Taxes
Taxes begin at Level 8 (Entrepreneur)
Tax Overview
- Tax consists of an Income Tax (country-wide) and a Real Estate tax (city-specific). Tax bills are sent on the first of the month.
- When a tax bill is assessed, any affected companies will receive an alert informing them that they have 10 days to pay. During those 10 days, they may proceed with business as usual. However, once those 10 days have passed, the tax bill will become Overdue.
- If you borrow money (issue bonds) it will be used to pay back taxes before you receive any cash.
- The Tax Center, available through your Finance Department, can provide estimates of what your next tax bill will be. Because they are only estimates it may not be perfectly accurate, but can help you plan how much cash to keep on hand.
Overdue Taxes
- Overdue Taxes function much the same was as overdue bonds. When your business owes taxes, you cannot build, expand, or upgrade any buildings. Purchases via invoice or auction may also be limited.
- Aside from not being able to construct, there is no other penalty for late payment of taxes. It does not affect your credit rating.
- If taxes go unpaid through the month, the next month's bill will be added to them, and instead of having a 10 day grace period the bill will be due immediately.
Example: On January 1, SmithCo receives a bill for β100,000 in taxes. Until January 11 they may continue to build and expand their facilities.
On January 11, SmithCo doesn't have enough cash to pay its taxes, and isn't willing to borrow. Their taxes become overdue and now they cannot start new construction. This continues for the rest of the month.
On February 1, SmithCo receives a new bill for β120,000. This adds on to the old bill for a total of β220,000. It is still overdue, so they still cannot expand or build anything new.
On February 2, SmithCo pays their bill. Now their taxes are paid in full, and they may begin new construction. The next bill will not be assessed until March 1, and not become due until March 11.
Income Tax
- Simunomics uses a simple Flat Tax with two components: one deduction and one rate.
- The current deduction is β10,000,000.00. Only monthly income beyond this amount is taxable.
- The current tax rate is 15.0%.
- Your monthly income is the sum of Net Income from the last four Weekly Accounting Statements. If less than the deduction, no tax is due for the month.
Example: Simply Delicious Orchards had this Net Income over the last 4 weeks:
- Earned β50 million
- Earned β64 million
- Lost β25 million
- Earned β61 million
Therefore the total monthly net income was β150 million. Excluding the β10 million deduction leaves a taxable base of β140 million. Due to a tax rate of 15.0%, Simply Delicious Orchards receives a tax bill of β21 million.
Real Estate Tax
- Each city has its own Real Estate tax. It applies to any building over 100,000 ft2.
- Tax accrues daily on (recently) active buildings and is billed monthly at the same time as the income tax. A building that goes idle for more than 48 hours will stop adding to the tax bill.
- Active includes selling, producing, converting, or expanding. Only completed size counts, so expanding buildings won't be charged on incomplete portions.
- The rate is based on the cost to construct that building at Normal speed, excluding the first 100,000 ft2.
Example: Daily Comfort owns a 150,000 ft2 Blanket Factory in Abalesk, with a 5% Real Estate tax.
The cost to build 150,000 ft2 is β243 million
The cost to build 100,000 ft2 is β162 million.
The monthly tax for this building is 5% * 81,000,000 = β4,050,000. In a month with 30 days, 3.3% of that total, (β 135,000) will be accrued every day.
- Money collected from the Real Estate tax is used to boost the city where it was charged. Each city's rate is calculated at the start of the month based on current economic conditions.