Celestial Master： I Have an Otherworld-Chapter 54 - 10: Taxation

’Why say so much?’

Seeing Fang Zheng curiously looking over, Wan Dandan just wanted to slap herself. It wasn’t her money, so who cared how much he paid.

This one sentence might bring her a lot of trouble.

Still too young!

"Speaking of paying taxes, I really don’t quite get it," Fang Zheng rested his chin in his hand, saying:

"Is it based on turnover or on final profit? I heard the tax rate isn’t low, do you know anything about this?"

"Uh..." Wan Dandan opened her mouth and explained:

"You have to pay both."

"Huh?" Fang Zheng looked surprised:

"Why?"

"That’s just how it’s stipulated," Wan Dandan shrugged:

"But boss, you don’t have to worry. With an annual income below five million and a net profit around one million in Qu City, you won’t pay much."

She further explained:

"In business, you generally pay two types of taxes. One is value-added tax, which you can understand as the difference between the purchase price and the selling price. Because the goods appreciate in value, tax is paid."

"A value increase of one million would be about a hundred thousand in taxes, right?"

"That’s the idea, but if you have special invoices or other policies, you can actually be exempt. My last company never paid it."

"Hmm." Fang Zheng pursed his lips:

"What about the other kind?"

"The other is called corporate income tax," Wan Dandan said:

"The base for this is income minus all expenses, including personnel wages, venue rent, etc., which is what you said, net profit. Small enterprises like ours pay 2.5% tax on annual net profit under one million."

"From one to three million, it’s 5%."

"Here it’s a progressive tax; if profit is two million, the first million is taxed at 2.5% and the remaining million at 5%, not the whole two million at 5%."

"Oh!" Fang Zheng realized:

"What if the profit is over three million?"

His business definitely had an annual profit exceeding three million.

"If it’s three million, then you no longer enjoy the small enterprise preferential policy and it’s a flat 25% tax rate," Wan Dandan replied:

"310 million also pays a full 25%, with no previous 2.5%, 5% concessions."

"Isn’t that quite a loss?" Fang Zheng shook his head:

"A profit of 310 million in hand isn’t much more than having 200 million."

"That’s true," Wan Dandan nodded:

"So if company profits exceed three million, they usually try to minimize it through accounting, saving tens of thousands in taxes."

"It’s really quite complex," Fang Zheng sighed, asking:

"Then the remaining money should be mine, right?"

"Well..." Wan Dandan laughed dryly:

"No."

"The money in the company’s account isn’t personal wealth. If you want it to really end up in your pocket, you’d need to pay an additional 20% personal dividend income tax."

"What?" the corner of Fang Zheng’s mouth twitched:

"Still more tax?"

"Yes," Wan Dandan nodded:

"But if you’re self-employed, and profit goes directly into your personal account with no business account, you don’t have to pay this part of the tax."

"Of course, self-employment has its own restrictions."

"Heh..." Fang Zheng chuckled.

That means his small company has to pay three types of taxes to truly pocket the money.

Value-added tax, corporate income tax, personal income tax, after all this effort, a ten million investment might end up yielding less than half.

Thinking of this, he asked again:

"If I give myself a salary, do I still have to pay tax?"

"Yes."

"What’s the tax rate?"

"Monthly salary under five thousand is tax-free, and for amounts over five thousand up to ten thousand, it’s 3% on the excess, and over 90,000, 45% on the excess."

"How much? 45%?"

"Yes,"

Wan Dandan nodded:

"So it’s rare for someone to make a million a year just on salary. Even if they have the ability, usually they convert salary to dividends to pay less tax, preferred by both individuals and the company."

"It’s indeed quite high," Fang Zheng understood:

"No wonder so many evade taxes, even superstars who earn easily do it. Giving up over 40% of income would break anyone’s heart."

Wan Dandan pursed her lips.

Paying taxes is a rich man’s thing, ordinary people don’t lament much.

Like her second sister.

Monthly salary over seven thousand.

After deducting the five thousand base as tax-free, and deducting over a thousand for social security and nearly a thousand for housing subsidy.

The remaining money pays 3%, leaving just sixty cents a month!

The previous company’s Sister Wu was more extreme.

Deducting two thousand for pension, a thousand for children’s education, a thousand for buying a house, they didn’t get taxed on over ten thousand salary.

The more you earn, the more you pay, that’s just the way it should be.

Small companies have tax benefits too, with annual profits of a million paying tens of thousands, it’s honestly not too high.

The really high are those with tens of millions, billions, or even tens of billions in revenue.

"Let’s leave it at that."

Fang Zheng lightly tapped the table:

"Keep doing things as before."

"Hmm?" Wan Dandan looked surprised:

"Boss, are you sure?"

"Of course." Fang Zheng stretched his muscles:

"I’m going to be a big tycoon someday; this amount isn’t worth worrying about. Besides, paying taxes is a citizen’s duty."

"Impressive!" Wan Dandan gave a thumbs up, adding:

"Boss, you’re a second-generation rich, right?"

Who else would be so carefree?

Fang Zheng shook his head.

He wasn’t joking. With another world waiting to be mined, becoming the world’s richest man was not a dream. Would he get in trouble over something so trivial?

*

*

*

Dingseng Mountain.

A kiln site.

"Master."

Wu Hai led a group of people over, saying:

"They are all pit kiln artisans, selling along with the kiln site for six hundred taels of silver. Why haven’t you greeted your master?"

The last sentence was directed at the crowd.

Everyone was all dusty and ragged, the leader about fifty. Hearing this, they trembled and knelt, saying:

"We greet the master!"

"Greet the master!"

The others followed suit, kneeling and shouting like beggars paying respects to a gang leader.

"Rise."

Fang Zheng found it amusing, waving his hand asking:

"Are you descendants of convicted officials?"

These people’s foreheads were tattooed, bought as goods, and bowing directly. They certainly weren’t free artisans.

"Yes." The old man nodded:

"Our ancestors committed crimes, sentenced to three generations of artisan status, but our next generation is free, able to farm, just not take exams."

"Hmm."

Fang Zheng nodded:

"Rest assured, everything will stay as it is. If your descendants work at the kiln, they’ll be paid market rates. With a skillset, they’ll never go hungry."

"Thank you, master!"

The old man was overjoyed, hurriedly bowing again.

He mentioned his descendants for this reason, grateful the new master wasn’t like the old one, who squeezed even the younger generation.

They were convicts, unprotected by law, and dared not resist.

"You few..." Fang Zheng’s gaze shifted to a few others in the crowd:

"Not convicts?"

"To the master." One of them replied:

"We are local villagers, working here during farm downtime to supplement income."

"Oh!" Fang Zheng said:

"Farming not enough to live on?"

"Barely," the man raised his head, his weathered face full of bitterness:

"Land taxes, miscellaneous taxes, corvée, none can be missed each year. If the weather’s good, you can just be hungry for a few days."

"But if yields drop, people are forced to their deaths that year!"

Fang Zheng became intrigued. In modern society, taxes were to be paid, but in the Otherworld, he wondered how it compared. He didn’t expect his face to slightly change when he asked.

Such harsh taxes!

Land tax means taxes on farming.

Miscellaneous taxes typically refer to poll taxes, with infants under three in the Wei Dynasty exempt, those under seven paying half, and those above fifty-nine exempt.

Corvée is collected per adult male, who must work for the Imperial Court annually in border defense, river digs, or other tasks.

One could pay money to avoid corvée.

That was already good; the Wei Dynasty implemented consolidated taxes, similar to the whip law, simplifying the process and significantly reducing embezzlement by local officials.

In the previous dynasty,

the tax chaos caused widespread unrest.

But looking at the current dynasty, it seemed to worsen, with new taxes added each year.

"Harsh governance is more fearsome than tigers!"

Fang Zheng gently shook his head:

"The ancient people’s words were true and unerring."

Modern society has taxes, but ordinary people scarcely notice, mostly complaining about limited pathways up. Here, however, deaths are an annual occurrence.