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Computation of Tax

Patente Tax. — The turnover figure calculated as above serves to divide taxpayers into a number of classes with a special rate of tax for each. For banks and insurance companies, however, patente tax is fixed on the basis not of turnover, but of registered capital.

Profits Tax. — This is a graduated tax, rising from 5 per cent for incomes not exceeding 2,000 lats to 15 per cent for incomes above 15,000 lats. The tax is also progressive in the case of companies, but its tariff is graduated on the basis of the yield on the capital of the enterprise and goes from 7.5% up to 17.25%.

From the profits tax is deducted the amount of patente tax already paid, but, if the amount of profits tax is less than the licence tax, no refund is made. Companies which have to submit a balance-sheet and whose profits are below 3 per cent of their capital pay no profits tax.

Half of both these taxes goes to the commune where the enterprise is situated.

Tax on Company Capital. — This tax is levied at the rate of ¼ per cent when no profits tax is payable; otherwise at ½ per cent.

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