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List of forums -> Main forum of the online business game "Virtonomics" -> Taxes are wrong?

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Topic:

Topic created : 27.07.2017, 20:51

edavies8
 
Why is the simulator charging me taxes on a percentage of sales? Corporate taxes are paid on profits, not revenue. If this is a sales tax, the customer pays the sales tax not the company. Just Saying!   

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28.07.2017, 07:06

edavies8
 
That's what I was saying. Companies escrow sales tax from the customers for the government, but don't "pay" them. 
 

28.07.2017, 20:50

Geniticer
Seven years with Virtonomics Winner of the Contest for Managers in the nomination The Standard of Virtonomics
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Geniticer Incorporated
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G Invest
m:
Geniticer International
 
What about the taxable profit?
 
For me it seems like it is just like detailed tax report here. And that makes it noob friendly and it is good in some way,
And yes they could add more detail if they want and if the mass majorty of the player base wants it. But for now the the tax is calculated in what you could see which is revenue minus gross cost(total cost to run buissness).
 
There probably others who can explain it more detailed than me. And thanks for making us concern.
 
Edit: they could had sales tax ye. 
 

31.07.2017, 23:35

edavies8
 
Taxes are currently a % of sales. They should be a % of profit. 
 

1.08.2017, 05:37

Jayman
Jubilee Ten Bronze Ten Nine years with Virtonomics The tender collider, VII-XV places The tender collider, II-III places World Cuisines, VII-XV places World Cuisines, IV-Vi places World Cuisines, the winner
Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, the winner Merchant Medal III level Merchant Medal II level Common amphora of Heraklion
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Winner of the Leaders Contest in the nomination of Consumer Goods Winner of the Leaders Contest in the nomination The Standard of Virtonomics Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination The Standard of Virtonomics
The winner of the contest of directors in the nomination 'IT-standard' Shagreen, VII-XV places The winner of the Leaders Contest in the "Fuel Rivers" nomination Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health Five years with Virtonomics Winner of the Leaders Contest in the nomination Tender mania Winner of the Leaders Contest in the nomination The Standard of Virtonomics
Winner of the Contest for Managers in the nomination Consumer Goods
Golden Ten Merchant Medal I level Nine years with Virtonomics World Cuisines, VII-XV places Shagreen, the winner Shagreen, the winner Shagreen, the winner
Eight years with Virtonomics Broker-Yard Tournament Prizewinner
l:
Jayman Corporation
n:
Jayman Incorporated
m:
Jayman Rulezzz!
 
Taxes are calculated correctly based on a % of profit. If you look at the income statement under the financial report tab, it will show how the taxes are calculated. For example, here's a report from one of my stores:
 
Calculation of tax payments
Revenues $5 322 000 000.00
Prime cost expenses $4 416 617 380.00
Expenses $17 537 368.70
Taxable profit $887 845 251.30
Profit tax (20.00 %) $177 569 050.26 
 

1.08.2017, 16:56

JustNash
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Premium Brands
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Premium Brands
 
looks like you guys are talking about the "CTIE". This is indeed a tax that is calculated based on your sales because it uses an estimate of what your earnings should be. If you are selling stuff from your factory at prime cost, the system will charge you a tax (CTIE). Try selling at double (for example) the prime cost, and you'll notice that you are only taxed on your actual profit. CTIE is a minimum tax level. There are examples in the real world of governments telling companies that they estimate profits to be a minimal % of their sales and as such impose taxes based on these minimum estimated profits. 
 

2.08.2017, 01:49

edavies8
 
What is CTIE? Here's one of my stores:
 
Calculation of tax payments
Revenues ©885 200.00
Prime cost expenses ©330 259.21
Expenses ©245 011.22
Taxable profit ©309 929.57
Profit tax (33.00 %) ©102 276.76
 
Note that 330 259.21 + 245 011.22 + 309 929.57 = 1 120 540.86 > 885 200.00
 
Then on the first page it says this... which I can't make heads or tales of cuz the columns are completely not labeled...
 
Revenues ©1 364 100 ©885 200 v
Expenses ©707 778 ©813 498 ^
Profit ©453 398 -©30 575 v
Taxes ©202 924 ©102 277 v
 

This goes back to my other forum post about the UI needing a drastic upgrade. This shouldn't be this hard to figure out 
 

2.08.2017, 02:55

Jayman
Jubilee Ten Bronze Ten Nine years with Virtonomics The tender collider, VII-XV places The tender collider, II-III places World Cuisines, VII-XV places World Cuisines, IV-Vi places World Cuisines, the winner
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Winner of the Leaders Contest in the nomination of Consumer Goods Winner of the Leaders Contest in the nomination The Standard of Virtonomics Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination The Standard of Virtonomics
The winner of the contest of directors in the nomination 'IT-standard' Shagreen, VII-XV places The winner of the Leaders Contest in the "Fuel Rivers" nomination Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health Five years with Virtonomics Winner of the Leaders Contest in the nomination Tender mania Winner of the Leaders Contest in the nomination The Standard of Virtonomics
Winner of the Contest for Managers in the nomination Consumer Goods
Golden Ten Merchant Medal I level Nine years with Virtonomics World Cuisines, VII-XV places Shagreen, the winner Shagreen, the winner Shagreen, the winner
Eight years with Virtonomics Broker-Yard Tournament Prizewinner
l:
Jayman Corporation
n:
Jayman Incorporated
m:
Jayman Rulezzz!
 
edavies8
What is CTIE? Here's one of my stores:
 
Calculation of tax payments
Revenues ©885 200.00
Prime cost expenses ©330 259.21
Expenses ©245 011.22
Taxable profit ©309 929.57
Profit tax (33.00 %) ©102 276.76
 
Note that 330 259.21 + 245 011.22 + 309 929.57 = 1 120 540.86 > 885 200.00

330 259.21 + 245 011.22 + 309 929.57 = 885 200.00 according to my calculator.
 
885 200.00 - 330 259.21- 245 011.22 = 309 929.57
 
You are paying 33% tax on 309 929.57 of profit, not on your sales of 885 200.00.
 

 
Then on the first page it says this... which I can't make heads or tales of cuz the columns are completely not labeled...
 
Revenues ©1 364 100 ©885 200 v
Expenses ©707 778 ©813 498 ^
Profit ©453 398 -©30 575 v
Taxes ©202 924 ©102 277 v
 
 
This goes back to my other forum post about the UI needing a drastic upgrade. This shouldn't be this hard to figure out

That page is labeled incorrectly. The "profit" is actually your cash flow which is simply revenues minus expenses and is not used to calculate taxes. 
 

3.08.2017, 09:06

Last time edited : 3.08.2017, 09:13

edavies8
 
I must have "fat-fingered" the calculator there...
 
I don't know how taxes are calculated in Lithuania, but in America taxable profit and operating profit are one and the same. If the operation is running at a loss (which it is my operating expenses are higher than my revenue) then there is NO taxable income. That's what irks me. Where are they getting "Prime Cost expenses" & "Expenses" operating expenses are listed below at a different figure. Prime Cost expenses are not a thing in America... at least not that they teach in business school!
 
That's why its called NOPAT... net operating profit after tax. Because taxes are on operating profit. Either they do things differently under IFRS in Europe, or the dev team is calculating NOPAT incorrectly... tell me if there's a third option. 
 

3.08.2017, 18:26

Last time edited : 6.08.2017, 00:21

Jayman
Jubilee Ten Bronze Ten Nine years with Virtonomics The tender collider, VII-XV places The tender collider, II-III places World Cuisines, VII-XV places World Cuisines, IV-Vi places World Cuisines, the winner
Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, the winner Merchant Medal III level Merchant Medal II level Common amphora of Heraklion
Broker-Yard Tournament Prizewinner Broker-Yard Tournament Prizewinner Broker-Yard Tournament Prizewinner Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health The winner of the Industry Competition Winner of the Leaders Contest in the nomination Tender mania Winner of the Leaders Contest in the nomination Quality label
Winner of the Leaders Contest in the nomination of Consumer Goods Winner of the Leaders Contest in the nomination The Standard of Virtonomics Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination The Standard of Virtonomics
The winner of the contest of directors in the nomination 'IT-standard' Shagreen, VII-XV places The winner of the Leaders Contest in the "Fuel Rivers" nomination Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health Five years with Virtonomics Winner of the Leaders Contest in the nomination Tender mania Winner of the Leaders Contest in the nomination The Standard of Virtonomics
Winner of the Contest for Managers in the nomination Consumer Goods
Golden Ten Merchant Medal I level Nine years with Virtonomics World Cuisines, VII-XV places Shagreen, the winner Shagreen, the winner Shagreen, the winner
Eight years with Virtonomics Broker-Yard Tournament Prizewinner
l:
Jayman Corporation
n:
Jayman Incorporated
m:
Jayman Rulezzz!
 
Prime cost is the cost of goods sold. For example, if you buy washing machines for 7K and sell them for 27K, your prime cost is 7K so you pay tax on 20K profit per item minus operating expenses (rent, salary, etc.)
 
The report includes raw materials purchase as part of operating expenses. Purchase of raw materials isn't an operating expense that reduces taxable income until the items are sold or written off. Although the labels are incorrect, the taxes are calculated correctly. 
 

3.08.2017, 20:21

Last time edited : 3.08.2017, 20:22

edavies8
 
No, according to what you're saying they're taxing my Gross Margin, not Operating Profit... smh
 
cuz I have enterprises that clearly say negative operating profit, but I'm still paying taxes 
 

4.08.2017, 03:35.     Subject: Tax

Geniticer
Seven years with Virtonomics Winner of the Contest for Managers in the nomination The Standard of Virtonomics
Single corporate chevron Six years with Virtonomics
Seven years with Virtonomics Top Technologist Norway retail leader Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination The Standard of Virtonomics
l:
Geniticer Incorporated
n:
G Invest
m:
Geniticer International
 
We may need to have it changed to tax according to the operatin profit instead? 
 

4.08.2017, 18:21

edavies8
 
YES, taxes are paid on operating profit 
 

5.08.2017, 15:24

gamerz300
Masking mustache Panda Panda Mandarin duck Mandarin duck Honey Barrel Merit for the Uzbekistan of level I Seven years with Virtonomics
One year with Virtonomics
Seven years with Virtonomics
m:
Egg-Roll International
 
Note: incidentally deleted the original...
 
Seeing as I'm literally king of losses w/o going under...
 



 
It's CTIE that you're getting taxed on likely, however it's also possible to lose money with profit taxes as well.

 
2 topics that could be helpful
 
https://virtonomics.com/mary/forum/forum_new/13/topic/105977/view ...
 
https://virtonomics.com/mary/forum/forum_new/13/topic/105965/view ...  
 

5.08.2017, 16:41

Last time edited : 5.08.2017, 16:41

gamerz300
Masking mustache Panda Panda Mandarin duck Mandarin duck Honey Barrel Merit for the Uzbekistan of level I Seven years with Virtonomics
One year with Virtonomics
Seven years with Virtonomics
m:
Egg-Roll International
 
Sorry, after reading the whole topic (again), you're getting taxed right. If your going into the negatives it's due to one of 3 things. Improper pricing, not enough sales, or too high of fixed expenses.
 
It's likely a combination of one of the 2. The image of my store shows 20 million in fixed costs that are causing loss of money. So try comparing my image to your unit.
 
Based on the units you're trying to sell, your advertising is way too high both average 22-25%. So your taxes are right but your spending too much on other things. 
 

6.08.2017, 00:17

Jayman
Jubilee Ten Bronze Ten Nine years with Virtonomics The tender collider, VII-XV places The tender collider, II-III places World Cuisines, VII-XV places World Cuisines, IV-Vi places World Cuisines, the winner
Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, the winner Merchant Medal III level Merchant Medal II level Common amphora of Heraklion
Broker-Yard Tournament Prizewinner Broker-Yard Tournament Prizewinner Broker-Yard Tournament Prizewinner Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health The winner of the Industry Competition Winner of the Leaders Contest in the nomination Tender mania Winner of the Leaders Contest in the nomination Quality label
Winner of the Leaders Contest in the nomination of Consumer Goods Winner of the Leaders Contest in the nomination The Standard of Virtonomics Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination The Standard of Virtonomics
The winner of the contest of directors in the nomination 'IT-standard' Shagreen, VII-XV places The winner of the Leaders Contest in the "Fuel Rivers" nomination Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health Five years with Virtonomics Winner of the Leaders Contest in the nomination Tender mania Winner of the Leaders Contest in the nomination The Standard of Virtonomics
Winner of the Contest for Managers in the nomination Consumer Goods
Golden Ten Merchant Medal I level Nine years with Virtonomics World Cuisines, VII-XV places Shagreen, the winner Shagreen, the winner Shagreen, the winner
Eight years with Virtonomics Broker-Yard Tournament Prizewinner
l:
Jayman Corporation
n:
Jayman Incorporated
m:
Jayman Rulezzz!
 
gamerz300
Sorry, after reading the whole topic (again), you're getting taxed right. If your going into the negatives it's due to one of 3 things. Improper pricing, not enough sales, or too high of fixed expenses.

I have many subdivisions with negative "operating profit" that pay substantial taxes and it's almost always due to purchasing inventory. For example, if your store earns 100M every update and you purchase an additional 300M of inventory, the next update will incorrectly show an "operating profit" of negative 200M because it wrongly considers the 300M of inventory purchased as an operating expense. Fortunately, taxes are calculated correctly based on the actual operating profit of 100M. 
 

List of forums -> Main forum of the online business game "Virtonomics"-> Taxes are wrong?

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