Profit tax - is the basic tax levied on transactions (sales from warehouses, vacation of manufactured products by production units, retail sales in stores) and in the provision of services.
According to the current algorithm, the tax is accrued 'only' 'for profits directly to this game recount of goods sold or services rendered. Such an algorithm eliminated the possibility of double taxation in undelivered deliveries, which are common among beginners quite often.
Profit tax (PT) is calculated by the formula:
PT = (R - PC - C) × (PT_rate/100), where:
R — actual revenue from the sale of products or services;
PC — estimated 'prime costs' of the sold products or expendables spent on the provision of services, for enterprises in the service sector without consumables PC = 0;
C — expenses of the enterprise not included in the SS, but lowering the tax base in this specific turn;
PT_rate — profit tax rate (%).
Cost items that are not included in the cost but reduce the tax base:
- For production units, only storage costs are not included in the SS of manufactured products, but they reduce the tax base;
- In warehouses, warehouse costs, rental of premises and payments for innovations are taken into account;
- In stores and at service enterprises, storage costs, rental of premises, innovation payments, salary costs, advertising costs, management expenses and maintenance costs (for the service sector) are taken into account.
Expenses for the purchase of goods are not reflected in the cost price in absolute terms, 'but in accordance with the used up (sold or used in production) inventory' . Thus, it is possible that a unit has a negative balance (for example, due to large volumes of purchases for future use), but still pays income tax.
The tax of production units 'cannot be zero' , even if a player, for example, sells manufactured products below cost. The minimum tax amount, in any case paid from a unit of goods produced, is determined by the basic profitability of production (see the description of the `` UTII below). At the same time, the tax on the warehouse, trade and service units in the game may not be levied if the taxable base is less than or equal to zero.
Each newly registered company is granted tax holidays with a duration of '26 recounts' , provided that the company grows at a moderate pace (without external infusions).
Each company which has just been registered is provided with the right for tax holiday which lasts for 26 updates on the condition that the development of the company is moderate (without external investments).
Therefore, during the first 26 updates of their existence companies are taxed according to the following table:
Total, in the first 26 recounts of the existence of the company taxes are levied in accordance with the table:
|Profit tax rate||Tax break conditions|
|0%||Assets - less than 2 mln.|
|50%||Assets - less than 5 mln.|
|100%||Assets - over 5 mln.|
The transition from tax holidays to the standard taxation scheme is carried out automatically in recalculation after the expiration of a 26-day period. Each recalculation is calculated separately, that is, if the company during the period of the possible holidays (26 recounts) goes beyond the border values of the value of assets, and then returns to them, then it again has the right to tax relief.
Transfer from tax holiday to standard taxation is automatic and happens during the update upon the expiration of 26 days. Every update is calculated separately, i.e. if a company oversteps the limits of the border indices of assets cost during the period when tax holiday may be brought to effect (26 updates) and then returns to follow the limits, the company has the right to get another easing of the taxation scheme.
TAX ON THE SALE OF TECHNOLOGIES AND LICENSES
Sale of technologies
The tax is collected from the seller in the moment of purchase. The rate is single and is equal to 7% from the selling value of the technology.
Sale of licenses
The tax is collected from the seller in the moment of installation. The rate is single and is equal to 7% from the selling value of the license or, if the price has been lowered, the percentage is drawn from one fiftieth of the maximal price of the relevant technology on the common market of the level which is less or equal to the one being installed.
PROPERTY SALE TAX
Property sale tax is a tax collected upon any kind of sale of property via the Enterprise market or Enterprise auctions. The base tax rate is 10% from the selling value of the property. If the receipts from the sale of an enterprise exceed the cost of the enterprise’s assets, the tax is calculated as 10% from the receipts. If not, the tax is calculated as 10% from the cost of assets of the enterprise.
COMMON TAX FOR IMPUTED EARNINGS
Common tax for imputed earnings (CTIE) of Virtonomics is the tax which determines the minimal sum of the tax on the production activity (is not applied to commercial subdivisions).
CTIE is not an extra tax to the profit tax for the operating subdivisions collected in Virtonomics.
The scheme of collecting the CTIE is activated in case the products are sold for the price which is lower than their cost price, or if the products are sold with the rate of profit lower than the basic production profitability equal to the regional profit tax rate (specific connection between the rate of profit and the profit tax rate in the region is conditional).
If the produced goods are sold for the price where the rate of profit is higher than the regional profit tax rate, the CTIE is not charged and a player pays the profit tax only.
CTIE for one item of produced and sold goods is calculated according to the following formula:
CTIE= CC × (PT_rate/100) × (IEproduct/100) where:
CC — estimated production costs of produced goods;
PT_rate - profit tax rate (%);
IEproduct – imputed earnings (%) for a specific product.
The red part of the formula is taxable income determined by the product of "CC" (estimated production cost of produced goods) and basic production profitability which (in Virtonomics) is equal to the PT_rate (profit tax rate (per cent) in the specific region where the production subdivision is situated).
The blue part of the formula is the tax rate of the CTIE.
The CTIE rate is a macroeconomic way to control the efficiency of different kinds of production.
In Virtonomics for the productions which are currently highly profitable and massive we use the tax rate up to 1,0 (100%).
I.e. the CTIE is charged from full taxable profit without any kind of benefits.
For the productions which are not developed enough according to the level of supplies and other analytical data we use differentiated benefits for each kind of products. The benefits can be quite significant: CTIE for some kinds of products are up to 20 times lower (when the imputed earnings for the product are equal to 5%)
In order to learn the current CTIE rates you need Analytics ► Macroeconomics ► Choose any country ► Region, and then from the list of the cities switch to the CTIE rates.