xXTheoryXx
Moderator
Moderator
Speaker of the House
Representative
Commerce Department
Construction & Transport Department
xXTheoryXx
Speaker
- Joined
- Feb 18, 2026
- Messages
- 226
- Thread Author
- #1
CONGRESS OF THE
COMMONWEALTH OF REDMONT
A BILL TO
Close the Banking Tax Avoidance Loophole
The people of the Commonwealth of Redmont, through their elected Representatives in the Congress and the force of law ordained to that Congress by the people through the constitution, do hereby enact the following provisions into law:
1. Short Title and Enactment
(1) This Act may be cited as the 'Deposit Tax Act'.
(2) This Act shall be enacted immediately upon its signage.
(3) This Act has been authored by Speaker of the House xXTheoryXx, Co-authored by Deputy president of the senate TrueDarkLander.
(4) This Act has been co-sponsored by Deputy president of the senate TrueDarkLander.
(5) This Act amends the following acts:
(a) Taxation Act
(b) Criminal Code Act
(c) Banking Income Tax Act
2. Reasons and Intent
(1) Under the current Taxation Act, deposit-taking financial institutions are exempt from balance taxes. This creates a mechanism by which players may circumvent balance taxation by depositing funds into a financial institution, reducing their taxable personal balance to zero.
(2) This Act closes that avoidance mechanism by imposing a flat monthly deposit tax on deposits held by players in registered financial institutions.
(3) This Act is intended to ensure that wealth stored in financial institutions is subject to a comparable tax burden as wealth held personally.
3. Definitions
(1) For the purposes of this Act, the following definitions shall apply:
(a) Total Deposits. Means the aggregate balance of all deposit accounts held across all registered financial institutions at the end of a taxation period, as reported to the Department of Commerce under this Act.
(b) New Deposits. Means the total value of all deposits received by a financial institution from a depositor during a taxation period, excluding any amounts transferred between accounts within the same institution.
(c) Taxation Period. Means a calendar month.
(d) Tax Notice. Means a notice issued by the Department of Commerce to a financial institution specifying the deposit tax liability for a given taxation period.
PART II — DEPOSIT TAX
4. Tax Imposed
(1) A deposit tax is imposed on every registered financial institution for each taxation period, comprising two components:
(a) Standing Balance Tax. A tax of 2.5% on the total deposits held by the institution at the end of the taxation period; and
(b) New Deposit Tax. A tax of 2.5% on the total value of all new deposits received by the institution during the taxation period.
(2) Both components apply independently and are payable in full for each taxation period.
(3) The deposit tax for a given taxation period is calculated as follows:
(a) Standing Balance Tax = Total Deposits at end of period × 2.5%
(b) New Deposit Tax = Total new deposits received during the period × 2.5%
(c) Total Tax Payable = Standing Balance Tax + New Deposit Tax
5. Reporting Obligations
(1) Every registered financial institution shall submit a monthly report to the Department of Commerce no later than 7 days after the end of each taxation period.
(2) The report shall include, for each account held at the institution:
(a) The full in-game username of the account holder;
(b) A unique account identifier;
(c) The opening balance of the account at the start of the taxation period;
(d) The closing balance of the account at the end of the taxation period;
(e) The total value of all deposits received into the account during the taxation period, itemised by date and amount;
(f) The total value of all withdrawals made from the account during the taxation period, itemised by date and amount;
(g) The total value of any intra-institutional transfers involving the account, itemised by date, amount, and the account transferred to or from; and
(h) The aggregate total of all deposits held by the institution across all accounts at the end of the taxation period.
(3) Reports shall be prepared and submitted in a form prescribed by the Department of Commerce.
(4) A financial institution shall not omit, consolidate, or anonymise any account in its report. Every account, regardless of balance, must be individually disclosed.
(5) The Department of Commerce may at any time audit the deposit records of any financial institution to verify the accuracy of any report submitted under this section.
(6) Where a report is incomplete, inaccurate, or filed late, the Department of Commerce may:
(a) Estimate the deposit tax liability of the affected institution on any reasonable basis; and
(b) Refer the matter for enforcement action under section 7.
(7) Every registered financial institution shall retain all records, books, and documentation sufficient to verify the accuracy of any report submitted under this section indefinitely.
(8) A financial institution shall submit complete records of all account activity to the Department of Commerce as part of its monthly report under subsection (1). Submission of records is mandatory and does not require a request from the Department of Commerce.
6. Collection
(1) The deposit tax is collected by the Department of Commerce.
(2) Upon receipt of reports under section 5, the Department of Commerce shall calculate each player's deposit tax liability and issue a tax notice to the relevant financial institution.
(3) Upon receiving a tax notice, a financial institution may satisfy the deposit tax liability in one of the following ways:
(a) Absorption. The financial institution pays the full deposit tax liability from its own funds and remits it to the DCGovernment account; or
(b) Pass-through. The financial institution withholds the deposit tax from the relevant depositor's account and remits it to the DCGovernment account.
(4) Regardless of which method is chosen under subsection (3), the full deposit tax must be remitted to the DCGovernment account within 5 days of receiving a tax notice.
(5) A financial institution must notify its depositors in advance, through its publicly available terms, whether it intends to absorb the deposit tax or pass it through to depositors.
(6) Where a financial institution fails to remit as required under subsection (4), the financial institution shall itself be liable for the unpaid deposit tax.
7. Enforcement
(1) Failure to comply with the reporting obligations under section 5 constitutes non-compliance and shall be subject to the penalties and enforcement mechanisms available under the Banking Income Tax Act.
(2) The Department of Commerce may take any enforcement action available to it under the Banking Income Tax Act or the Taxation Act to recover unpaid deposit tax.
PART III — CONSEQUENTIAL AMENDMENTS
8. Amendment of the Taxation Act
(1) The Financial Institution Taxation Exemptions section of the Taxation Act is amended by adding the following:
(a) The balance tax exemption afforded to deposit-taking financial institutions does not exempt depositors from deposit tax liability imposed under the Deposit Tax Act. Nothing in this section shall be read to reduce or eliminate the deposit tax obligations of any player.
9. Amendment of the Taxation Act — Financial Institution Rights
(1) Section 8(1) of the Taxation Act is amended as follows:
8 - Financial Institution Rights
(1) Information shared with regulatory bodies must satisfy a 'need-to-know' principle. For example:
(a)
(a) The Department of Commerce does not always need to know the identity of account holders, except where the identity of an account holder is required for the purposes of enforcing and monitoring compliance with regulatory requirements as set by statute or policy, in which case financial institutions are obligated to disclose the full in-game username of each account holder in their monthly report.
(b) The Department of Commerce needs to have a reasonable justification for accessing the data it is requesting (this justification does not have to be shared with the Financial Institution).
10. Amendment of the Criminal Code Act — Tax Evasion
(1) Section 14 of the Criminal Code Act is amended as follows:
14 - Tax Evasion
Offence Type: Indictable
Penalty: Up to 200 Penalty Units; Up to 10 minutes imprisonment
A person commits an offence if the person:
(a) intentionally or maliciously transfers in-game funds to one or more personal in-game balances or company in-game balances without a legitimate purpose, resulting in the evasion of personal tax liability; or
(b) transfers property to one or more individuals without legal ownership or a legitimate purpose, with the intent to evade property tax liability; or
(c) uses bank accounts in order to avoid tax liabilities regarding the regular use of such bank accounts, including but not limited to avoidance of Deposit Taxes or other associated costs.
Relevant Law: Act of Congress - Commercial Standards Act
11. Amendment of the Criminal Code Act — Financial Institution Tax Evasion
(1) Section 26 of the Criminal Code Act is amended as follows:
26 - Financial Institution Tax Evasion
Offence Type: Indictable
Penalty: Up to 1000 Penalty Units; Up to 60 minutes imprisonment
A financial institution commits an offence if the financial institution:
(a) Understates, omits, or misrepresents taxable income;
(b) Overstates, fabricates, or improperly claims deductions;
(c) Conceals, disguises, or mischaracterizes any transaction, arrangement, or instrument; or
(d) Enters into any arrangement or series of arrangements for the purpose or effect of avoiding tax payable under the Banking Income Tax Act or Deposit Tax Act,
12. Amendment of the Criminal Code Act — Obstruction of Tax Administration
(1) Section 28 of the Criminal Code Act is amended as follows:
28 - Obstruction of Tax Administration
Offence Type:
Penalty: Up to 500 Penalty Units; Up to 30 minutes imprisonment.
A person commits an offence if the person:
(a) Obstructs, hinders, or interferes with an audit, inspection, or investigation under the Banking Income Tax Act;
(b) Fails to comply with a lawful requirement of the Department of Commerce under the Banking Income Tax Act; or
(c) Provides false or misleading information during an audit.
13. Amendment of the Criminal Code Act — Failure to Maintain or Produce Records
(1) Section 29 of the Criminal Code Act is amended as follows:
29 - Failure to Maintain or Produce Records
Offence Type:
Penalty: Up to 100 Penalty Units; Up to 10 minutes imprisonment.
A
(a)