Taxation in Caphiria: Difference between revisions
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== Corporate taxes == | == Corporate taxes == | ||
Corporate entities registered and/or based in Caphiria are subject to a Corporate Income Tax. Corporations that are exempt from corporate tax are charitable foundations, church institutions and sports clubs. | |||
Since 1981, Caphiria uses a proportional corporate tax; 20% applies to total annual revenue of up to $1 million, 12.3% applies to all revenue up to $1 billion, and a 10% tax for all revenue exceeding $1 billion. | |||
Prior to 1980, Caphiria used a flat corporate tax rate of 20%, but sweeping economic referendums were passed by Imperator Bogdanko in 1980 which got rid of the flat tax in favor for the proportional system used today. As part of the 2002 Economic Crisis, Imperator Arenris reached a compromise with the Senate that would grant corporate entities that were both already registered, and paying the 20% tax prior to 1980, permission pay a flat tax of 21.3%. This rate is called the ''hereditas tributum,'' or Legacy Corporate Tax, and is one of the most coveted things within the Caphirian business world. | |||
Capital gains and dividends derived from qualifying subsidiaries are not taxed, as is income attributable to a foreign business enterprise. Practically all business expenses are fully deductible due to the vague language in Caphiria's tax code; "Deductible expenses must be economically justified and properly evidenced with documents". Taxpayers resolve disputes through court litigation; the [[Court of Appeals (Caphiria)|Court of Appeals]] has handled so many accounting cases that its resolutions and rulings form a separate layer of tax law that augments the tax code. | |||
== Goods & Services taxes == | == Goods & Services taxes == | ||
== Wealth/Financial taxes == | == Wealth/Financial taxes == | ||
Revision as of 22:55, 1 February 2022
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Taxation in Caphiria is levied by the Government of Caphiria is collected by the Ministry of the Treasury; specifically, the Office of Quaestores is responsible for the collection of taxes and financial auditing while the Office of Aediles is responsible for approving public fund withdrawals. In 2025, total tax revenue was 30.3% of Caphiria's GDP, or $16.1 trillion.
In Caphiria, the lex tributum (tax code), taxes, tariffs, and duties are solely set by the National Assembly while the Office of Quaestores (within the Ministry of the Treasury) is responsible for tax collection. There are three types of Quaestores - supremus, provincialis, and oppidanus, which represent national, provincial and local tax jurisdictions.
Caphiria's tax system utilizes a base proportional tax on top of using its social stratification system for a class-based progressive tax rate. This tax-by-social-class does not apply for every type of tax category, of which there are 6: Income tax, corporate tax, goods and services tax, wealth/financial tax, and property tax, as well as various fees. Caphiria does not have a capital gains tax.
Income taxes
According to Caphiria's tax code, there are two types of Personal Income Tax. Residential income tax is defined as "any individual (Citizen) living within the Imperium is subject to taxation on all income derived from sources within or outside the Imperium" whereas non-resident is defined as "any individual (Citizen) living abroad more than 183 days shall pay individual income tax only on the income derived or sourced from the Imperium.
The base tax rate for residents is 6.05% and 21.46% for non-residents.
Additionally, there is a payroll tax paid by employers based on total remuneration of all employees.
| Tax category | Base tax rate | Tax rate by social class | ||||
|---|---|---|---|---|---|---|
| Peregrini | Lower-Plebeian | Upper-Plebeian | Equite | Patrician | ||
| Personal Income Tax (Resident) | 6.05% | 18.95% | 9.95% | 10.45% | 13.85% | 16.94% |
| Personal Income Tax (Non-Resident) | 21.46% | 18.95% | 10.55% | 11.95% | 14.25% | 16.94% |
| Payroll Tax | 4.25% | 2.25% | 3.75% | 5.75% | 6.00% | 6.75% |
Corporate taxes
Corporate entities registered and/or based in Caphiria are subject to a Corporate Income Tax. Corporations that are exempt from corporate tax are charitable foundations, church institutions and sports clubs.
Since 1981, Caphiria uses a proportional corporate tax; 20% applies to total annual revenue of up to $1 million, 12.3% applies to all revenue up to $1 billion, and a 10% tax for all revenue exceeding $1 billion.
Prior to 1980, Caphiria used a flat corporate tax rate of 20%, but sweeping economic referendums were passed by Imperator Bogdanko in 1980 which got rid of the flat tax in favor for the proportional system used today. As part of the 2002 Economic Crisis, Imperator Arenris reached a compromise with the Senate that would grant corporate entities that were both already registered, and paying the 20% tax prior to 1980, permission pay a flat tax of 21.3%. This rate is called the hereditas tributum, or Legacy Corporate Tax, and is one of the most coveted things within the Caphirian business world.
Capital gains and dividends derived from qualifying subsidiaries are not taxed, as is income attributable to a foreign business enterprise. Practically all business expenses are fully deductible due to the vague language in Caphiria's tax code; "Deductible expenses must be economically justified and properly evidenced with documents". Taxpayers resolve disputes through court litigation; the Court of Appeals has handled so many accounting cases that its resolutions and rulings form a separate layer of tax law that augments the tax code.