The nightmare of taxes, and what can I do about it

Business and Project Management Discussions
#21

These reports don’t quite agree:

I’m sorry, but I’m taking those reports more serious than the statements of your friend…

[quote]Yesterday I asked a friend of mine about the taxes. He has no idea how does it all works, but he sad in Hungary 60% gone with taxes.
[/quote]

#22

Also when you are living in the EU, you are free to create an company which is listed in any other EU country i.e. in Ireland or Luxembourg which take nearly to zero taxes for business.

#23

I understand this. I don’t want to patronize you, just sharing experiences because it’s very common for people to jump into these things without thinking them through (Yes, personal experience, not about taxes, but still).

#24

Thanks for the info, but I don’t want to leave my home yet.

By the way, for those who think I’m evil because I want to avoid taxes. I don’t want to avoid all of it. But keep it in a normal level. Probably most of you know it’s a great effort to make a game. If I would sell 1000 copies, I’m gonna be so happy, but half year of development and hard work is still gone because of taxes. I would rather give it out free that way.
If I can find any other way than this 60% of tax rate I will do it.
And this 60% of tax comes from:
27% general tax on everything you sell for a person
16% personal income tax
2% industry tax
12% if you want to take your money out of the company.

And thanks riven for the correction of personal income tax. It’s not 18% but 16%.

#25

Well if you are interested really is what tax do i, could i owe. Then consider that personal income tax is not the same as company income tax. Setting up as a company and being naive about how you take the money out for your self can get you a double tax. But really most countries do provide quite a lot of help and advice on the topic. At least NZ, Austria and Switzerland anyway. Typically most things are roughly “taxed” once with the exception of VAT. Steams cuts is not however a tax.

Also while there is no money, there is no tax. But you may want to keep track of any real outgoings, since they are often valid for deductions for a few years (Austria its like 5 years, NZ 7). Even if you don’t do the company thing.

#26

you don’t have to leave your home(Hungary) to create a company which is based in another EU country. You can operate and have your address at your home but be registered in any other EU country. AND this is totally legal see Art. 43 EC see the judgment of the European Court

#27

[quote=“grego,post:24,topic:41870”]
Ok, so you make a game and in 1 year you sell 1000 copies at €20 each and make €20,000.
Take off 27% sales tax leaves €16,300.
Take off 2% industry tax leaves €15,974.
What’s left is your personal income and you pay 16% tax leaving you €13,418.

That’s 33% tax, not 60%!

It’s also unlikely that you’ll have to pay sales tax unless you make more than a certain amount (around €170,000 in the UK) in which case you’d only be paying around 17% tax.

#28

I’m from eastern Europe 20$ for us is a huge amount of money :slight_smile: I don’t want to sell it for that much.

It seems like if I’m selling as a person not as a company it’s just 16% or so. I don’t know if I still have to pay the 27% general tax but it’s much better now.

#29

Of course you can set your price so the profit you earn after taxes is what you want for compensation.

#30

However unfortunately the gaming industry is kinda plagued by the fact that nobody wants to spend money on below AAA games.
This phenomenon that you see a game for 2 bucks instead of 1 in the android store or whatever and dont buy it, and then you tip a pizza guy…

#31

I never said people will buy it at the price you want to be compensated, that is a separate issue. I’d say if the case is that no one buys your game at the price you want then improve your product to be worth the price.

The difference between games and pizza guys is that there are a million games all available to you at once.