KickStarter Monomyth - A first person action RPG/dungeon crawler - now available on Early Access

[Raghar]

Crippled?.... Disability?... Yet you were still able to work... for over 10 years?!!

No I wasn't.

And I'd have to work as programmer from home, and only PART TIME.

 

[Hammer Of The Heretics]

I once had a co-worker who was essentially quadriplegic - confined to a wheelchair with very limited motion in his arms. He typed using pencils strapped to his hands.

He was a crackerjack programmer. He was also crippled and physically disabled.

 

[mindx2]

I once had a co-worker who was essentially quadriplegic - confined to a wheelchair with very limited motion in his arms. He typed using pencils strapped to his hands.

He was a crackerjack programmer. He was also crippled and physically disabled.

 

[KeighnMcDeath]

So....... is the project dead now?

 

[Matador]

I don´t like early access usually, but this one I can get behind for sure, and I hope a lot of people support it.

 

[HoboForEternity]

tldr early access is good. better than launching broken (more windows to recover, look at insomnia: the ark) game.

personally i don't play early access (keyword is play, i do buy them occasionally from codex darlings like colony ship) but i think early access is good if the developer doesnt abuse it or trapped in feature creep (exanima / sui generis dev)

 

[FreshCorpse]

Assuming you're a fellow accountant, I don't think a small company would be applying IFRS (and therefore IFRS 15 would not apply). I think his company would apply local GAAP where, generally speaking, the revenue would be accounted for under an IAS 18 equivalent. Having said that, the money he received is simply a prepayment / deferred income like you said, and I cannot see any reason to recognise as revenue just yet. Wouldn't fly by any auditor, if an audit is required for small companies in Austria.

I'm not an accountant I'm a small business owner, so I have to deal with an accountant for my own corporate filings but the main job sometimes involves reading the filings of big companies, hence the mistake.

...

...

The only question that actually concerns me is: "How long can down payments remain down payments in the books?"

The answer is: until you deliver the product.

Regardless, this feels like one of those cases where the tax office already writes you down for an arbitrary struggle session in the future.
And that's really the problem: Their arbitrary nature. They literally come up with stuff as they go.

It's true. One of the interesting things with tax law is that the taxman is not the final arbiter of what is legal. They read the law, lobby for the legislation they want but still the courts may strike it down. That is confusing because the taxman deliberately misrepresents himself as the final arbiter, which he obviously is not. But you should try very hard not to go to trial on this subject.

However, before you can take any money out of the company you first have to pay 24% revenue tax. That's pretty standard around the world (not the percentage - just the fact that you have to pay that), but with that, the full tax rate comes to ~45%
So in other words, for every 10$ you receive from Steam (or whatever platform you are selling on), 4.5$ go to the state.

Alternatively, you can keep the cash in the company and pay yourself a salary.
Then you can minimize the income tax as it depends on the amount you pay yourself. Also, your salary lowers the company's profits for the current year, meaning a lower revenue tax base.
For example, you can pay yourself up to 11k a year and you won't pay any income tax at all because you are in the lowest income bracket. Additionally, a revenue of let's say 100k is now only 89k, so instead of 24k revenue tax you "only" pay 21.36k (What a steal! Literally.)
This method also has the effect that you will regularly eat lentils from a can.

On the other hand, if you had a windfall profit, you can't pay yourself too much salary within one year either (e.g., you make 100k in January and you pay yourself 90k until the end of the year) because then the state will say " No, no, no! What you are doing is a "hidden profit distribution". You put that back or pay the full 45%!"
That's another one where they slap people on their fingers regularly. Not that I would have to fear it.

In all of this, you have to mind the social security contributions. As I mentioned before, whatever income you receive adds to your determination base so practically the full tax rate for taking profits might go beyond 45%.
Though, I believe that contributions are capped at 6k per month or so.

You are terrible, terrible, at tax.

There is no such thing as "revenue tax" you are presumably mixing up either VAT or corporation tax. This thing about 45% of computer game sales going to the taxman is insane rambling nonsense.

This thing about paying yourself in salary being tax efficient is dogshit. Salaries are usually taxed at a far higher rate than cap gains, dividends, etc. Your accountant should be advising you to pay a small salary up to your local lower-tax threshold and then taking the rest as dividends or whatever is tax efficient for you.

Please, stop taxposting and just concentrate on game development - and next time hire a better accountant who isn't going to advise you to randomly recognise revenue when you haven't delivered the product. As xuerebx has implied above: that is sometimes called 'fraud'.

 

[xuerebx]

Yep - also for the record revenue tax = sales tax = VAT in Europe (and VAT is levied on the consumer, not the company, who just acts as an intermediary to collect the VAT and send it back to the government [there are some complex exceptions]), whereas companies are taxed on their profits (chargeable revenue less deductible expenses), and so no revenue = no profits = no taxes. Rat Tower Software GmbH should thus not really have any tax to pay until the game is actually delivered and sold (unless you have any other income streams). Steam's cut from your sales will reduce your tax liability since that should be deductible.

I don't think your accountant is not competent because this is basic accounting stuff, it's most probably a miscommunication or perhaps he's not communicating the concepts well (or you're not understanding him well which is fine because I don't understand programming concepts in the same way).

 

[mediocrepoet]

Yep - also for the record revenue tax = sales tax = VAT in Europe (and VAT is levied on the consumer, not the company, who just acts as an intermediary to collect the VAT and send it back to the government [there are some complex exceptions]), whereas companies are taxed on their profits (chargeable revenue less deductible expenses), and so no revenue = no profits = no taxes. Rat Tower Software GmbH should thus not really have any tax to pay until the game is actually delivered and sold (unless you have any other income streams). Steam's cut from your sales will reduce your tax liability since that should be deductible.

I don't think your accountant is not competent because this is basic accounting stuff, it's most probably a miscommunication or perhaps he's not communicating the concepts well (or you're not understanding him well which is fine because I don't understand programming concepts in the same way).

I haven't been paying that close attention to this, but even if Rat Tower has fucked up a filing somewhere, he should be able to amend and file the correction. It's a pain in the ass, but should be alright assuming nothing else is going on. -- Probably stressing himself out over nothing.

 

[xuerebx]

Yeah it's usually fixable. I've seen far worse by huge multinationals who should have competent finance teams

 

[Feargus Jewhart]

taxalot you are needed here, oh mighty and great taxman! Your knowledge as the auditor of northeastern interest and the mallet of the french government!

Qui qui! I summon thee, taxalot !
Croissant! Baguette! Oui qui! Tax evasion! Your wives boobs!

 

[RatTower]

Assuming you're a fellow accountant, I don't think a small company would be applying IFRS (and therefore IFRS 15 would not apply). I think his company would apply local GAAP where, generally speaking, the revenue would be accounted for under an IAS 18 equivalent. Having said that, the money he received is simply a prepayment / deferred income like you said, and I cannot see any reason to recognise as revenue just yet. Wouldn't fly by any auditor, if an audit is required for small companies in Austria.

I'm not an accountant I'm a small business owner, so I have to deal with an accountant for my own corporate filings but the main job sometimes involves reading the filings of big companies, hence the mistake.

...

...

The only question that actually concerns me is: "How long can down payments remain down payments in the books?"

The answer is: until you deliver the product.

Regardless, this feels like one of those cases where the tax office already writes you down for an arbitrary struggle session in the future.
And that's really the problem: Their arbitrary nature. They literally come up with stuff as they go.

It's true. One of the interesting things with tax law is that the taxman is not the final arbiter of what is legal. They read the law, lobby for the legislation they want but still the courts may strike it down. That is confusing because the taxman deliberately misrepresents himself as the final arbiter, which he obviously is not. But you should try very hard not to go to trial on this subject.

However, before you can take any money out of the company you first have to pay 24% revenue tax. That's pretty standard around the world (not the percentage - just the fact that you have to pay that), but with that, the full tax rate comes to ~45%
So in other words, for every 10$ you receive from Steam (or whatever platform you are selling on), 4.5$ go to the state.

Alternatively, you can keep the cash in the company and pay yourself a salary.
Then you can minimize the income tax as it depends on the amount you pay yourself. Also, your salary lowers the company's profits for the current year, meaning a lower revenue tax base.
For example, you can pay yourself up to 11k a year and you won't pay any income tax at all because you are in the lowest income bracket. Additionally, a revenue of let's say 100k is now only 89k, so instead of 24k revenue tax you "only" pay 21.36k (What a steal! Literally.)
This method also has the effect that you will regularly eat lentils from a can.

On the other hand, if you had a windfall profit, you can't pay yourself too much salary within one year either (e.g., you make 100k in January and you pay yourself 90k until the end of the year) because then the state will say " No, no, no! What you are doing is a "hidden profit distribution". You put that back or pay the full 45%!"
That's another one where they slap people on their fingers regularly. Not that I would have to fear it.

In all of this, you have to mind the social security contributions. As I mentioned before, whatever income you receive adds to your determination base so practically the full tax rate for taking profits might go beyond 45%.
Though, I believe that contributions are capped at 6k per month or so.

You are terrible, terrible, at tax.

There is no such thing as "revenue tax" you are presumably mixing up either VAT or corporation tax. This thing about 45% of computer game sales going to the taxman is insane rambling nonsense.

This thing about paying yourself in salary being tax efficient is dogshit. Salaries are usually taxed at a far higher rate than cap gains, dividends, etc. Your accountant should be advising you to pay a small salary up to your local lower-tax threshold and then taking the rest as dividends or whatever is tax efficient for you.

Please, stop taxposting and just concentrate on game development - and next time hire a better accountant who isn't going to advise you to randomly recognise revenue when you haven't delivered the product. As xuerebx has implied above: that is sometimes called 'fraud'.

Nobody has recognized any revenue yet. I said this already.

But the thing about the 45%: That is no joke. Believe it or not. That is literally the full tax rate for taking profits. Look (you gotta auto translate those websites):
https://www.usp.gv.at/steuern-finan...lastung-im-vergleich-zur-einkommensteuer.html

Spoiler

It is true that I mixed up the wording here though. There is no such thing as a "revenue tax". What I mean is in fact "corporate tax". Either way, it's 24%. And after that (as a private individual), you pay 27.5% capital gains tax/dividend tax/call it whatever you want - in German, it's called KESt (Kapitalertragssteuer).

So if I sell a video game and Valve sends me 10 bucks for that (I am assuming here they already withheld their cut) and I need those 10 bucks right now (i.e., I want to take the profit), then the following things happen:
I first pay 24% corporate tax on that. That's 7.6$ that arrive in my pocket (I know you are not paying corporate tax right away, but for simplicity's sake).
Now when I do my taxes as a private individual (independently from the company), then I need to write those 7.6$ down.
Those 7.6$ count as "Kapitalertrag" (capital gains/yields). They are not coming from employment. Now on all capital gains, you pay 27.5% capital gains tax.
This brings you down to 5.51$, which you can freely spend on anything you want.
But 4.49$ stay with the state (or rather go back to it, from a practical perspective).

I would be thrilled to be wrong about this but as I see it, 45% of that video game money just went to the taxman.

And with that tax rate of 45%, you are essentially equivalent to one of the higher income brackets in terms of salary:
https://www.bmf.gv.at/themen/steuer...etraege/steuertarif-steuerabsetzbetraege.html
And that is the case no matter how much profit you take. Whether you take 5k or 10k or 100k you always pay 45% on what you take.
And that's why you have to juggle it with the salary payments. Not only are these payments company expenses (lowering the corporate tax) but they are taxed under a tiered payroll/income tax.
So for the first 11k you pay nothing, for the next 7k you pay 20%, for the 13k after that 30% and so on.
You can play with this calculator here if you like: https://bruttonetto.arbeiterkammer.at/
It doesn't show the exact breakdown of taxes, but type in, let's say, a 100k yearly salary and that will get you a final payment of 62k.
And that's an effective tax rate of 38% - 7k difference even with a high salary like that; I wouldn't even dream of paying myself that but over time it is still the better option than taking profits.
The salary also includes social security payments, which are a big part of that tax rate.

But now let's go into overdrive. Let's get some blood boiling here:
With the new ruling I mentioned, saying that the determination base of mandatory social security payments is also influenced by taken profits (not just by your payroll), you will pay - additionally to the 45% (!) - an according social security contribution. I won't even try to figure out what the effective tax rate is after that, but if it's anything like the social security payments in a regular salary, that might be another 14k on a 100k profit distribution. Meaning those 5.51$ from before are actually more like 4.1$. But that is something I do not know. And also social security payments are tiered and capped and whatnot so you can't really calculate it like that (probably). That's just a bonus.

I know it sounds like insane schizo ramblings.
But I have taken my pills and it's not going away.
Unless I am severely misunderstanding something here (fingers crossed) the tax rate for taking profits is 45%.
And if that is so: You gotta optimize via salary payments.

It's not like this is a problem I am having right now anyway. Just something to increase blood pressure.

Yep - also for the record revenue tax = sales tax = VAT in Europe (and VAT is levied on the consumer, not the company, who just acts as an intermediary to collect the VAT and send it back to the government [there are some complex exceptions]), whereas companies are taxed on their profits (chargeable revenue less deductible expenses), and so no revenue = no profits = no taxes. Rat Tower Software GmbH should thus not really have any tax to pay until the game is actually delivered and sold (unless you have any other income streams). Steam's cut from your sales will reduce your tax liability since that should be deductible.

I don't think your accountant is not competent because this is basic accounting stuff, it's most probably a miscommunication or perhaps he's not communicating the concepts well (or you're not understanding him well which is fine because I don't understand programming concepts in the same way).

I haven't been paying that close attention to this, but even if Rat Tower has fucked up a filing somewhere, he should be able to amend and file the correction. It's a pain in the ass, but should be alright assuming nothing else is going on. -- Probably stressing himself out over nothing.

No worries. It's all fine. I'm just rambling.

 

[taxalot]

what is going on here

 

[KeighnMcDeath]

NO MORE TAX TALK!

NEIN!!!

 

[taxalot]

what country is rat tower from ?

 

[KeighnMcDeath]

One where rats rule and lay siege against the empire.

 

[taxalot]

I just read further. He's not french. I can't tax him. Leave me alone.

 

[KeighnMcDeath]

I just read further. He's not french. I can't tax him. Leave me alone.

 

[mediocrepoet]

I just read further. He's not french. I can't tax him. Leave me alone.

What good is the EU if you can't unilaterally tax and audit random other euros?

 

[taxalot]

I just read further. He's not french. I can't tax him. Leave me alone.

What good is the EU if you can't unilaterally tax and audit random other euros?

The EU is making it even harder to tax my countrymen, you know.

 

[Sacibengala]

What's happening to this thread? Dungeon tax simulator when?

 

[mediocrepoet]

What's happening to this thread? Dungeon tax simulator when?

The game dev decided completely reworked the game. It's now going to be:

MONEYMYTH: A First Action Taxman RPG - Now in beta!

I'd totally pick this up.

It should be like Thief, except instead of sneaking around and breaking into places, you basically mug people for their wages.

 

[Butter]

It should be like Thief, except instead of sneaking around and breaking into places, you basically mug people for their wages.

Paradox Simulator.

 

[Nikanuur]

I am not following all of this. If I expect to get 30k I must know that xx k of that goes to taxes, if all of it turns out to be profit. Which it won't, because I can lower the profit and still "gain for myself" by buying and using equipment, energy, rent, etc., (my awesome new computer which I use for gaming AND for work for example). We all know how taxes work: revenue-expense=profit/loss=basis for tax rate. So, what's the problem of paying those xx K from the backers' money to the financial bureau at the very most? If I am horribly wrong, please correct me, but I believe Kickstarter works on the grounds of good faith and reasonable, presentable effort. So, there isn't anything about the creator actually owing money or product to anyone, much less to their backers. That being said, I repeat, I very much respect what you have already shown here. Even if you weren't, I'd be like, Oh well, this was worth it anyway, but I actually do believe you are a talented AND honest person that strives to deliver an awesome game for the most part.

 

[RatTower]

I am not following all of this. If I expect to get 30k I must know that xx k of that goes to taxes, if all of it turns out to be profit. Which it won't, because I can lower the profit and still "gain for myself" by buying and using equipment, energy, rent, etc., (my awesome new computer which I use for gaming AND for work for example). We all know how taxes work: revenue-expense=profit/loss=basis for tax rate. So, what's the problem of paying those xx K from the backers' money to the financial bureau at the very most? If I am horribly wrong, please correct me, but I believe Kickstarter works on the grounds of good faith and reasonable, presentable effort. So, there isn't anything about the creator actually owing money or product to anyone, much less to their backers. That being said, I repeat, I very much respect what you have already shown here. Even if you weren't, I'd be like, Oh well, this was worth it anyway, but I actually do believe you are a talented AND honest person that strives to deliver an awesome game for the most part.

The "issue" in this matter was not the tax itself. The issue was that we had to justify the red in the books.
My suspicion was, we had to do that because of the 20% VAT, that is inherently contained in those red numbers.
Because if I, let's say, would use all the Kickstarter money and then recognize it as revenue later (basically nullifying any expenses), I would still owe 20% of the KS money to the state. Money, which at that point then I would not have (or rather the company wouldn't have). I believe that is what gave them a slight distaste for us.

The solutions would be fairly simple. Either I...
a) use private savings to pay the VAT or
b) have another stream of income ready (for example an EA or a full release)

Anyway, none of this has any relevance as long as the Kickstarter money isn't recognized as revenue.
If legally that money can just hold out as down payments indefinitely (or rather, as long as the KS pledges haven't been fulfilled), then none of this is an issue.
I still wonder, why they would have us justify the red in the books though.