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, estate, and value-added or sales 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.
General taxes
Revenue from these taxes is paid into the general account in the Montecaran treasury to be used for any purpose the state designates.
| Type | Rate | Notes | |
|---|---|---|---|
| Excises | |||
| Alcohol | Ł65/liter of pure ethanol | ||
| Cannabis | Ł15/g | Dried plant matter or extracts | |
| Petroleum fuel | Ł5.90/liter + Ł0.10/liter EC Carbon tax | ||
| Natural gas | Ł2.85/m³ + Ł0.15/m³ EC Carbon tax | ||
| Tobacco | Ł40.75/pack of 20 cigarettes Ł7.50/cigar ≤ 10g Ł8.25/cigar > 10g Ł1.50/g loose tobacco |
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| Corporation tax | 13.5% on income earned in Montecara by businesses incorporated in foreign states 7.5% on income earned abroad by domestically incorporated entities 0% on domestic income earned by domestically incorporated entities |
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| Hospitality tax | 22% | Assessed on spending at hotels, casinos, brothels, and car rental | |
| Land value tax | 0% - 2.75% | Assessed on the unimproved value of land | |
| Tariffs | Varies | The Esquarian Community tariff regime, including Carbon Tariff, applies. See Comprehensive Common Market Act 2017. | |
| Withholding tax | 18% | Assessed on income earned in Montecara by non-resident foreign workers (entertainers, athletes, etc.) | |
Non-tax general revenue
Revenue from these non-tax sources is paid into the general account.
| 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. Applied on top of Esquarian Community carbon tax as required by Climate Change Act 2016. |
| 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.