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Poll: What percentage of your translation income goes in taxes?
Thread poster: ProZ.com Staff
ProZ.com Staff
Local time: 23:19
SITE STAFF
Dec 20, 2005

This forum topic is for the discussion of the poll question "What percentage of your translation income goes in taxes?".

This poll was originally submitted by Cecilia Civetta

View the poll here

A forum topic will appear each time a new poll is run. For more information, see: http://proz.com/topic/33629


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Hynek Palatin  Identity Verified
Czech Republic
Local time: 08:19
English to Czech
+ ...
Less than 10% Dec 20, 2005

Currently, most of the responses are for < 10%. In what paradise do you live?

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Valentina_D  Identity Verified
Local time: 08:19
English to Italian
+ ...
same question Dec 20, 2005

I'd also like to know where people voting 10% or less live...

Here in Italy the situation is quite different, unfortunately.
(my percentage is 31-40%)

[Edited at 2005-12-20 14:41]


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Lawyer-Linguist  Identity Verified
Portugal
Local time: 07:19
Dutch to English
+ ...
Do I smell a rat? Dec 20, 2005

Perhaps colleagues stating < 10% are simply not declaring everything and the percentage amounts to less than 10% of their actual gross turnover ..... in which case I doubt there will be much response somehow.

Otherwise, yes PLEASE give us the name of this tax haven so we too can benefit

D

[Edited at 2005-12-20 14:50]


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Charlie Bavington  Identity Verified
Local time: 07:19
French to English
An explanation of the 10% crew? Dec 20, 2005

Previous polls have shown that many people here do not use translation as the main income source for the household, which means many must be part-time translators only.

As such, these people may not have incomes much in excess of the tax-free allowances which apply in many countries, and if they are taxed at all, it will be at the lowest rate that applies. A low tax-rate applied to only a small proportion of one's income = low tax rate on total income.


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Sara Freitas
France
Local time: 08:19
French to English
Depends what people are considering as tax Dec 20, 2005

In France, contributions to Social Security, retirement, et al are not often considered as "taxes". I think we are at 35 to 40 percent for those. Add to that business taxes, property taxes, and income tax and you get pretty close to 50 percent if not more.

If there is a 10 percent paradise out there somewhere, I would love to know where it is .

Even in the US the self employment SS tax is 15 percent!



Sara


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Parrot  Identity Verified
Spain
Local time: 08:19
Member (2002)
Spanish to English
+ ...
Surprise Dec 20, 2005

Sara Freitas-Maltaverne wrote:

contributions to Social Security, retirement, et al are not often considered as "taxes". I think we are at 35 to 40 percent for those.


But they're not taxes. On the contrary, they're deductions! Because (another surprise) when we retire and those things become our "income" - depending on the minimum wages and the laws governing sources of income where you live - the first person you're likely to see rubbing his hands at the news is the taxman...

So you might say that Social Security, retirement, et al represent a temporary surcease from the slings and arrows of an otherwise doubly outrageous treasury...



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tania nogueira  Identity Verified
Israel
Local time: 09:19
Member (2006)
Portuguese to English
+ ...
client pays Dec 20, 2005

if I find myself in the situation that I´ll be paying to receive my payment, I´d be rather poor now. What I do is asking the client to pay for the taxes or any sorts of fee apart from my payment. Otherwise, it wouldn´t be an advantage to get jobs from abroad and receiving it into your bank account.
As far as I know, here in Brazil to receive a deposit from overseas you have to pay R$90,00 for the bank, which should be smtg around U$40,00.


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Ma. Fernanda Blesa  Identity Verified
Argentina
Local time: 03:19
Member (2005)
English to Spanish
+ ...
here, here Dec 20, 2005

Deborah do Carmo wrote:

Perhaps colleagues stating < 10% are simply not declaring everything and the percentage amounts to less than 10% of their actual gross turnover ..... in which case I doubt there will be much response somehow.

Otherwise, yes PLEASE give us the name of this tax haven so we too can benefit

D

[Edited at 2005-12-20 14:50]


I'm one of those who voted "less than 10%", but I considered taxes only...

I mean, naturally I also pay health insurance and retirement, and what not actually :/ but *taxes*, at least in my province in Argentina we as freelancers (not translation companies) have to pay two taxes, one which is 3.5 % of our monthly income and a second tax that is a fixed monthly amount (payed together with retirement, almost half the basic retirement plan and almost 4 times the highest retirement plan as a freelancer), but which is not a lot of money (depends on what your yearly income is, naturally, but it's less than 10%).

Now, if you go over a certain upper limit, then you must start paying VAT, which is 21% + 10.5%.


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Melanie Nassar  Identity Verified
United States
Local time: 09:19
German to English
+ ...
Paradise Lost Dec 20, 2005

Hynek Palatin wrote:

Currently, most of the responses are for < 10%. In what paradise do you live?


I answered


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Victor Potapov
Russian Federation
Local time: 09:19
English to Russian
+ ...
A few words of explanation - and by the way,it's not "a 10% crowd"- in my case it's more like 6% :-) Dec 20, 2005

There are always ENTIRELY LEGAL ways around a rigid system like any national tax system - completely and fully legal ways, let me repeat, no doubt about this...

But a lot depends on your tax jurisdiction - it is just so much harder for some of our European colleagues...

So here's the story. I live in Russia and am a "resident of Russia for purposes of taxation".

I am registered as an "individual entrepreneur" - similar to a sole proprietor in the US. I file one quarterly report - basically, four numbers on one page (dealing with my gross receipts from "sales of goods and services" - explanation below).

I pay 6% tax (get this!) on the amount of my gross receipts. It is a flat rate so there's no ceiling above which I will be taxed at a higher rate. Alternatively, I could have selected a 15% tax rate - on my PROFITS. but to do that is a lot of hassle, you have to prove expenses incurred etc.

So I decided to cut the hassle and go with the 6%.

Yes, I have to pay social fund/ unemployment fund / state health insurance contributions. That's another 6% - but only if I hire other people - i.e. act as an employer for permanent staff or subcontract some of my work out to other translators / interpreters.

My own social contributions are already within that 6%.

I am also exempt from VAT (not all customers like this, by the way - that's why I have registered a limited liability company to bill this clients including VAT so they can offset my "incoming" VAT against VAT on their sales that's payable to the state). The LLC bills the customer, collects and in turn pays my bills (issued in my capacity as the sole proprietor). I incur some admin costs - but manage to get around one third of total incoiming VAT to stay in the company (VAT rate in Russia is 18%).

I am exempt from income tax (get this!). I am exempt from profits tax (understandable as I am not a corporate entity).

Presently, 6% is all it takes (in Russia).

Of course, tax rates can change so easily... All it takes is a national tax reform

By the way, personal income tax rate in Russia is 13% - and again, it's a flat rate so there are no "income tax brackets".

That's why I have selected the "


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Melanie Nassar  Identity Verified
United States
Local time: 09:19
German to English
+ ...
Paradise Lost Dec 20, 2005

I don't know what happened to my answer above.
I answered less than 10%, but if there had been the option to answer 0%, I would have chosen that. My paradise? Palestine. Not that we don't pay taxes here, we do, but at a very low rate. Considering the services however......
In my case, I just never declared. My earnings do not come here, but to accounts in the US and Europe. So don't anyone tell!

I think the question "what paradise...." should really be directed to those (4%) who answered more than 50%, BTW. Anyone who pays that much in taxes not only lives in a country with fantastic social, health, retirement plans, but is also one of the top earners in that country.
Having said that, I should add that I could live anywhere in the world that I want to, and I chose living here, but I'm not unaware of the difficulties.
Merry Christmas to everyone from Bethlehem!

[Edited at 2005-12-21 05:34]


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Hynek Palatin  Identity Verified
Czech Republic
Local time: 08:19
English to Czech
+ ...
Taxes Dec 21, 2005

armaat MNassar wrote:

I don't know what happened to my answer above.


Just a technical problem. If you want to use the "less than" sign, you have to encode it as &lt;, otherwise it's going to be taken for an HTML tag and part of your text will be hidden. The same goes for "greater than", which should be encoded as &gt;.

I think the question "what paradise...." should really be directed to those (4%) who answered >50%, BTW. Anyone who pays that much in taxes not only lives in a country with fantastic social, health, retirement plans, but is also one of the top earners in that country.


Well, it depends. There is progressive taxation in my country. The more you earn, the higher income taxes you pay - up to 32%. Plus the compulsory social and health insurance. All together it gets close to 50%, but the whole system is far from fantastic. (But might be great compared to some other countries, I admit.)


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Sara Freitas
France
Local time: 08:19
French to English
Yeah, but.... Dec 21, 2005

Parrot wrote:

Sara Freitas-Maltaverne wrote:

contributions to Social Security, retirement, et al are not often considered as "taxes". I think we are at 35 to 40 percent for those.


But they're not taxes. On the contrary, they're deductions!




In the US, these deductions are actually called taxes (The Self-Employment Social Security Tax, which is the equivalent to mandatory payroll deductions for employees).

So, in Europe, we might not consider those things "taxes" per se, but in other parts of the world they might be considered as such...

In any case, for the survey, I answered more than 50% (considering that ss and other deductions are "taxes") including income tax, which is of course affected by my spouse's earnings and the fact that we don't have children.

Whatever you call them, in France they are very high. I get great health care in return, but no paid sick leave or unemployment coverage. For retirement, well, we'll just have to wait and see what state the system is in in 30 years, but I am not counting on receiving much in retirement!

Sara


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Pavel Machač  Identity Verified
Czech Republic
Local time: 08:19
Member (2005)
English to Czech
+ ...
20-30 I guess Dec 21, 2005

Victor Potapov wrote:

I pay 6% tax (get this!) on the amount of my gross receipts. It is a flat rate so there's no ceiling above which I will be taxed at a higher rate. Alternatively, I could have selected a 15% tax rate - on my PROFITS. but to do that is a lot of hassle, you have to prove expenses incurred etc.


Enough said, I am moving to Russia!


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