The revenue enhancement is the oldest and most of import fiscal beginnings of the states around the universe due to the magnitude of the financess provided by the public exchequer of the state, the value of revenue enhancements has increased its portion in the construction of public grosss, every bit good as the important function they play in accomplishing the aims of the state ‘s political, fiscal, societal, economic and development, so the magnitude of their effects at different degrees of sector productiveness and consumer goods and distribution.
And by the expansive development of the states among the clip, revenue enhancements occupied a great trade of fiscal surveies, economic and societal development, where it became of involvement of economic experts seeking solutions to the fiscal crises and economic, revenue enhancements besides became a tool of financial policy of the province which has a direct impact on the economic system of the state, and because of the importance of qualifying revenue enhancement of assorted financial Fieldss and often it raises issues worthy of survey and analyze became a really of import topic among all states around the universe.
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Therefore this study is traveling to seek and analyse the revenue enhancement system sing construction and issues for “ Curacao ” and “ Lebanon ” to calculate out the differences and similarities between both states as they are unrelated regionally and both have different civilization values and jurisprudence systems, so it ‘s expected to analyse a immense difference in revenue enhancement systems every bit good.
First of all The research is traveling to analyze the different types and facets of revenue enhancements and so analyze each class and what it includes and stands for in both states.
System used by authorities to obtain money from people and organisations. The gross collected is used by the authorities to back up itself and supply public services. Aside from being comparatively lasting, revenue enhancement is mandatory and does non vouch a direct relationship between the sum contributed by a citizen and extent of authorities services provided to him, an implemented levy to run into exigency is distinguished from revenue enhancement as non being portion of a long-run system, fees for particular services, such as postage. are non revenue enhancements. A authorities may procure its gross without revenue enhancement, as from natural resorts, manufactured merchandises, or services.
Main revenue enhancements are described as two classs:
Direct revenue enhancements:
a revenue enhancement that is paid straight by an person or organisation to the imposing entity. A taxpayer pays a direct revenue enhancement to a authorities for different intents ( Grawn & A ; Valodia, 2011 ) including
Personal income revenue enhancements
A personal or single income revenue enhancement is levied on the entire income of the person and it ‘s frequently collected as monthly footing with some rectification at the terminal of the twelvemonth, as for those revenue enhancement remunerators who have non paid plenty during they have to refund the difference and on the other wise for the revenue enhancement refund from the authorities to those who have overpaid ( Adam & A ; Browne, 2011 )
Corporate revenue enhancements
Corporate revenue enhancement refers to a direct revenue enhancement levied on the net incomes made by companies or associations and frequently includes capital additions of a company. Net incomes are by and large considered gross gross subtraction disbursals
Capital additions revenue enhancements
Capital addition is by and large gain on sale of capital assets, those assets non held for sale in the ordinary class of concern. Capital assets include personal assets in many legal powers. ( Adam & A ; Browne, 2011 )
Payroll revenue enhancements
A paysheet revenue enhancements by and large refers to two sort of revenue enhancements: employee and employer paysheet revenue enhancements and it is Levied on rewards and wages including overtime, tips and periphery benefits. And includes besides Contributions for illness and pregnancy benefits and for household allowances
Employee paysheet revenue enhancements are revenue enhancements which employers are required to keep back from employees, these withholdings contribute to the payment of an employee ‘s personal income duty
Employer paysheet revenue enhancements are paid from the employer ‘s ain financess, either as fixed charge per employee or a per centum of each employee ‘s wage, such as societal security, wellness attention, unemployment, and disablement.these payments do non number toward the income revenue enhancements of employees and employers, but are usually deductible by the employer as a concern disbursals. ( Adam & A ; Browne, 2011 )
Property revenue enhancements
A Is a levy on the value of belongings that the proprietor of the belongings is required to pay to a authorities in which the belongings is situated. Multiple legal powers may revenue enhancement the same belongings. There are three general assortments of belongings: a existent estate like lands, edifices, and personal belongingss like autos.
A common type of belongings revenue enhancement is an one-year charge on the ownership ofA existent estate, where the revenue enhancement base is the estimated value of the belongings
Indirect revenue enhancements
Indirect revenue enhancements are collected from person or some organisation other than the individual or entity that would usually be responsible for the revenue enhancements, so it is revenue enhancements that increases the monetary value of a good so that consumers are really paying the revenue enhancement by paying more for the merchandises.
Value added revenue enhancement
is a revenue enhancement, normally paid by the consumer at the point of purchase, itemized individually from the base monetary value, for certain goods and services. The revenue enhancement sum is normally calculated by using aA percentageA rate to the nonexempt monetary value of a sale ( Adam & A ; Browne, 2011 )
What are the differences and similarities between revenue enhancements systems of Curacao compared with the revenue enhancement system of Lebanon?
Well herewith we are traveling to speak briefly about each of these types of revenue enhancements as mentioned antecedently by sing Curacao revenue enhancement system compared with Lebanon revenue enhancement system
Personal income revenue enhancements
Personal income revenue enhancement rates in Curacao are progressive up to 38 % . A supertax of 30 % known as island surcharge besides applies. Therefore, the revenue enhancement rate is 49 % . And it ‘s levied on a annual footing by the local currency as follows:
Taxable income ( ANG ) A A A A A A A A A Amount in USD Tax Rate on surplus
up to 25,514A A A A A A A A A A A A A A A A A A A A up to 14,175 $ A A A A A A 10 %
25,514 to 38,271A A A A A A A A A A A A A 14,175 to 21,260 $ A A A A A A A A A A A A A A A A A A A A A A 16 %
38,271 to 53,154A A A A A A A A A A A A A A 21,262 to 29,530 $ A A A A A A A A A A A A A A A A A A A A A A A A 21 %
53,154 to 79,730A A A A A A A A A A A A A 29,530 to 44,295 $ A A A A A A A A A A A A A A A A A A A A A A A A A A 27 %
79,730 to 112,685A A A A A A A A A A A 44,295 to 62,600 $ A A A A A A A A A A A A A A A A A A A A 32 %
Over 112,685A A A A A A A A A A A A A A A A A A Over 62,600 $ A A A A A A A A A A A A A A A A A A A A 38 %
( Wendell & A ; Paul, 2012 )
Harmonizing to ( Lebanon revenue enhancement usher, 2011 )
The personal income revenue enhancement rate on rewards and wages in Lebanon is progressive up to 20 % , and
It ‘s levied on a annual footing besides by the local currency of Lebanon as follows:
Income ( LBP ) A A A A A A A A A A A A A A A A A A A A A A A A A A A Income in Dollars Tax Rate
1 to 6,000,000 A A A A A A A A A A Up to 4,000 2 %
6,000,001 to 15,000,000A A A A A A A A A A A A A A 4,000 to 10,000 $ 4 %
15,000,001 to 30,000,000A A A A A A A A A A A A 10,001 to 20,000 $ 7 %
30,000,001 to 60,000,000A A A A A A A A A A A A 20,001 to 40,000 $ 11 %
60,000,001 to120,000,000A A A A A A A A A A A 40,001 to 80,000 $ 15 %
More than 120,000,001A A A A A A A A A A A A A A A More than 80,000 $ 20 %
So we realize a immense difference in personal income revenue enhancement rate between Curacao and Lebanon as the income revenue enhancement rates in Curacao are about doubled compared with Lebanon, and there is household and computed lessening in Lebanon that subtract a immense sum of the income. But in Curacao there is a a specific tabular array that shows the progressive sum of incomes with the progressive sum of revenue enhancement.
hereby in the undermentioned tabular array demoing the same income in Lebanon and Curacao yearly conducted to recognize the effectual difference in existent instances:
Personal income revenue enhancement illustration
Annual income of 54,000ANG/30,000 $
Payroll revenue enhancements – ( 4,320ANG ) / ( 2400 $ )
Taxable Income 49,680ANG/27,600 $
income revenue enhancement rate 27 %
one-year revenue enhancement sum 6,374 / 3,542 $
Annual income of 45,030,000 / 30,000 $
Family freedoms – ( 11,000,000 ) / ( 7,300 $ )
Taxable Income 34,030,000 / 22,700 $
Income revenue enhancement rate *11 % 3,743,300/2,490 $
Computed lessening – 1,050,000 /700 $
Annual revenue enhancement sum 2,693,300 / 1,755 $
( Curacao Income revenue enhancement tabular array, 2012 )
( Lebanese Income revenue enhancement jurisprudence, 2012 )
Corporate revenue enhancements
Curacao corporate revenue enhancement rate is a level 27.5 % based on the new revenue enhancement ordinances of 2012 and it ‘s capable to a certain type of companies running concern on Curacao as follows:
The NABV is a limited liability company with really flexible corporate ordinances for easier entree and apprehension by clients from both civil jurisprudence and common jurisprudence legal powers, and that must be incorporated by at least one individual or entity
The Naamloze Vennootschap, abbreviated as N.V. is the traditional Limited Liability Company with its capital divided into portions and may be compared with the Spanish S.A. and the U.S. Corporation.
while there are some types of corporations in Curacao that have some other ordinances sing revenue enhancements based on the bounds and intent of being as follows:
The N.V. holding non-resident stockholder ( s ) , an offshore concern licence and a foreign exchange licence qualifies for the seaward revenue enhancement rates, and the net income revenue enhancement rates are from 2.4 % on the first ANG 100,000 or US $ 56,000 and 3 % on the balance. Capital additions derived by the above types of offshore N.V. ‘s are exempted from revenue enhancements and capital losingss are non deductible.
Companies with registered reference in an Economic Zones in Curacao which meet the conditions of the Ordinance, are capable to gain revenue enhancement at a rate of 2 % on net incomes obtained from export, whereas no import responsibilities, turnover revenue enhancement and belongings revenue enhancement are applicable. The company must be able to bring forth at least 75 % of annual gross revenues outside of Curacao. Economic Zones are intended for export-oriented companies.
Curacao private foundation: foundation making a Private Foundation ( Stichting Particulier Fonds, abbreviated SPF ) particularly for international revenue enhancement planning intents, such as international plus direction & A ; estate planningaˆ?aˆ?The SPF is a legal entity without stockholders or members and stands on its ain, and dwelling of a board of managers and donees as yet to be named. A supervisory board may be installed every bit good as a defender must be incorporated by at least one laminitis is exempted from net income revenue enhancement and gift revenue enhancements in Curacao, the assets or capital brought into an SPF must be at least 60,000 $ ( ANG 100,000 ) . ( Wendell & A ; Paul, 2012 )
Lebanese occupant companies are capable to Lebanese corporate revenue enhancement on net incomes of any concern carried on in Lebanon at a revenue enhancement rate of 15 %
Persons and Partners in a private company are capable to revenue enhancement on net incomes, after tax write-off of household allowances, on a progressive graduated table as follows:
4 % on income below L?9,000,000 ( 9,000,000LBP = 6,000 $ )
7 % on income between L?9,000,000 and L?24,000,000
12 % on income between L?24,000,000 and L?54,000,000
16 % on income between L?54,000,000 L?104,000,000
21 % on income bracket above L?104,000,000 ( 104,000,000LBP = 70,000 $ ) ( Lebanon revenue enhancement usher, 2011 )
So on Curacao corporate revenue enhancement rates are capable to 27.5 % and it ‘s capable to all degrees of concern incomes, but in Lebanon it varies based on more higher rate for higher incomes and it ‘s progressive up to 21 % on the highest concern incomes, so we realize in Curacao rate a difference of approximately 6.5 % rate higher than Lebanon on the highest corporate income.
Hereby is an illustration for two corporations gain the same sum calculated to calculate out the one-year revenue enhancement sum for both Curacao and Lebanon corporations.
Corporate income revenue enhancement illustration
Annual corporate income 90,000ANG/50,000 $
Expenses 20,000ANG 11,111 $
Corporate net income B/T 60,000ANG/ 33,333 $
Corporate revenue enhancement rate 27.5 %
Annual revenue enhancement sum 16,500ANG/ 9,166 $
corporate income 75,050,000/50,000 $
Expenses 16,347,200 /11.111 $
Corporate net income B/T 58,702,800/33,333 $
corporate revenue enhancement 16 %
Annual revenue enhancement sum 9,392,448ANG/6,120 $
Capital additions revenue enhancements
For corporations Capital additions are included in net incomes and taxed at the normal rates of 27.5 % , under the engagement freedom, addition derived from the disposal of measure uping engagement are to the full exempt.
Therefore personal capital additions are besides included in the net incomes and taxed at the normal rates. ( Moniqe, D. 2012 )
Capital additions revenue enhancements in Lebanon are capable to 10 % ( merely on assets located in Lebanon ) where assets located outside of Lebanon is exempt. ( Lebanon revenue enhancement usher, 2011 )
Hereby we realize a immense difference in the capital additions rates in Curacao than Lebanon, where it ‘s about 17.5 % in Curacao higher than capital additions of Lebanon.
Payroll revenue enhancements
Curacao paysheet revenue enhancements is considered as follows:
Old-age pension ( AOV ) 13 % Employer: 7 %
Employee: 6 %
Widow ‘s, Widower ‘s and Orphan ‘s Pension ( AWW ) 1 % Employer: 0.5 %
Employee: 0.5 %
Accident insurance ( OV ) 0.5 – 5 % full by Employer.
Illness insurance ( ZV ) 12.5 % Employer: 8.3 %
Employee: 2.1 %
( Banko Di Seguro Sosial, 2012 )
– Employers: 21. 5 % of which:
a-? 7 % per centum for the illness and pregnancy
a-? 6 % per centum for the household and instruction allowance
a-? 8.5 % per centum for terminal of service insurance
a-? The rate of employers ‘ parts for household allowances is reduced to 7 % for
– Employees: 2 % for the illness and pregnancy
( Lebanon General budget jurisprudence, 2012 )
In payroll systems of Lebanon and Curacao we do n’t gain a large difference in the per centum rates, but we realize a difference between the part portions of the employees in Curacao compared of Lebanon, since the employees part in Lebanon is capable of 2 % for merely the illness and pregnancy, but in Curacao they participate in about all the elements of paysheet system.
Property revenue enhancements
A 4 % transportation revenue enhancement is levied on the purchase or other transportation of existent estate and the purchaser is responsible to pay this revenue enhancement ( Curacao Personal revenue enhancement, 2012 )
Therefore belongings revenue enhancement in Lebanon Covers all belongingss located in Lebanon. Consists of a figure of revenue enhancements:
relative revenue enhancement on net income from each belongings at 4 %
progressive revenue enhancement on rental incomes from all belongingss 2- 13 % . ( Lebanon revenue enhancement usher, 2011 )
Property revenue enhancement rates in Curacao are precisely the same per centum as Lebanon ‘s revenue enhancement.
Value added revenue enhancement
Value added revenue enhancement or gross revenues revenue enhancement in Curacao ( OB ) was 5 % on the gross revenues sum until the terminal of 2011, so value added revenue enhancement increased 1 % after the new revenue enhancement ordinance at the beginning of 2012 to 6 % ( Wendell & A ; Paul, 2012 )
Exemption for Value added revenue enhancement in Curacao
Harmonizing to KPMG, The followerss are value added exempted: Hospitals, Universities, cultural establishments, charities, private foundations, governmental entities and others- are by and large concentrated in the house ‘s wellness attention and non-profit industry groups, besides for the house ‘s largest clients across all industry groups-on issues affecting, for illustration, Corporate foundations and charitable giving.
Therefore harmonizing to the ( review section ) sing manual gross revenues revenue enhancement regarding Products and services exempt from gross revenues revenue enhancement includes:
Inter-insular bringings of commercial goods between concerns in Bonaire and Curacao, bringing of existent estate if transportation revenue enhancement is collectible, individual public conveyance and school coach services, medical services to infirmaries, Fuel bringing of services to aircraft and transport
Delivery and services for undertakings on behalf of the Netherlands, Aruba or international organisations, Supplies and services to oil refineries, Export of goods, Services associating to goods in the port or airdrome country, Rental of hotel suites and flats if remaining guest revenue enhancement is due, Supply of medical specialties on prescription, Delivery of staff of life, and life, wellness reinsurance
Value added revenue enhancement in ( VAT ) was capable to 10 % on gross revenues sum until may 2012, has increased 2 % to be capable to 12 %
Exemption for Value added revenue enhancement in Lebanon
Tax shall non be charged in regard of the minutess carried out within the Lebanese district and related to any of the undermentioned activities: Servicess offered by medical physicians or individuals executing a medical activity, and infirmary fees, Education, Insurance and reinsurance, Banking and fiscal services, Non-profit organisations, , Collective conveyance of individuals, Supply of gold to the Central Bank, Betting and lotteries, Sale of built belongingss, Farmer ‘s activities refering the supply of their agricultural production.
Livestock, domestic fowls, live fish and agricultural alimental merchandises sold in their altogether
State, Bread, flour, meat and fish, milk and yoghurt and their derived functions, rice, borghol, sugar, cooking salt, vegetable oil, macaroni and all different sorts of pasta and babe ‘s nutrient, Books and similar publications, magazines, newspapers, paper and poster board of a sort used for composing and printing, newspapers in axial rotations or sheets, publishing ink ; Postal and financial casts, Gas for family ingestion, Seeds, fertilisers, provenders and agricultural pesticides, Agricultural machinery, Medicines, drugs and pharmaceutical, Medical tools, installings and equipment, Precious and semi-precious rocks, cherished and semi-precious rocks destined for mounting or renewed, pearls, diamonds, gold, Ag and other cherished metals, Negotiable money in paper or coins. ( Value Added Tax Law, 2001 )
Value added revenue enhancement of Lebanon is exactly doubled as it is in Curacao even after the recent new revenue enhancement ordinances of both states. Furthermore we realize a sort of similarity sing the value added revenue enhancement freedoms in both states.
We have investigated the general revenue enhancement system of a state and figured out the construction and different classs of revenue enhancements followed by the facets, measurings and regulations that build a state ‘s revenue enhancement system that considers the different degrees of populations and establishments sing persons and concerns related to the government of a state.
Therefore in order to hold and effectual construct we decided to compare the revenue enhancement systems of two different states unrelated geographics or politically or socially, so the comparing brings a clear image of differences and similarities of each state ‘s revenue enhancement system, hence we chose to compare Curacao and Lebanon as both of them are un-linked states neither geographics, politically, and socially.
Therefore By look intoing in revenue enhancement systems of both states we analysed a immense differences in some revenue enhancement rates and facets, on the other side we realized some revenue enhancements have similar rates in both revenue enhancement systems where both states have same construction of revenue enhancement classs as Direct and Indirect revenue enhancements with the similar contents of each class. Therefore we realized a existent difference in personal income revenue enhancements as it ‘s up to 49 % in Curacao and 20 % in Lebanon which ‘s topic to 29 % higher rates in Curacao, besides in the corporate revenue enhancement we realized in Curacao a difference of 6.5 % higher than Lebanon, where the capital additions revenue enhancements besides is higher than Lebanon with 17.5 % as it ‘s included in the income revenue enhancements of Curacao and capable to the same rates, therefore we do n’t see a existent difference in the per centum but the manner it ‘s gathered makes difference in Lebanon in the employees advantage as it is capable to merely 2 % of the whole construction but in Curacao the employee contributes more than 8 % . Therefore we realized the precisely same rates for the belongings revenue enhancements which ‘s topic to 4 % for both in Lebanon and Curacao, eventually by comparing the indirect added value revenue enhancement of both revenue enhancement system we realized an addition in gross revenues revenue enhancement of Lebanon by 2 % to go a topic to 12 % on the sum value which ‘s doubled of Curacao added value revenue enhancement, which ‘s merely 6 % in Curacao even after the new revenue enhancement ordinances of 2012.
Furthermore it ‘s recommended for Curacao during the approaching old ages to cut down its general revenue enhancement rates in order to be more efficient and effectual for local occupants, hence for the universe broad stockholders whom are willing to put in Curacao and increase their different fiscal activities.