The Super Rich: Start from when the family business is about to go bankrupt!

Chapter 597 WPG still has a high consumption tax! Is legalization not an option? Are the good days of the "five-night feast" over?
When medicines are exported from Xia Kingdom to Europe, if they are chemically synthesized medicines, such as aspirin, the tariffs are usually zero.

For biological products, such as viral vaccines, the tariffs on most types of vaccines are also zero.

As for the 'Xia medicines' that are unique to the Xia Kingdom, they are usually extracted from 'plant medicines' and generally only have a 6.5% tariff.

But the products under Wugengtian have a starting base tariff of 15%, and the highest has reached 35%. How can you say that they are not ripping people off?

More importantly, this is just the tariff; there is also a consumption tax following it.

In Germany, for example, since all products sold at dawn are over-the-counter drugs, the consumption tax is as high as 19%!
The excise tax on over-the-counter drugs in the Kingdom of France is even higher, at a full 20%.

In the Noodle Kingdom, the consumption tax is lower; the consumption tax for over-the-counter drugs is only 10%.

In Holland, where the headquarters of the Europa Medicines Agency is located, the excise tax on over-the-counter drugs is even lower, at only 6%.

Most other countries are in the range of 10% to 15%.

Perhaps from this perspective, the consumption tax seems quite low?
Even less than the tariffs?
However, that's a misconception!
In Europe, there are two types of consumption tax: 'import consumption tax' and 'retail consumption tax', and the calculation basis for these taxes is different.

Take, for example, the 50,000 doses of nitroglycerin that Nova Pharmaceuticals obtained this time.

First, according to Melissa, the nitroglycerin pills contain both endangered species ingredients and are classified as controlled substances, so the tariff on them is 35%.

How are customs duties calculated?
The basis for calculating tariffs is the CIF price, which means that not only the procurement cost but also transportation and insurance costs must be calculated.

Given that the cooperation agreement between Nova Pharmaceuticals and Wugengtian offers the most favorable price, the procurement cost of 50,000 heart-saving pills is only 1.25 million yuan of Xia Guoyuan. This cost price doesn't seem high, and the tariffs won't be too much either, right?

Don't rush.
Given the small size and light weight of the heart medicine, the price of air freight would not be too high, but the insurance cost would not be low. Let's assume the final landed price is 1.3 million yuan.

This transportation cost and insurance cost figure is not actual data; it is merely a coordinate figure for ease of calculation.

According to the coordinated data, the tariff is 35% of 130 million Xia Guoyuan, which corresponds to an amount of 45.5 million Xia Guoyuan. That seems like a lot, doesn't it?

After tariffs, VAT is coming.

Assuming all sales take place within the Kingdom of France, the corresponding VAT rate would be 20%.

The calculation method for import VAT is: (CIF price + customs duty) * VAT rate = 3510 million Xia Guoyuan.

Does this look like there aren't many?
However, the total amount of tariffs plus import consumption tax has reached 8060 million!
Next up is the retail consumption tax drama, and that's the main event.

For example, Nova Pharma once planned to sell its nitroglycerin pills for $3600 each. This price was not tax-based and would be subject to retail sales tax.

If the final sales destination remains the Kingdom of France, then the corresponding retail consumption tax will also be 20%.

The retail sales tax on a single nitroglycerin pill can reach $720!

五万颗救心丸的零售消费税总计就达到了3600万美元，参考6.3729汇率，对应就是2亿2942万4400夏国元。

Although import consumption tax can be deducted from retail consumption tax, the total tax revenue, including customs duties and import consumption tax deductions, is close to 2.4 million Xia Guoyuan.

However, the total cost of this batch of heart-saving pills that Nova Pharmaceuticals obtained from Wugengtian was only 1.25 million, and even with transportation and insurance, it was only 1.3 million.

The Europa League can gain nearly 2.4 million Chinese yuan in profit simply through tariffs and consumption taxes.

note!

Of these benefits, tariffs are a cost for Nova Pharmaceuticals, but the consumption tax is not a cost for Nova Pharmaceuticals; it is paid by the end consumer.

As for Nova Pharmaceuticals
If sold at $3600 each, the total sales would be approximately 11.47 billion yuan, with a gross profit of about 9.7 million yuan.

It looks like a lot, right?
No, no!
This is the gross profit before taxes!
Taking the Kingdom of France as an example again, since the above calculations all take France as the final sales location as a reference, the first thing is the 25% corporate income tax.

Then there are special taxes on the pharmaceutical industry, social security taxes, and so on. All of these combined are not small amounts and could easily exceed 30%.

In short, Nova Pharma used to be able to gain significant profits by paying relatively low protection fees, but now that the European Medicines Agency (EMA) has been forcibly opening up the market, life is not easy for these overseas agents.

Based on this tax rate and the gross profit of 970 million Xia Guoyuan, a rough calculation shows that the corresponding tax would be at least 200 million Xia Guoyuan.

In addition to the previous tariffs and consumption taxes of over 200 million Xia Guoyuan, the Europharmaceutical Administration (EMA) can extract more than 440 million Xia Guoyuan in 'kickbacks' from the transaction between Nova Pharmaceuticals and Wugengtian after forcibly opening Wugengtian this time.

Nova Pharma didn't pay this much in protection money before!

It was precisely because of this that those in the Europa League who did not benefit from it pushed the Europa Medicines Authority (EMA) to open its doors at dawn.

After all, if they don't get any benefits, then others won't get any benefits either, and it will greatly increase tax revenue. Isn't that a good thing?

The only downside is probably Europa's overseas distributors, right?
That's not right either!

Given the strength of Wugengtian's products, although Europa's overseas distributors are being hit hard by taxes, these costs are ultimately passed on to consumers.

After all, as long as consumers are willing to pay, the related costs will naturally be passed on to them.

On the surface, it appears that the legalization of the May Day holiday was forced and Europa's overseas distributors were forcibly taxed, but in reality, it is not either of them that are harmed.

'An Wuyang: What about over in Great Britain?'

'An Wuyang: Are they going to forcibly legalize it over there too?'

Most of the time, An Wuyang also included Great Britain in the Europa League, even though Great Britain has withdrawn from the Europa League.

Melissa: I'm sorry, Ms. Ann, we are unaware of the situation in Great Britain.

Melissa: Mr. Newman Miller of Glen Medical is not with us.

'An Wuyang: Okay, I'll text him myself.'

An Wuyang immediately sent a message to Newman Miller, the Xia Guo representative of Grand Pharmaceuticals, through the Xiaobaige app.

'Worry-free: Mr. Newman, are you aware of the EMA situation?'

An Wuyang got straight to the point, not wanting to beat around the bush.

After all, it's no secret that the European Medicines Agency (EMA) has been forcibly opening the gates at dawn, and it's already caused quite a stir. If the Medicines and Healthcare products Regulatory Agency (MHRA) of the British Empire were to also force the gates at dawn, it would be something that the gates themselves couldn't refuse.

Just like the EMA forcibly opening the gates at dawn, does it need the dawn's consent?
Newman: Good evening, Mr. An.

Newman: I already know about the EMA situation, and we at Grand Pharmaceuticals are also inquiring whether the MHRA will make similar reforms.

Newman: If the MHRA makes such reforms, our cooperation will be possible.

'All is well: Our cooperation continues!'

'All is well: Everything proceeds as usual!'

Newman breathed a sigh of relief!

Given that An Wuyang had confirmed the premise for continued cooperation, the subsequent exchanges were very pleasant.

Newman understood that the corresponding costs wouldn't be passed on to Wugengtian or Grand Pharmaceuticals; instead, consumers would bear the burden. Newman wasn't worried about consumers not buying in!

Because consumers who can afford products sold at dawn are generally financially strong, so even with a slight increase in consumption tax, they will still buy what they need.

As for those who can't afford it?

I still can't afford it!

While An Wuyang and Newman were still chatting, a message came from the Shengqing Brothers group.

Li Shiyu: @An Wuyang: Brother Wuyang, it seems you guys got tricked in the middle of the night!

Li Shiyu had a better understanding of the situation. He knew that it was not a good thing that EMA suddenly announced that all of Wugengtian's products had passed EMA certification.

Although Li Shiyu believed that An Wuyang could see through the malice hidden in this, he still couldn't help but remind him.

An Wuyang: We were definitely scammed!

'An Wuyang: EMA is forcing us to get promoted before dawn, I'm speechless!'

Zhu Guanghao: I've never seen anything like this before!

Zhu Guanghao: I never expected the EMA to do something like this.

'An Wuyang: Actually, the FDA (the US FDA) has done this before, but the FDA only talked the talk; after we raised questions at Wugengtian (a company name), they didn't actually implement product certification for Wugengtian.'

Previously, the FDA also wanted to target Wugengtian, but Wugengtian righteously stated that it had never applied for FDA certification, so how could it have passed FDA certification?

Given this situation, the FDA ultimately only paid lip service and did not actually include Wujingtian's products in the list of certified products.

However, the European Medicines Agency (EMA) is no longer engaging in empty talk and is not giving Wu Gengtian any room for rebuttal. They are directly taking a hard line. What can Wu Gengtian do?
It's simply impossible!
'An Wuyang: Now that the EMA has forced us to order a prescription, I reckon the next thing they'll do is force us to order prescriptions in the middle of the night, right?'

An Wuyang: After all, they forcibly opened our gates at dawn, so future transactions will have to be legalized, making smuggling much more difficult.

'An Wuyang: If you go to Japanese markets or Southeast Asian markets again, you'll probably be taxed both ways.'

Lee Se-woo: I get it! All taxes, all taxes, all taxes!

Zhu Guanghao: Are other drug administrations really going to follow suit?

'An Wuyang: It's highly likely!'

'An Wuyang: The main reason is that the EMA has set a precedent, and other drug regulatory agencies will most likely follow suit, since it involves significant interests.'

Honestly, An Wuyang never dreamed that there would be such a scheme!
The Europharmaceutical Regulatory Agency (EMA) launched a sudden and unexpected attack; who can withstand that?
The key point is that whether it was the fifth watch of the night or everyone was safe and sound, there was absolutely no preparation whatsoever, okay?

Li Shiyu: Actually, taking the proper and legal route is fine too.

Li Shiyu: We paid quite a bit in protection money for taking special routes before.

The main reason is that Li Shiyu and his group have too few overseas resources and lack support from the end-consumer market, so the related protection fees are higher.

Now that there are legitimate and legal channels available, even if additional taxes are required, it's uncertain whether the profits will be more or less compared to before.

Around 8 p.m., An Wuyang received a message from Musk.

Musk: Andy, get ready, our FDA in the Bald Eagles is going to learn from the EMA too.

Musk: Your good days are over!

Musk: "Glorious Pharma and Abervez Medical are lobbying the FDA together, and with the support of the IRS, your entire product line could face heavier tariffs!"

'Are you alright?'

'An Wuyang: What do you mean by saying our good days at dawn are over?'

'Peace and safety: Is it possible that your good days are over?'

'An Wuyang: If you're buying Double Happiness in bulk, won't you be the one paying all the taxes?'

Musk: That's not a win-win situation!

Musk: That's just some kind of sugar water from your Xia Kingdom.

An Wuyang stared blankly at Musk's message.

good good!
He understood Musk's meaning in an instant; this guy was planning to change his identity!

So what if the FDA approves all of our products before dawn?

He didn't buy two happy items!

He only bought some sweet soup from Xia Kingdom!

If that doesn't work, we can make other products and then try to get them into Bald Eagle.

Collecting taxes?

Taxing ordinary people and the middle class is enough; why tax the wealthy?
Do you even understand the unique national conditions of the bald eagle?

'Aren't you worried?'

Musk: What's there to worry about?

Musk: I didn't handle that transaction. Someone just imported a batch of products from your Xia country to the Bald Eagle.

As for where the product ended up in Bald Eagle, who knows?

Nobody even cares!

For cases like Musk's, which involve non-commercial, private use, it's really difficult to investigate, and the cost of doing so would be too high.

Musk: You should be worried about how much tariffs we bald eagles will impose on you in the middle of the night.

Musk: Given the monopolistic nature of your practices, which operate from the early hours of the morning, it's not just a matter of tariffs; it could even trigger an antitrust investigation.

That's how domineering the bald eagle is!
As long as Wugengtian's products enter Bald Eagle through legitimate channels, it is equivalent to establishing a connection with Bald Eagle's market, which would then grant Bald Eagle long-arm jurisdiction.

With the support of long-arm jurisdiction, an antitrust investigation can be conducted against Wugengtian.

Avoiding an antitrust investigation would be simple: just stop selling in the Bald Eagle market. But the problem is that Five Watches has a partnership with a pharmaceutical giant in the Bald Eagle.

Should we force Wugengtian and the pharmaceutical giant Bald Eagle to terminate their cooperation?
An Wuyang wouldn't do something so foolish as to shoot himself in the foot!
'All is well: Actually, these are all minor issues!'

Musk: ?

(End of this chapter)