Taxation in Darmen
Taxation in Darmen is imposed at the national, regional and municipal levels. Taxation at the national and regional levels is generally progressive, while taxes at the municipal level are generally flat. The National Tax Collection Agency is responsible for collecting taxes and depositing them into the nation's treasury.
National taxes
All Darmeni citizens and businesses operating in Darmen pay national taxes, except those who reside in Esportivan Darmen and come under a separate regional taxation regime. With a few exceptions (noted below), the current tax rates were set by the Revenue Act of 2045 and took effect on January 1, 2046.
Income tax
| Bracket | Income | Tax Rate |
|---|---|---|
| 1 | $0 – $15,999 | 0.00% |
| 2 | $16,000 – $39,999 | 17.50% |
| 3 | $40,000 – $99,999 | 37.00% |
| 4 | $100,000 – $199,999 | 44.00% |
| 5 | $200,000 – $999,999 | 45.00% |
| 6 | $1,000,000 – $2,499,999 | 45.15% |
| 7 | $2,500,000+ | 45.30% |
Corporate tax
Darmeni corporations are classified into one of three classes based on the number of years they have been in operation. Class A is for businesses in their first two years of operation; Class B for businesses in their third through fifth year of operation; and Class C for businesses who have been in operation for six years or more.
| Class/Bracket | Income | Tax Rate | Class/Bracket | Income | Tax Rate | Class/Bracket | Income | Tax Rate |
|---|---|---|---|---|---|---|---|---|
| A1 | $0 – $499,999 | 0.00% | B1 | $0 – $249,999 | 0.00% | C1 | $0 – $199,999 | 0.00% |
| A2 | $500,000 – $1,499,999 | 24.50% | B2 | $250,000 – $749,999 | 26.00% | C2 | $200,000 – $599,999 | 27.25% |
| A3 | $1,500,000+ | 28.00% | B3 | $750,000+ | 29.00% | C3 | $600,000+ | 30.00% |
Capital gains tax
The current rates for Capital gains tax in Darmen are set by the Revenue Act of 2040 and took effect on February 6, 2040. Any income earned from the sale of a home that qualifies as a primary residence is exempted from taxation, up to a limit of $250,000.
| Bracket | Income | Tax Rate |
|---|---|---|
| 1 | $0 – $9 | 0.00% |
| 2 | $10 – $4,999 | 14.50% |
| 3 | $5,000-$7,999 | 27.50% |
| 4 | $8,000 – $14,999 | 32.50% |
| 5 | $15,000 – $24,999 | 35.00% |
| 6 | $25,000 – $39,999 | 37.50% |
| 7 | $40,000 – $59,999 | 38.75% |
| 8 | $60,000 – $199,999 | 40.00% |
| 9 | $200,000+ | 42.50% |
Import tax
Tariffs are imposed on all imports into Darmen. Products imported from the nation of Eshan to the Port of Rogerton receive a 50.00% discount on tariff charges for the period of 2043-2073 as part of the Echani Path to Prosperity program.
| Import Classification | Tax Rate |
|---|---|
| Essential goods | 3.00% |
| Non-essential goods | 3.50% |
| Alcohol, tobacco, firearms & ammunition | 5.50% |
Value-added tax
Darmeni tax legislation has provided for a fairly broad definition of essential goods and services as it pertains to value-added tax (VAT). In many instances, goods and services which would be subject to VAT in other countries are not in Darmen. Residential housing is exempted from VAT up to a value of $2,000,000. Restricted products refers to those goods which require a license to purchase, such as firearms and ammunition.
| Goods and Services Classification | Tax Rate |
|---|---|
| Essential Goods and Services | 0.00% |
| Non-essential Goods and Services | 7.10% |
| Luxury Goods and Services | 12.50% |
| Residential housing | 12.50% |
| Restricted Products | 16.00% |
| Tobacco | 17.50% |
Tobacco tax
An excise tax is charged on all tobacco products sold in Darmen. The tobacco tax is in addition to the value-added-tax.
| Product Type | Tax Rate |
|---|---|
| Cigarettes | $0.22 per cigarette |
| Cigars | $0.25 per cigar |
| All other tobacco products | 50.00% |
Street food vendor tax
Street food vendors are not charged corporate tax, rather they are charged a separate Street Food Vendor Tax (SFVT). The flat rate of 3.00% on all income, was set by the Economic Activities Act of 2038 and took effect on January 11, 2038.