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EVE New Citizens Q&A

 
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Market Taxes - Clarify Please
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Brack-Friday Bunduru
Republic University
Minmatar Republic
#1 - 2016-11-27 11:14:06 UTC  |  Edited by: Brack-Friday Bunduru
I'm having trouble understanding Broker Fees and Sales Tax.

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Say i'm buying an item for 100,000,000 ISK, selling it for 150,000,000 ISK.

The Broker Fee is 3% and Sales Tax is 2%.

This is my understanding:

1) Create buy order for item at 100,000,000 ISK - 3,000,000 ISK (3% Broker Fee) charged on top.

** down 103,000,000 ISK **

2) Item is bought for 100,000,000 ISK - No extra fees applied at this stage.

3) I relist item for 150,000,000 ISK - 4,500,000 ISK (3% Broker Fee) Charged

** down 107,500,000 ISK **

4) Item sells for 150,000,000 ISK - 3,000,000 ISK (2% Sales Tax) is Deducted

** up 39,500,000 ISK **

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Is this correct?
Violet Hurst
Fedaya Recon
#2 - 2016-11-27 12:17:36 UTC
Almost, only that in step 3 the brokers fee equals 4.5M ISK (3% of 150M), so your net profit will only be 39.5M.
Brack-Friday Bunduru
Republic University
Minmatar Republic
#3 - 2016-11-27 12:42:21 UTC
Violet Hurst wrote:
Almost, only that in step 3 the brokers fee equals 4.5M ISK (3% of 150M), so your net profit will only be 39.5M.


Ah yeah you're correct, my mistake :)

Have corrected OP to reflect this.

Now the 3% is correct is this correct?
The Larold
This is an anagram of itself.
#4 - 2016-11-27 12:48:13 UTC
Two main things to reduce tax and fee burden when trading:

1. If you are going to be buying / selling high-priced goods on the market regularly, and especially with buy / sell orders, I definitely recommend getting the 'Accounting' and 'Broker Relations' skills up to at least level IV as soon as possible. If you are going to be a career trader, training both to V is probably worth the few weeks of training. (Don't remap _just_ for these two skills though!)

2. As far as I can tell, faction standings really matter with the faction who owns the station where you do your trading. Corp standings matter as well, but not as much as faction as I understand. I used to be a part-time trader in Jita, and getting my standings up to 10 made a big impact on my long-term returns; reduced broker fees if I remember right. (It's been awhile)

Side note not directly related to taxes, but may help cash-flow:

You _may_ want to consider training a few levels of Margin Trading. Without this skill, when you place a buy order, 100% of your bid (desired purchase price) is removed from your wallet. As you skill up in Margin Trading, less and less of that 100% actually comes out of your wallet up front. When the transaction takes place, the rest of the money is taken from your wallet.
Do Little
Bluenose Trading
#5 - 2016-11-27 13:45:44 UTC
You can reduce transaction taxes to 1% with the accounting skill and brokerage to 2.5% with the broker relations skill. You can further reduce the brokerage fee - as low as 2% - by improving standing with the NPC faction and corporation that owns the station. If you sell at a Citadel market, the owner sets and collects the brokerage fee.

When you place a buy order the brokerage is determined by the location where you place the order, not the station where the order is filled - this means you can place a buy order at a Citadel in Perimeter with a 1 jump range so it can be filled in Jita and pay no brokerage if you own the Citadel - or whatever the owner decides to charge you.

Seller always pays the transaction tax. Person who places the order always pays brokerage.

You'll generally find better spreads in inter-regional trade. Perhaps buy orders for meta modules and salvage, sell orders for ammunition and drones at mission hubs. Reverse at a major trade hub.
Violet Hurst
Fedaya Recon
#6 - 2016-11-27 14:06:36 UTC  |  Edited by: Violet Hurst
The Larold wrote:
2. As far as I can tell, faction standings really matter with the faction who owns the station where you do your trading. Corp standings matter as well, but not as much as faction as I understand. I used to be a part-time trader in Jita, and getting my standings up to 10 made a big impact on my long-term returns; reduced broker fees if I remember right. (It's been awhile)
It used to be like this. I'm not sure how to integrate the Citadel update with that formula though.
Brack-Friday Bunduru
Republic University
Minmatar Republic
#7 - 2016-11-27 15:25:43 UTC
Thanks everyone for the advice.
The Larold
This is an anagram of itself.
#8 - 2016-11-27 16:19:05 UTC
Do Little wrote:
When you place a buy order the brokerage is determined by the location where you place the order, not the station where the order is filled - this means you can place a buy order at a Citadel in Perimeter with a 1 jump range so it can be filled in Jita and pay no brokerage if you own the Citadel - or whatever the owner decides to charge you.


OHHH... I bet that's why I keep seeing a big market player that's always coming out of Perimeter, but setting it to 1-jump so trades can come from Jita. Brilliant. I just might want to get in on that action someday...