What is an intangible tax?
Some assets are intangible, which means they lack physical properties; However, some governments must still be taxed. Examples of assets requiring this type of tax include copyright, patents and trade secrets to name only a few. Intangible tax is a turnover tax by nature because it is usually stored when a legal or competitive asset is sold. The tax rate is often determined by adding the percentage of the value of the item, usually between one and ten percent, to its retail costs, but this rule may vary between governments.
Legal asset
Intangible tax is most often imposed on legal property, also known as "intellectual property". This usually includes copyright, lists of customers, patents, business secrets and trademarks. These are classified as intangible because their actual value is unknown at the time of purchase or sales and are usually non -physical items. For example, a patent can lead to a long life life or by it could be a replao week later; Similarly, it is difficult to know how much income will be generated from advertising for a list of customers. The owner of these items must usually pay intangible taxes because the actual value of the property is unknown.
Competitive assets
Some activities that take place in business, such as knowledge, cooperation and lever activities, are considered competitive assets. Although no one or society can completely own this type of asset because it usually includes more people, it is still considered to be a taxable item because it plays a crucial role in the total value of society. Many organizations do not pay intangible taxes on legal or competitive assets, because they are not sure how to calculate their value, but this may eventually have more consequences depending on the laws of the government.
Problems
Intangible tax systems are notorious to recover. StAs with real estate taxes, they are based on the evaluated asset value. The value may be of opinion and may vary between the evaluator and the evaluated. Moreover, the value of intangible assets, such as stocks, is also prone to fluctuations. Because of their hard -to -quantifiable nature, some individuals underestimate their assets or give up this process. Many local administration offices lack the ability to verify intangible tax values.
Some believe that the US government is losing tax revenues when intangible assets, such as intellectual property rights, sell overseas subsidiaries. This happens when the American company sells its rights to a part of the company based in a country where it will not be taxed. The US Act states that property is subject to intangible tax; However, companies often sell rights under market value to save money by avoiding taxes.