Resource Wars II - Taxes and uncertainty
Ilene Dover
Today we will keep examining the subject of the new economy and resources. These are due to go live at the end of Day 3144, which is today if you are paying attention. This is my second article on the topic. Please read the first article, as it explains the mechanics of production. This article will try to offer some clarity on how to pick a region, tax rates and other things that might burn you.
First things first. Work as manager is how most of us produce our factory goods. You are only permitted to work as manager companies in a Holding Company when your citizen is in the same region.
What this means is that you will be travelling to this region at least once a day, if you like to move around and fight. If you set your companies in more than one Holding Company, to maximise the bonuses from different regions you will have to move at least once each day in order to work as manager.
Eventually, you will probably run out of the free Q5 moving tickets that the weekly challenge gives. It costs more than 50 CC to buy a ticket on the market today and I bet that the price will go up. If you don’t make more than 50 CC extra profit from work as manager by having your Holding Company in a separate region then you are burning money.
If the nation that owns the region where your Holding Company is located passes a trade embargo against your citizenship country, or goes to war with your citizenship country then you will be unable to work as manager. This is a significant change to the game, and sees the return of soft power (as opposed to the hard power of battlefield damage). Don’t establish Holding Companies in your enemy’s lands, or you are burning money.
The goods produced by your companies will still be forwarded to your citizen’s storage, just like they are now. You will not need a market licence for each Holding Company. It is not clear if a Holding Company will have a small storage capacity like Orgs do. I think it is unlikely they will.
This means that goods produced by a Holding Company owned by an American citizen in, say, China will not be subjected to Import Tax if they are sold in the USA. A Chinese market licence is not part of the Holding Company deal, nor is it required to operate the Holding Company in China. If you’re selling goods, Import Tax is unchanged. That means it is relative to the market being sold into and the seller’s citizenship.
It also means that you can separate your raw material companies from your factories. The game will automatically transfer produced raw materials as needed, just like now. Even if the raw material companies are in a different Holding Company to your factories.
Work Tax is a topic near and dear to every citizen of the eUSA. The Work Tax each company in your Holding Company pays is based on who happens to own the region it is located in at the time you click to work as manager. The method of calculation is unchanged - a flat rate per company based on the legislated Work Tax rate and the national average salary (all based on the region owner).
Further, the admins have promised a feature in the future where countries are able to set different tax rates for their core regions and their occupied regions. Exactly how this feature will work is not clear at the moment. If you plan on establishing a Holding Company in one of your nation’s core regions that is being rented to another (say, a Canadian setting up a new industry mine on Prince Edward Island), then be wary. You may be burned by colonial tax rates.
If you have a Holding Company established in a region that is not owned by your nation (e.g. an American citizen setting up in Chinese territory again) then Work Tax will be shared. 80% of the Work Tax will be paid to the owner of the region (China, in our example). 20% of the Work Tax will be paid to your nation’s treasury (USA, in our example).
This is important to consider if you set up in a region prone to conflict like Laane-Eesti. The Work Tax rate will change depending on the current owner. The recipient of the Work Tax revenue will change too. This feature is also the biggest reason to stop small countries reacting to invasion by large countries with a “We’re being invaded by 100% bonuses. Fight for their side you idiots!” strategy. It will also drive conflict, as the major nations strive to control regions with the largest number of companies and claim 80% of the tax revenue.
Employees are the final piece of the puzzle. What country are your job offers posted in? Where does their work tax get paid? Do work tickets still get stockpiled with the company owning citizen? Are we going back to a system where employees are “owned” by a company? Happily, the admins have been quite open about these issues. Specific answers have been provided, thankfully.
Job offers will be posted by the owning citizen. They can be seen and accepted in every country that the owning citizen has a Holding Company. This is a powerful reason to have Holding Companies in more than one region.
Work tickets remain the property of the owning citizen. They can be used in any company belonging to any Holding Company.
Work tax for employees will remain unchanged. That is, you pay it to the treasury of the employer’s nationality and their rate.
Too long again and you skipped reading? Reading comprehension failure? Don’t care enough? Take my recommendations below. Some of this is based on speculation. If you take my advice and it goes pear shaped then I’m sorry. As always, your mileage may vary.
1. Wait a day before establishing your free Holding Company. Obviously this is only if you can afford to without greedy employees bankrupting you, because not placing a Holding Company means you miss a day of production. On Day 3146 we will have pollution stats for Day 3145, and this will help you decide if a big region bonus is beneficial or harmful.
2. If you’re a small producer that only makes stuff for yourself (as opposed to selling for a profit), build one Holding Company in a country with a good national bonus like the eUSA. Put it in a “backwater” region like Ohio, rather than a “major” region (like Nebraska).
3. If you’re lost and confused about the geopolitics of the whole thing, you’re not alone. Put your free Holding Company in your country’s capital regions and park your butt for a few weeks. If nothing else, you’ll be able to defend against MTO’s while still running companies.
4. If you’re a big producer and prepared to gamble, have a read of this article by mohammadh77. It’s a diligent documentation of the best bonus regions globally, with discussion on which ones are closest to each other to minimise your travel costs.
Comments
Good
Always nice. I agree with the opinion that we should wait for a day or two.
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Voted and endorsed. Excellently done.
Lots of good work...orgs are an anachronism and none off this fixes say q1 -q6 gun companies which cannot be sold at any price and there has been only losses...q1 -q4 guns can only sell at BIG losses...what kind of economy is that?
I think that might change. RM production will become difficult or expensive. All the Q7 factories will pollute each other while Q5 factories do not because there aren't as many. MU communes may have to rethink their strategy some.
I think that your faith is unfounded...yes q5 tickets will go up; but unless admin opens sale prices on companies AND makes people want/need to buy q1 - q4 guns they will always cost MUCH more to produce than they will ever sell for...hence admin bankrupted a perfect economy and took our economic/production strength and gave us nothing (10,000 storage) in return for a six star guru...nice guys.
capitalism. no demand for q1-q6 gun. so no profit for q1-q6 guns.
I do hope that admins allow people to build unlimited rockets this would be amazing!
Exactly....so why do all 'starter' gun (and bread) companies exist at all if no new player can save ten gold and build one to employ workers?
Admin destroyed the demand with V1...let them rebuild it.
Holy crap, this stuff is getting complicated. Glad your here to explain it or I would be really lost 🙂
My pleasure. I love complex games. 🙂
Good job \o
Apply for gold endorsement!
How? Why? What???
You can APPLY for gold? I'm so confused...
http://www.erepublik.com/en/article/one-more-reason-to-write-2603071/1/20
Ilene:
Can you clarify for me whether factories benefit from resource bonuses?
I'm trying to decide whether to build 3 or 4 holding companies (1 for each resource type = 3 & potentially 1 for all my production factories in a neutral non high pollution area - if they don't benefit from production bonus).
Thanks
They do. 🙂
A good factory in DC today will make 218 food.
100 (boiler plate number) + 100 (national bonus) + 18 (region bonus of 90/5)
Tomorrow it may make less, because DC will be an industrial wasteland.
So then splitting my factories, potentially into 3 locations is the right choice (factories along with the raw material production).
I'm taking your advice to wait a day or two to get a feel for pollution. I'm wondering how easy it will be to see pollution levels in various states.
Maybe. New HCs cost over 10k CC. That's a lot of profit to earn back...
I think closer to 30k CC for 2 additional (3 total). Which is around a months profit for me, so not great.
plus you will have to add the daily cost of moving so you can work as manager if you have more then one holding.
I would approach it as a "return on investment" calculation. Yes, 10k CC is a lot. You will probably make make profit though, through better bonuses.
Will your 10k CC (or 30k) cost produce more profit than if you had put the same investment amount into new companies? I don't know.
Vote!
Mpoted
\o/
Why does the article recommend that small producers locate their holding company in a "backwater" region? What's the logic behind that?
To avoid pollution. Ohio has a 25% food bonus, so your factory production will be 100 (boiler plate) + 100 (national) + 5 (region) = 205 (5 units more than previous). It's unlikely to be polluted, but that can't be known until a week or so from now.
By contrast, D.C. has a 90% food bonus. A factory production will be 100 + 100 + 18 = 218. 13 units more than Ohio. But everyone may be chasing those extra units and therefore polluting the place. Pollution maxes out at 25% penalty. A heavily polluted D.C. would therefore produce 100 + 100 + 18 - 25 = 193. 7 units less than before, and 12 units less than Ohio.
Going for the big bonus regions is a gamble. It might pay off. It might not. We can't know until pollution data is available. That will happen at day change, and be imperfect because of people waiting. Therefore my recommendation to wait, but if you can't wait go to a "backwater" region.
one correction, you note that Q5 tickets are $50+ (well currently over $60 now), but once you use up your tickets you will still be able to move for cash with (20, 40, 60, 80, and 100) depending on how close you are. So depending on how close your holding are to each other, it may cost less to pay the standard moving cost than to buy Q5 tickets (esp with them costing much more).
That is a very good point. Setting an offer with 1000 cc for one ticket and you will be out of tickets temporary.
That's good advice, thanks. 🙂
"If you have a Holding Company established in a region that is not owned by your nation (e.g. an American citizen setting up in Chinese territory again) then Work Tax will be shared. 80% of the Work Tax will be paid to the owner of the region (China, in our example). 20% of the Work Tax will be paid to your nation’s treasury (USA, in our example)."
I think if i understand this correctly. if someone takes a job with me currently in say Argentina, then Argentina gets 80% of the taxes paid.
it used to be the worker from argentina moved to a usa territory and got a job from me and usa gets 100% of the work tax.
so all the smaller countries could improve their tax basis if they encourage foregin people to build a holding company to pay their workers to work in a foregin country while getting 80% of the taxes!
if any country wants me to build a holding company in their country just send me 80,000 currency. it should double taxes paid if i can bring your wage from 60 to 124.
Work tax paid by your employees is a function of the owner's citizenship. In your case, your employees pay eUSA work tax.
This is because you (as a citizen) own the work tickets and can spend them wherever you please, internationally speaking. On the job offer page you can see the owner's nationality by the currency they are posted at
but what about my chilean holding company in chile named chile?
Your WaM on this companies pays Chile work tax. 80% goes to Chile and 20% to USA.
Employees working on those companies pay 100% USA tax.
Thank you i understand better now!
My pleasure. 🙂