the general account.

Type	Rate	Notes
Climate change tax	Ł88.20/tonne emitted CO2‑e	Assessed on emissions of carbon dioxide, methane, nitrous oxide, and fluorinated gases. Revenue is earmarked to subsidize replacement technologies for these gases.
Electronic goods recycling fee	3%	Collected at sale and earmarked for e-waste recycling.
Gifts and endowments	N/A	Gifts and endowments are generally dedicated to specific purposes, such as the maintenance of public spaces or education and research.
Landfill waste collection fee	Ł80/tonne	Assessed on domestic, commercial, and industrial landfill waste and earmarked for processing costs.
License fees	Varies	Collected on licenses related to health and safety, small business operations, professional certification, etc. and used to fund regulation and inspection.
Public broadcasting license	7%	Assessed on cable television, Internet service, and cellular data bills in order to fund Telèradio Montecara.

Discontinued

Salt tax

Salt tax (Montecaran: gabèla) was first imposed under the Latin Republic, and was levied in some form up to the late 19th century. It was for many centuries up to the early modern era the single largest source of income for the Montecaran state, though it was often bitterly resented by common people. At times it even included the compulsory purchase of a fixed quantity of salt per month by every man, woman, and child in Montecara.

Stamp tax

First levied in 1708, stamp tax was imposed on official documents, newspapers, cheques, and other printed matter. It was finally repealed in its entirety in 1953.