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Online Airline Management Simulation
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Author Topic: Tax Return  (Read 1204 times)

Offline FlorianV

  • Members
  • Posts: 435
Tax Return
« on: May 29, 2009, 02:52:27 AM »
Hi everyone,

Can anyone shed light on this? On "Tax Return" day I had to pay $37 million extra instead of receiving something back. Does anyone know how that happens and how to prevent that in the future?

Thanks,
Florian :)
MT7: Vasco Express

Offline ekaneti

  • Members
  • Posts: 844
Re: Tax Return
« Reply #1 on: May 29, 2009, 03:23:16 AM »
yeah dont make any money

Kontio

  • Former member
Re: Tax Return
« Reply #2 on: May 29, 2009, 05:41:48 AM »
yeah dont make any money

And the way to accomplish this is buying aircraft. Obviously that is not how it works in real life, but the taxing system in the game is really twisted and unfair.

NicholasB

  • Former member
Re: Tax Return
« Reply #3 on: May 29, 2009, 06:03:43 AM »
Also, Monitor your profit/loss throughout the year, if your doing pretty well during the year and making decent profits try to make your big purchases in Decemeber. Nevertheless, dont purchase or lease planes just for the sake of leasing them and reducing your tax bill. Only lease/purchase only if you really need to, and have use for the aircraft as a replacement or for future growth. However, keep in mind that if you have to pay tax, it means your making pretty good money, but there are ways to reduce your tax bill, but with limited scope withing this game.

Sure it is ok to make purchases/leases during the year, but if your planning a "Big Daddy Order" try to put it off untill the last month of the financial year. In case of selling planes try to sell them just after the tax period.

As Kontio said th tax system is pretty "twisted", but see what you can do with what you have.

Cheers,

NicholasB

olympic17111992

  • Former member
Re: Tax Return
« Reply #4 on: May 29, 2009, 06:24:43 AM »
I think that the income tax is paid once a month.
But i got crazy when i saw that that i paid on week 2  about 35 000 000 $ and on week 3  80 000 000$!!
How on earth did this happen? Why did this happen ?
115 000 000 $ for taxes? I am not that rich !!!
I thought that the taxes are the 30% of the income and i do not have such a great income !!!

NicholasB

  • Former member
Re: Tax Return
« Reply #5 on: May 29, 2009, 07:14:43 AM »
When yo got that big tax bill, did you sell any aircraft that you owned? You may have had to pay some capital gains tax or something like that. I am not sure if that feature is modeled or not though.

NicholasB

olympic17111992

  • Former member
Re: Tax Return
« Reply #6 on: May 29, 2009, 09:31:04 AM »
No i did not sell anything!!!
I did not do anything strange.
That's why i am so confused!!!

Kontio

  • Former member
Re: Tax Return
« Reply #7 on: May 29, 2009, 10:26:34 AM »
Took a quick look at your statistics and you seem to be operating quite a large airline which is making a very healthy profit. From that profit you have to pay taxes. That's how it goes in this game.

Offline Sami

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    • AirwaySim - Are you the next Richard Branson?
Re: Tax Return
« Reply #8 on: May 29, 2009, 12:56:46 PM »
How should it go then? :P

You make profit => you pay taxes of the profit made. And you pay the money in advance every month and the balance is checked after each year, and depending on the final result you may more or get a refund...

Okay, the investments made do not count fully into the same year's result in the real world. But that's not doable here yet.

Kontio

  • Former member
Re: Tax Return
« Reply #9 on: May 29, 2009, 01:08:47 PM »
Okay, the investments made do not count fully into the same year's result in the real world. But that's not doable here yet.

That's the point. Now you only have to pay taxes if you happen to have cash reserves at the end of the year. Had you spent that cash on airplanes you would get tax returns. Economics is really not my strong point but that just doesn't sound right.

Offline FlorianV

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  • Posts: 435
Re: Tax Return
« Reply #10 on: May 29, 2009, 01:50:43 PM »
Ok, I bought out 12 AVRO RJ's from my lessors last night. So I just should had done that before the end of the year to get money back? That should be changed, really ;)
MT7: Vasco Express

Offline Sigma

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  • Posts: 1920
Re: Tax Return
« Reply #11 on: May 29, 2009, 09:59:02 PM »
That's quite normal.  At least in the US and most other industrialized nations.

If you spend a lot of your gross profit you end up with a lot less taxes.  That's why companies are always juggling their purchases to mitigate their tax payments.  In real life there's countless different ways, even within the same country depending on which accounting rules a company wishes to follow, to pay or not pay taxes on purchases, what percentage of capital purchases are taxable in which year, and/or how depreciation of an asset is handled.

In the simplest most abstract form that we can simulate a wide variety of tax laws in the easiest way possible, the way it's handled now is just fine.  Out of all the various ways the huge number of 'features' the game has are handled, I think the way it does taxes is probably the thing that needs the least amount of work, IMHO (that's not to say the game needs a lot of work, just taxes I'd spend the least amount of time on).

The only way to improve it significantly would be to model depreciation and good luck with that.  There's about 10 thousand different ways to do it, none of which are particularly easy, and companies often change their accounting methodology throughout their life as their needs change (i.e. a regional airline that leased wouldn't handle their taxes the same as a legacy airline that owned)

Don't look at is as you made a "mistake" by buying your AVROs now instead of at the end of last year.  Because all you did was change the year you're getting the tax credit.  You're still going to get just as much money back.  It's just instead of a lower tax bill for the month of December, you're going to have a lower tax bill for the month of January.  If you had bought them in December, you'd just have paid more taxes in January.  The end result is exactly the same.
« Last Edit: May 29, 2009, 10:06:16 PM by Sigma »

 

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