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The total Cost of Goods Sold (COGS) is defined as a lump sum of 97.9% of the turnover of a diamond trading company generated by genuine and habitual diamond trade. As a result, the gross margin used for taxation purposes is 2.1% of that turnover. Subsequently, expenses and tax deductions may be deducted from that gross margin. The net taxable income after deductions however cannot be lower than 0.55% of turnover. A slightly higher floor rate of 0.65% will be applicable only during the first year of implementation of the Carat Tax.

The turnover generated by genuine and habitual diamond trade is the sum of all diamonds sold during a given tax period, as reported on the invoices issued by the diamond trading company. This significantly increases the clarity and predictability of the total taxes due. Like in the current fiscal regime, taxable income from diamond trade implies that at least one director receives remuneration that is no lower than a certain threshold.

The total Cost of Goods Sold (COGS) is defined as a lump sum of 97.9% of the turnover of a diamond trading company generated by genuine and habitual diamond trade. As a result, the gross margin used for taxation purposes is 2.1% of that turnover. Subsequently, expenses and tax deductions may be deducted from that gross margin. The net taxable income after deductions however cannot be lower than 0.55% of turnover. A slightly higher floor rate of 0.65% will be applicable only during the first year of implementation of the Carat Tax.

The turnover generated by genuine and habitual diamond trade is the sum of all diamonds sold during a given tax period, as reported on the invoices issued by the diamond trading company. This significantly increases the clarity and predictability of the total taxes due. Like in the current fiscal regime, taxable income from diamond trade implies that at least one director receives remuneration that is no lower than a certain threshold.