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Taxation in Caphiria: Difference between revisions
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'''Taxation in Caphiria''' is levied by the [[Government of Caphiria]] and is collected by the [[Ministry of the Treasury]] | '''Taxation in Caphiria''' is levied by the [[Government of Caphiria]] and is collected by the [[Ministry of the Treasury (Caphiria)|Ministry of the Treasury]]. | ||
While the Department of Taxation and Fiscal Affairs (DTFA) is responsible for developing economic and public finance policies, the ''lex tributum'' (tax code), taxes, tariffs, and duties are solely set by the [[National Assembly (Caphiria)|National Assembly]]. At the same time, the [[Central Tax Service]] (within the DTFA) is responsible for tax collection. There are three types of Quaestores - ''supremus'', ''provincialis'', and ''oppidanus,'' representing national, provincial, and local tax jurisdictions. | |||
Caphiria's tax system utilizes a base proportional tax instead of using its [[Stratification in Caphiria#Social Class|social stratification system]] for a class-based progressive tax rate. This tax-by-social-class does not apply to 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. | Caphiria's tax system utilizes a base proportional tax instead of using its [[Stratification in Caphiria#Social Class|social stratification system]] for a class-based progressive tax rate. This tax-by-social-class does not apply to 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. | ||
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Since 1981, Caphiria has used a proportional corporate tax; 20% applies to total annual revenue of up to $1 million, 12.3% applies to all income up to $1 billion, and a 10% tax for all revenue exceeding $1 billion. | Since 1981, Caphiria has used a proportional corporate tax; 20% applies to total annual revenue of up to $1 million, 12.3% applies to all income up to $1 billion, and a 10% tax for all revenue exceeding $1 billion. | ||
Before 1980, Caphiria used a flat corporate tax rate of 20%. Still, sweeping economic referendums were passed by Imperator Bogdanko in 1980, which got rid of the flat tax in favor of 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 already registered and paying the 20% tax before 1980 permission to 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. | Before 1980, Caphiria used a flat corporate tax rate of 20%. Still, sweeping economic referendums were passed by [[Bogdanko|Imperator Bogdanko]] in 1980, which got rid of the flat tax in favor of the proportional system used today. As part of the [[2002 Economic Crisis]], [[Arenris|Imperator Arenris]] reached a compromise with the Senate that would grant corporate entities already registered and paying the 20% tax before 1980 permission to 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. | 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. | ||
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Foreign tourists cannot recover VAT on purchases made in Caphiria. | Foreign tourists cannot recover VAT on purchases made in Caphiria. | ||
====== Drug tax ====== | ====== Drug tax ====== | ||
Recreational drug use is legal and prevalent in Caphiria, despite being discouraged among the patrician order, who generally view recreational drug use with disdain. The Narcotics Excise Tax is set at 35% and applied as a sales tax at a licensed ''apothecarius,'' or drug pharmacy. Half of the revenue from the narcotics tax is used to fund drug treatment facilities and provide assistance to treat and combat drug addiction. | Recreational drug use is legal and prevalent in Caphiria, despite being discouraged among the patrician order, who generally view recreational drug use with disdain. The Narcotics Excise Tax is set at 35% and applied as a sales tax at a licensed ''[[apothecarius]],'' or drug pharmacy. Half of the revenue from the narcotics tax is used to fund drug treatment facilities and provide assistance to treat and combat drug addiction. | ||
====== Gambling tax ====== | ====== Gambling tax ====== | ||
Gambling in Caphiria is highly regulated; Caphiria levies excise taxes on both legal and illegal gambling transactions, as well as taxes on the turnover, player loss, and net profit; different gambling services are also taxed in different ways. As gambling operators must obtain a license to offer their services, specific fees must also be paid. | Gambling in Caphiria is highly regulated; Caphiria levies excise taxes on both legal and illegal gambling transactions, as well as taxes on the turnover, player loss, and net profit; different gambling services are also taxed in different ways. As gambling operators must obtain a license to offer their services, specific fees must also be paid. | ||
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Prostitution is legal and highly regulated; like gambling in Caphiria, activities like pimping and street-walking are restricted or generally illegal. There is a base VAT rate of 30% applied on all prostitution transactions, and additional taxes are levied on the prostitute, the client, and the brothel. This base tax applies to stripteases, peep shows, porn cinemas, sex fairs, massage parlors, and licensed prostitution. | Prostitution is legal and highly regulated; like gambling in Caphiria, activities like pimping and street-walking are restricted or generally illegal. There is a base VAT rate of 30% applied on all prostitution transactions, and additional taxes are levied on the prostitute, the client, and the brothel. This base tax applies to stripteases, peep shows, porn cinemas, sex fairs, massage parlors, and licensed prostitution. | ||
The client, in addition to the 30% VAT, must pay a $5 fine, which goes to supplying brothels with condoms, and a $5 tax per act of prostitution, with the proceeds going to the College of Prostitution. | The client, in addition to the 30% VAT, must pay a $5 fine, which goes to supplying brothels with condoms, and a $5 tax per act of prostitution, with the proceeds going to the [[College of Prostitution]]. | ||
Prostitutes have to pay income taxes, and because prostitution is primarily a cash business, the Caphirian government initiated a system where prostitutes have to pay their taxes in advance, a set amount per day, to be collected and paid to tax authorities by the brothel owners. Prostitutes must also pay a monthly $155 registration fee, half of which goes to funding the College of Prostitution. | Prostitutes have to pay income taxes, and because prostitution is primarily a cash business, the Caphirian government initiated a system where prostitutes have to pay their taxes in advance, a set amount per day, to be collected and paid to tax authorities by the brothel owners. Prostitutes must also pay a monthly $155 registration fee, half of which goes to funding the College of Prostitution. | ||