User:Montecara/Sandbox 11

Taxation in Montecara is administered by the Secretariat of 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.

Direct taxes

Montecara does not assess a personal income tax or a capital gains tax.

Corporate income tax

Assessed on net profits of corporations, cooperatives, and other ventures. Resident companies are taxed on their worldwide income, except for profits derived from foreign branches and foreign immovable property, which are exempt. Nonresident companies are taxed on permanent establishment/branch income and/or immovable property located in Montecara. The first Ł25,000 in profit earned domestically is exempt.

Corporate income tax rates

Category	Rate	Notes
Base rate	13.5%
Concessionary rate	4.5%	Foundations, non-profit organizations, religious entities
Exempt	0%	Registered charities

Transfer tax

Transfer tax is charged when certain types of property are sold, traded, or given away. Montecara charges a transfer tax on three categories of property: real property, meaning land and buildings; securities, which are mostly stocks and bonds; and cryptocurrency.

Montecara does not assess estate tax or gift tax.

Transfer tax rates

Category	Rate
Cryptocurrency	0.50%
Real property	1.125%
Securities	0.015%

Land value tax

Land value tax is assessed on the unimproved value of land.

Land value tax rates

Category	Rate	Description
A	2.75%	Standard rate
B	1.50%	Cultural and religious institutions
C	0.50%	Agricultural or fallow land
D	0.25%	Nature areas
Exempt	N/A	Diplomatic and consular missions; international organizations

Withholding tax

Withholding tax is assessed on certain payments to non-residents. For instance, the withholding tax on income is levied on income earned in Montecara by a worker domiciled abroad, and the technical service fee withholding tax is levied on technical and professional service fees paid to non-residents.

Withholding tax rates

Category	Rate
Dividends	17%
Income	22%
Interest	17%
Remittances	17%
Royalties	10%
Technical service fees	17%

Indirect taxes

Excises

Tax stamp for cigarettes sold in Montecara

Excises are per unit taxes paid on specific items when they are created or imported.

Air and sea transportation taxes

Category	Rate
Transportation of persons by air	12.5% of ticket price
Transportation of cargo by air	Ł16/tonne
Transportation of persons by water	8.5% of ticket price

Alcohol excise taxes

Category	Rate
Beer or cider ≤8% abv	Ł225/hl
Beer or cider >8% abv	Ł375/hl
Spirits	Ł160/l of pure ethanol
Wine ≤15% abv	Ł365/hl
Wine >15% abv	Ł725/hl

Cannabis and tobacco excise taxes

Category	Rate
Cannabis (dried plant matter)	Ł15/g
Other cannabis products	35% of wholesale price
Cigarettes (pack of 20)	Ł12
Cigar ≤ 10g	Ł7
Cigar > 10g	Ł9
Loose tobacco	Ł0.65/g
Other nicotine-containing products	50% of wholesale price

Environmental taxes

Category	Rate
Fluorinated gases
Landfill waste	Ł80/tonne
Ozone-depleting substances

Documentary taxes

Category	Rate
Insurance	4.75% of premium
Reinsurance	1.25% of premium
Mortgages	0.25% of payments against principal and interest

Fuel and energy taxes

Category	Rate
Diesel	Ł6.35/l
Kerosene for use in aviation	Ł2.15/l
Kerosene for other uses	Ł3.00/l
Gasoline	Ł5.75/l
Aviation gasoline
Liquefied petroleum gas (LPG)	Ł1.90/l
Compressed natural gas (CNG)
Liquefied hydrogen
Liquid fuel derived from biomass
Liquefied natural gas (LNG)
Heavy fuel oil	Ł2.85/l
Coal and coke	Ł15.50/Gj

Utility taxes

Category	Rate
Electricity	Ł22/MW·h
Natural gas	Ł2.55/m³
Water

Tariffs

Montecara is a free port and levies tariffs on only two line items: fresh fish at 3.5% and works of art at 6%. The overall weighted mean tariff rate is 0.0%. Receipts from tariffs totaled approximately Ł133 million (€26 million) in 2019.

Value-added tax

Value-added tax (VAT) is levied on the consumption of goods and services.

There are four rate categories for the purpose of assessing VAT: standard (20%), reduced (12%), zero (0%), and exempt. The reduced rate applies to food (non-prepared), animal feed and fertilizer, livestock and fishstock, seeds and living plants for cultivation, grain, medication, and utilities. The zero rate applies to direct deliveries of goods abroad, cross-border transport services, and services for customers abroad. Rent and the sale of real estate, banking and insurance services, postal services, medical and dental services, welfare and social services, and education are exempt.

An environmental surtax of 4% is added to the applicable rate for airline and cruise tickets, fishing equipment, fossil fuels, single-use plastics, motor vehicles, electronic goods, tires, and household appliances.

Discontinued

Straits tolls

Thanks to its strategic location in the Aurean Straits, Montecara was for centuries able to tax the ships and goods that traversed its littoral. Vessels refusing to stop and be taxed were summarily bombarded by the extensive network of coastal artillery. This was the major source of funding between the fourteenth and nineteenth centuries. Straits tolls ended with the Gaullican annexation and were not reinstated when Montecara regained independence.

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.