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Taxation in Caphiria: Difference between revisions
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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. | 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 == | ||
Caphiria has a '''General Consumption Tax''' (GCT) of 10% which applies to most "non-essential" goods and services; "essential" goods and services, such as groceries, electricity, etc. fall under the Necessity Consumption Tax (NCT) which is taxed at 5%. The General Consumption Tax is a broad-based system with few exemptions and is applied to the final price of the product or service being purchased and goods and services are advertised as GCT inclusive. | Caphiria has a '''General Consumption Tax''' (GCT) of 10% which applies to most "non-essential" goods and services; "essential" goods and services, such as groceries, electricity, etc. fall under the '''Necessity Consumption Tax''' (NCT) which is taxed at 5%. The General Consumption Tax is a broad-based system with few exemptions and is applied to the final price of the product or service being purchased and goods and services are advertised as GCT inclusive. | ||
GCT -registered organisations and individuals pay GCT only on the difference between GCT-liable sales and GCT-liable supplies (i.e., they pay GCT on the difference between what they sell and what they buy: income less expenditure). This is accomplished by reconciling GCT received (through sales) and GCT paid (through purchases) at regular periods (typically every two months, with some qualifying companies opting for one-month or six-month periods), then either paying the difference to the Ministry of the Treasury if the GCT collected on sales is higher or receiving a refund from the Ministry if the GCT paid on purchases is higher. | GCT -registered organisations and individuals pay GCT only on the difference between GCT-liable sales and GCT-liable supplies (i.e., they pay GCT on the difference between what they sell and what they buy: income less expenditure). This is accomplished by reconciling GCT received (through sales) and GCT paid (through purchases) at regular periods (typically every two months, with some qualifying companies opting for one-month or six-month periods), then either paying the difference to the Ministry of the Treasury if the GCT collected on sales is higher or receiving a refund from the Ministry if the GCT paid on purchases is higher. | ||