Overview of Taxes in Próspera
These are the only taxes levied on individuals or businesses operating in Próspera. That means the Próspera ZEDE does not charge any of the following taxes:
- Capital gains tax
- Medicare taxes
- Wealth tax
- Excise taxes
- Import duties
- Estate taxes
- Gift taxes
- Payroll taxes
- Gasoline taxes (VAT applies)
- Social security taxes
- Alcohol taxes (VAT applies)
- Export duties
This tax structure make Próspera one of the most tax-friendly environments in the world for doing business.
Is taxation territorial?
Próspera is a territorial tax jurisdiction. For income to be taxed in Próspera, it must be presumed that the income was earned in Próspera. This typically means the service generating the income is performed inside the jurisdiction. Usually, just incorporating your company is not enough to say the income is now being earned in Próspera, but it depends on the business. To be safe, the service that generates the revenue for your business should be performed inside of Próspera to take advantage of the tax laws. There are a number of ways to make this happen, including you working within Próspera (if you are performing the service) or hiring a team in Próspera and attributing some or all of your income to the employees locally.
What annual business filing/reports are required?
Sales tax is completed quarterly and income tax is due annually. This can be filed on a one-page tax form. In the future, this will be integrated into the ePróspera platform. The annual report fee is $100.
Is a sales tax return required if all business is outside of the Próspera jurisdiction?
Currently, we interpret our tax law as requiring all eResidents (human or legal entity) involved in the sale of goods or services to file both a quarterly sales tax return and an income tax return, even if to report only $0.
How do I know that taxes won't go up?
The Próspera Charter expressly delineates a competitive tax policy for Próspera. The Charter expressly states that only the following taxes in the following amounts are allowed in Próspera, and that no taxes beyond these may be created unless the Charter itself is amended:
The Charter also stipulates that by the “latter of January 1, 2030 or the date the population of natural person physical Residents of Próspera exceeds fifty thousand (50,000)”, tax revenues may not exceed 7.5% of the total GDP of the jurisdiction.
Further, once the jurisdiction reaches such date or population level, debt cannot exceed the greater of 20% of the 5-year trailing average of the total GDP of Próspera or 105% of the nominal debt outstanding immediately before the threshold(s) is reached.
This is a key improvement upon the American system, as unlimited debt can potentially lead to untenable fiscal situations which threaten the economic health, stability, and shared prosperity of the jurisdiction.