User:Montecara/Sandbox 11: Difference between revisions
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=== Land value tax === | === Land value tax === | ||
Land value tax is assessed on the unimproved value of land. It currently stands at 2.75% with limited exemptions (diplomatic and consular missions and international organizations). | Land value tax is assessed on the unimproved value of land. It currently stands at 2.75% with limited exemptions (e.g. diplomatic and consular missions and international organizations). | ||
=== Withholding tax === | === Withholding tax === | ||
Revision as of 07:54, 15 January 2024
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.
Residency is established for tax purposes by being physically present or employed in Montecara for 183 days in a calendar year.
Direct taxes
Montecara does not assess a personal income tax or a capital gains tax.
Corporate income tax
Corporate income tax is assessed on the net profits of corporations, cooperatives, and other business ventures. Resident companies are taxed on their worldwide income, except for profits derived from foreign branches and foreign immovable property, which are exempt.
Corporate income is taxed at two rates: a "trading rate" of 13.5% applies to regular income earned from business activities, and a higher "passive rate" of 22% applies to earnings made on non-business activities such as rents, investments, and interest.
Dividend tax
Foreign worker tax
Foreign worker tax is charged to employers for each foreign employee hired. The rate depends on the employer’s industry and the ratio of foreigners to Montecarans employed in the company.
Transfer tax
Transfer tax is charged to the buyer or recipient 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.
| Category | Rate |
|---|---|
| Cryptocurrency | 0.50% |
| Real property | 1.125% |
| Securities | 0.015% |
Surtaxes apply to certain transfers of real property determined by the residency status of the buyer, the use of the property (residential, commercial, or industrial), the holding period of the property, and the number of properties owned. These surtaxes can increase the overall transfer tax rate up to 15%.
Land value tax
Land value tax is assessed on the unimproved value of land. It currently stands at 2.75% with limited exemptions (e.g. diplomatic and consular missions and 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.
| Category | Rate |
|---|---|
| Dividends | 17% |
| Income | 22% |
| Interest | 17% |
| Remittances | 17% |
| Royalties | 10% |
| Technical service fees | 17% |
Indirect taxes
Excises
Excises are per unit taxes paid on specific items when they are created or imported.
| 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 |
| Category | Rate |
|---|---|
| Cannabis (dried plant matter) | Ł2,000/kg |
| Other cannabis products | 35% of wholesale price |
| Cigarettes (pack of 20) | Ł12 |
| Cigar ≤ 10g | Ł7 |
| Cigar > 10g | Ł9 |
| Loose tobacco | Ł700/kg |
| Other nicotine-containing products | 50% of wholesale price |
| Category | Rate |
|---|---|
| Insurance | 4.75% of premium |
| Reinsurance | 1.25% of premium |
| Mortgages | 0.25% of payments against principal and interest |
| Category | Rate |
|---|---|
| Fluorinated gases | |
| Landfill waste | Ł80/tonne |
| Ozone-depleting substances |
| 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 |
| 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 in the fifth century CE and was levied in some form up to the late nineteenth century. It was for many centuries the single largest source of revenue 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.