Afghanistan tax guide 20162017 the afghanistan pkf tax guide provides details about tax within afghanistan and contact details for local tax specialists in local pkf firms who will be able to provide taxation advice to help your business. Afghanistan income tax law ministry of finance afghanistan. The purpose of this income tax manual is to provide additional guidance to the afghanistan revenue department and others regarding the interpretation and application of the income tax law 2009. The corporate income tax cit rate in afghanistan is 20% of the taxable income in a fiscal year. Afghanistan income tax law consolidation to 31 march 2005 a translation of the income tax act 1965 as published in gazette number 25 of 1965 and as amended to date.
Taxing government contractors in afghanistan law360. The income tax law of 2005 amended the pretaliban tax system and consolidated all changes into a single law. Rules on the income tax act of the kingdom of bhutan, 2001 page i royal government of bhutan ministry of finance tashichhodzong foreword the ministry of finance is pleased to bring out 4th edition of the rules on the income. No matter what kind of legal form the company has, all of them are required to pay a corporate tax of 20 percent. The income tax law 2009 has changed some of the applications of the wage. Index of afghanistan laws united states agency for. Amendment to foreign citizens stay in afghanistan english. Afghanistan income tax rate for 2017, 2016, 2015, 2014, 20. Organizing principles of tax administration law it is a frequently heard complaint that tax administration laws are complex, confusing, and arbitrary. Afghanistan revenue department tax offices and mustufiats. In the longterm, the afghanistan personal income tax rate is projected to trend around 20. Rules on the income tax act of the kingdom of bhutan. The manual discusses separately each article of the law, along with.
Mar 23, 2017 4 alternative business receipts tax rates range from two to ten per cent for certain specified industries. The presentation addressed recent legislative changes, including the law on taxation affairs administration, coming legislative changes, including the draft income tax law and the value added tax law, and various implementation. Information and resources related to possible exemptions. Afghan tax summary quest financial services april 2017.
Amongst other changes, the tax law implemented a requirement to withhold from. Income tax law of afghanistan version 7 april 2005 page 18 article 53 1 in the event of any conflict between contracts, agreements and provisions of other laws with the income tax law, the provisions of the income tax law shall prevail. Afghanistans income tax law provides tax exemptions related to those grants. If a resident person has taxable income in afghanistan from nonafghan sources and has paid the overseas tax for it, this person can offset the.
Afghan tax summary quest financial services april 2017 2. On august 22nd, rls, in cooperation with the american chamber of commerce in afghanistan, hosted a presentation on recent developments in afghanistans tax law. The longterm goals of the ministry are efficient management of natural resources creating job opportunities development of national economy, and encouragement of private sector investments in minerals and hydrocarbons extraction to maximize the income and reinforce the national revenue. Tax law w 2004 amendments afghanistan income tax law consolidated to 27 march 2005 a translation of the income tax act 1965 as published in gazette number 25 of 1965 and as amended to date. This notice cannot substitute for specific registration or tax advice. This difficult task is compounded by the reality that many of the foreign private firms operating in afghanistan are considered taxexempt under u. This law has been enacted under the authority of article 42 of the constitution of afghanistan for the purpose of tax determination and its payment. If you are a contractor and want a calculation on your tax and net retention in afghanistan, we can supply it to you free of charge. An unofficial translation of the income tax law 2005 as published in official gazette number 867.
Afghanistan has a small formal financial services sector and domestic credit remains tight. Unless the context requires otherwise, a reference to a taxpayer should be taken to include a. Legal persons and natural persons individuals with two 2 or more employees during any month. Tax is a compulsory payment collected from natural and legal persons in accordance with the. Income tax law of afghanistan taxable income income tax from l afghani up to afs 12,500 per month exempted. The first modern income tax law applying to companies and individuals came into effect in 2005. Contributions received and income from the necessary opera tions of organizations that meet the qualifications and conditions stated in this article are exempt from taxation under this law. Version 7 april 2005 afghanistan income tax law consolidation to 31 march 2005 a translation of the income tax act 1965 as published in gazette read more. However, not all types of taxes and related penalties are included in this guide. Version 7 april 2005 afghanistan income tax law consolidation to 31 march 2005 a translation of the income tax act 1965 as published in gazette read more president karzai signs into law bill expanding associational rights in afghanistan. A translation of the income tax act 1965 as published in gazette. Afghanistan income tax law article 11 organizations which are exempt from taxation. The main source of income in the country is agriculture, and during its good years, afghanistan produces enough food and food products to provide for the people, as well as to create a. Tax rates online an online rates tool produced by kpmg that compares corporate, indirect, individual income and social security tax rates within a country or across multiple countries.
The word taxpayer is used throughout this document. The qualifications that must be met are the following. Personal income tax rate in afghanistan is expected to reach 20. Income tax law chapter one general provisions basis article 1. This brochure will explain those changes and help you in complying with the law. Aug 24, 2016 on august 22nd, rls, in cooperation with the american chamber of commerce in afghanistan, hosted a presentation on recent developments in afghanistans tax law. All partnerships, organizations, agencies, departments, and enterprises of the state and municipalities. That, you can find in the 4th article of the afghan income tax law. Income tax law 2009, article 66 as amended by presidential decrees nos. This is not an official translation and has no binding force. Tax administration law the meaning is wider than the taxation administration. The phrase in paragraph 5 of article 2 of the income tax law no. This consolidation has been prepared by the general presidency of revenue, ministry of finance. Afghanistan personal income tax rate tax year 94 2015 tax rates for individuals are common for all, irrespective of their residential status.
Afghanistan is one of the worlds poorest countries. Income tax for assessed income resources with regard to individuals detailed in article 2 are suspended from january 1st 2003 until april 30, 2004. All businesses irrespective of the legal status of the organization are subject to 20% tax on income under article 4 of the income tax law in afghanistan. If the foreign corporation or llc is doing business in afghanistan, its income from such business is taxable in afghanistan. Learn more about the afghanistan economy, including the population of afghanistan, gdp, facts, trade, business, inflation and other data and analysis on its. Afghanistan personal income tax rate 20042019 data. Valueadded tax vat in 2014 the parliament of afghanistan worked close to international monetary fund to raise the domestic revenues and therefor added a value. Ey global tax guides detailed guides produced and updated annually by ey, summarising the tax system and key tax issues in jurisdictions around the world, including.
Afghanistan pkf assurance, audit, tax, advisory and. Income from nonafghan or foreign sources of residents of afghanistan in accordance with the provisions of the income tax law. Pregazettal version a consolidated version of the law which incorporates amendments to the law pursuant to the income tax amendment decree. The information and links to resources in this notice provide only general guidance. Learn more about the afghanistan economy, including the population of afghanistan, gdp, facts, trade, business, inflation and other data and analysis on its economy from the index of economic. Notice the exemption and the special exemption for spouses has been revised see page 39. There shall be a deduction for insurance premiums paid in respect of the wife who has taxable income and the minor children who have taxable income in case of income aggregation of the wife or minor children with. Chapter 4, law of tax administration and procedure 2 i. This income tax manual is issued under the authority granted to the ministry of finance by article 1082 of the income tax law 2009.
It is 3 years under graduation course that provides you wide career opportunities in accounts, commerce, management fields. This difficult task is compounded by the reality that many of the foreign private firms operating in afghanistan are considered tax exempt under u. Many years of war and political instability have left the country in ruins, and dependent on foreign aid. Income tax in afghanistan can range from 0 to 20% percent, and you need to be sure you are placed in the correct tax brackets. The presentation addressed recent legislative changes, including the law on taxation affairs administration, coming legislative changes, including the draft income tax law and the value. Every natural person who is a resident of afghanistan is subject to the. Afghanistan income tax law 2009 an unofficial translation of the income tax law 2009 as published in official gazette number 976 dated 18th march 2009 this translation has been prepared by the afghanistan revenue department, ministry of finance. This report was prepared by tobias haque with habiburahman sahibzada, saurabh shome, bernard haven, and taehyun lee. Afghanistan personal income tax rate 20042019 data 2020. As a dod civilian deployed to afghanistan am i eligible to get any of the taxes i paid throughout the year back. An unofficial translation of the income tax law 2009 as published in official gazette number 976 dated 18th march. Afghanistan tax law presentation rosenstock legal services. Article 10 of the income tax law restricts exempt organization status to those organizations organized and operated exclusively for educational, cultural, literary, scientific, or charitable purposes.
The afghanistan development update is intended for a wide audience, including policy makers, the donor community, the private sector, and the community of analysts and professionals engaged in afghanistans economy. Accountancy, cost account, statistics, economics, and law are the main subjects. Business receipt tax brt is also applicable on gross revenue of business at rates given below. If your employees have questions regarding the wage withholding specifically, or income tax filing in general. Tax law w 2004 amendments afghanistan income tax law. Nonprofit law in afghanistan council on foundations. Brt is treated as an admissible expense and is deducted from revenue. The income tax law of 2009 simplifies the definition of the fixed tax, a type of levy on persons and small businesses not subject to the cit and the brt. Law on foreign citizens stay in afghanistan dari 2. In other tax laws the income tax law and the vat law the meaning will depend on the context within that law. Article 72 of the afghanistan income tax law of 2009 states that for contractors with a business license this tax is in lieu of income. The afghan istan income tax law 2009, income tax manual 2010, tax administration law 2015, and other official documents should be consulted gain a comprehensive understanding of the to tax law. Challenges to business in afghanistan center around a stilldeveloping legal environment, security, varying interpretations of tax law, and the impact of corruption on administration. A recent study1 found paraguays tax effort2 to be on par with other.
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