This guide breaks down how tax income functions in Europa Universalis IV, covering everything from direct taxation and production income to overseas tariffs and efficiency modifiers. If you’re looking to understand how to grow your economy through taxation, this is the place to start.

🏛️ Direct Taxation

Each province in EU4 has a base tax value, which determines your income from that province. That value is then modified by various local and national modifiers.

Example: Porto

• Base tax: 10
• +1 from buildings (e.g., temples) → total = 11
• Modifiers:
  • +75% for being a core
  • +25% for being a city
  • +20% from a constable building
  • Total modifier: 120% (1.2x)
• Annual tax income = 11 × 1.2 = 13.2 ducats/year
• Monthly tax income = 13.2 ÷ 12 = 1.10 ducats/month

These numbers show up on your economy screen as monthly values, even though many modifiers are calculated annually.

⚙️ Production Income

Each province produces a trade good. Production income is calculated based on the goods produced value and production efficiency. This income stacks with tax income in non-overseas provinces.

🌍 Tariffs (Overseas Income)

Tariffs replace direct tax and production income in distant overseas provinces (those not on the same continent as your capital).

• Instead of full tax/production income, you earn tariffs.
• Tariff value is based on:
  • Trade value of goods produced
  • A reduced percentage of base tax
  • Usually only 10–15% of the original value due to overseas penalty

Tariffs are further modified by ideas, policies, and colonial modifiers.

🚫 Overseas Penalties

A province is considered “overseas” if it:

• Is not on the same continent as your capital
• Does not have a land connection to your capital

Effects:

• -90% tax and production penalties
• Cannot be used as core economic powerhouses
• Still generate income via tariffs instead

📜 Modifiers and National Decisions

Some policies, ideas, and decisions impact tax income across your nation:

• Example: Formalized Scales, Weights, and Measures
  • +5% national tax modifier
  • Affects total national tax income, not per-province modifiers

This means:

• A country making 100 ducats/year from tax would now make 105 ducats/year

💡 Optimization Tips

To boost your tax income effectively:

• Core your provinces for better tax efficiency
• Build temples and constables in high-tax provinces
• Focus development on tax in inland, non-overseas areas
• Use national decisions and policies that increase tax or production modifiers
• Manage overseas provinces for tariffs, not raw tax/production

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