What counts to tax deduction?

[WilliamMGary]

Yeah you can generate paper losses all day and grow your bank capital on hand. The tax should be based on operating profits.

I did not generate losses on purpose though, and I am genuinely making net profit from my operation, not growing capital with issuing share or borrowing cash from the bank. Even if I balance the price, and make each firm showing their own profit, the tax deduction still keeps growing. I think any firm with losses are added in accumulated losses regardless of the portion to the total revenue and operating profit.

Under other profit that's where the losses are being generated. Basically if your "other profit" did not exist or were profitable then your company would have paid profit tax. Since your company is actual running an operating profit your company should be taxed on that operating profit without taking into account "Other profits" unless the devs want to introduce a capital gains like tax.

[eleaza]

Under other profit that's where the losses are being generated. Basically if your "other profit" did not exist or were profitable then your company would have paid profit tax. Since your company is actual running an operating profit your company should be taxed on that operating profit without taking into account "Other profits" unless the devs want to introduce a capital gains like tax.

I've done some test games, and this is not true that it's related to other profit losses. Even if all the numbers are in the black, accumulated losses still grows. In this save, of all the 40 firms I owned, only 2 of them have negative operating profit, one is my R&D center which always has negative profit, and the other one is a farm with not so demanded farm products.

Tax Deduction Test.zip

(1.59 MiB) Downloaded 56 times

From April to May, the "accumulated losses for future tax deduction" increased from 45,565,211 to 45,704,596 of total 139,385 (this increased value is very close to the sum of losses 143,363 of my two negative operating profit firms, considering inverse inflation rate 3.84% is about the right amount). And it's not an error of confusing positive as negative, I made an operating profit of 4,013,250 and net profit 18,756,639 that month, the profit tax rate is 25%, it should generate at least one million of tax or higher either way (before other profit or not). And it's also not an error when tax is not showing, since I did gain cash the exact amount about 4 millions from April to May, like it shows in income statement and comparing the before and after cash from the status bar. The calculation is more broken down at the firm level I think, and need to have no losses in any firm at all to get taxed

Tax deduction all black April 45565211.jpg (645.48 KiB) Viewed 969 times

Tax deduction all black May 45704596.jpg (682.46 KiB) Viewed 969 times

[WilliamMGary]

This must be a bug

[Spac3y]

Is it only adding in the losses though.

I agree also I can see a company tax, but that doesnt mean its any of the AI or me paying the tax, as it certainly doesnt appear that human company is paying any. Afterall, what you would expect to see is once your company becomes profitable, the tax loss will run down from where its at until it eventually zeroises then you see actual tax on your income statement.

[eleaza]

In real world, tax deduction doesn't roll on forever, there are limitations of the time it can be used (like 7 years or short), and it's a very complex matter concerning international businesses, where each branch needs to deal with local tax laws and regulations separately in different countries.

[David]

The bug was caught and fixed. The next patch v4.2.05 will have the fix.

For testing, we ran your save game for a while and your company eventually had to pay a profit tax - see attached screenshot.

[WilliamMGary]

So how is taxes based on operating profit?

[eleaza]

The bug was caught and fixed. The next patch v4.2.05 will have the fix.

For testing, we ran your save game for a while and your company eventually had to pay a profit tax - see attached screenshot.

So carefully balancing all firms to have positive operating profit does the trick at current version after all. I wonder what would the correct profit tax be like in 4.2.05.

[Spac3y]

Hi David,

Interms of that screenshot it still shows an accumulated tax loss so not sure why your paying tax ? Surely the accumulated tax loss would reverse to zero (that way you can also see how much you have left in your tax loss) then it should start applying tax from there ?

Presumably this will also be based on net profit as you would have to take the loan interest charge into consideration and the dividend ?

The only problem I do see is that if you would have to exclude stock gains / losses until you sold, otherwise if you run up a huge stock gain in the beginining years (you wouldnt necessarily have the funds to pay the tax on it) ?

Also, I have just downloaded the new patch, still not paying any tax.

Making Money, not paying tax. Yupee

tax loss.png (1.68 MiB) Viewed 938 times

[WilliamMGary]

The profit tax should be determined by operating profit.... Please tell me that's the case.