Tax rates for individuals are common for all, irrespective of their residential status. Income tax rates for assessment year 1394 (2015) are as follows:
| Annual Taxable Income (AFN) | Tax Rate |
|
0 to 60,000 |
0% |
|
60,001 to 150,000 |
2% |
|
150,001 to 1,200,000 |
1,800+10% of the amount excess over AFN 150,001 |
|
Over 1,200,001 |
1,06,800+20% of the amount excess over AFN 1,200,001 |
There is no provision for joint filing of the return of income. There is also no distinction amongst individuals, whether married, unmarried, or having children and the same tax rates apply to all.
An individual is said to be resident in Afghanistan in
any tax year if he/she:
has his or her principal home in Afghanistan at any time
during the fiscal year; or
Is present in Afghanistan in that tax year for a period
or periods totalling 183 days or more or
Is an employee or official of the Government of
Afghanistan irrespective of where he/she is performing
his duties of employment
In general, income from employment includes all compensation, in-cash or in-kind, which is due to or received by an employee in a tax year. Taxable compensation includes the following:
salary, wages, bonuses, allowances, and other cash compensation for services rendered in Afghanistan;
income tax paid by the employer on behalf of the employee; perquisites
Are there any areas of income that are exempt from taxation in Afghanistan? If so, please provide a general definition of these areas
Generally, the following items are not taxable:
meals up to USD 2 a day
transportation up to USD 1 a day
accommodation and meals (USD 35/- per in Kabul and USD 25 per day in other provinces) to expats only
living away from home allowance to employees away from ordinary residence
provision of relocation facility or reimbursement of relocation costs to employees away from ordinary residence provision of travel facility or re-imbursement of travel expense on commencement and cessation of employment to employees away from ordinary residence actual medical treatment or reimbursement of actual medical treatment incidental to commencement and cessation of employment to employees away from ordinary residence
Income from the transfer of a capital asset situated in Afghanistan is deemed to accrue in Afghanistan and as such taxable in Afghanistan. All individuals are liable for tax on capital gains arising from the transfer of capital assets in Afghanistan.
Dividend, interest, rent and royalty from investment held in Afghanistan is taxable in Afghanistan. The payment of such income is subject to withholding tax at the rate of 20%.
Benefits from Employees Stock Option Plan (ESOP) are taxed as perquisite in the hands of employees and are taxed at the time of exercising this option.
Afghanistan Income Tax Rates 2014 and Deductions
Afghanistan Income Tax Rate for Individual Tax Payers
Lowest Individual Tax Rate is 2% and Highest Rate is 20%
| Annual Taxable Income (AFN) | Tax Rate |
|
0 to 60,000 |
0% |
|
60,001 to 150,000 |
2% |
|
150,001 to 1,200,000 |
1,800+10% of the amount excess over AFN 150,001 |
|
Over 1,200,001 |
1,06,800+20% of the amount excess over AFN 1,200,001 |
All resident and non resident individuals are taxable in Afghanistan for Afghan-sourced income (for residents, this also includes foreign income) irrespective of whether they are paid in Afghanistan or outside Afghanistan Residential status is determined on the basis of the following factors.
The individual has their principal home in Afghanistan at any time during the tax year.
The individual is present in Afghanistan for a period or periods aggregating to 183 days in the tax year.
The individual is an employee or official of the Government of Afghanistan and has been assigned to perform services abroad at any time during the tax year.
The Sales Tax Rate in Afghanistan stands at 5 percent
In Afghanistan, the sales tax rate is a tax charged to consumers based on the purchase price of certain goods and services. The benchmark we use for the sales tax rate refers to the highest rate.
Natural persons who have business
income of AFN 3 million or more per year are subject to a 2%
business receipt tax (BRT). BRT is imposed on the total income
(gross receipts) received before any deductions. The following
exceptions apply:
Hotels, guest houses and restaurants that have total income of
more than AFN 3 million per year are subject to BRT at a rate of
5%.
All clubs and halls are subject to BRT at a rate of 5%.
Telecommunication, airline
services, hotels and restaurants providing premium services are
subject to BRT at a rate of 10%.
BRT paid is deductible in calculating taxable income.
All earned income in Afghanistan from capital gains is taxed the same as regular income.
Tax Identification Number.
All natural persons who are liable to pay tax or custom duties must have a Tax Identification Number (TIN).
A TIN can be obtained by requesting an application form from the MoF or a mustofiat office that has a TIN office located on the premises.
Income tax returns
The tax year in Afghanistan for all natural persons is from 21 December to 20 December.
All natural persons who are subject to income tax must file a
detailed tax return and balance sheet and submit it to the
relevant tax office by the end of the third month of the
following year (that is by 21 June of the following tax year).
Taxpayers who are subject to income tax, but are exempt from tax
under an international agreement or treaty, must file an income
tax return reflecting the effect of the exemption. The relevant
agreement or portion of the treaty must be attached to the tax
return together with an explanation as to why the agreement or
treaty applies.
All residents and non residents who intend to leave the country,
and who will be out of the country when their tax return is due
must prepare and file their tax return two weeks before
departing the country.
Tax payments
Taxpayers who are subject to fixed tax are required to pay their
tax quarterly by the 15th day of the month following the end of
each quarter.
The income tax (or any tax instead of income tax) on shows,
exhibitions, theaters, cinemas, concerts and sports must be paid
by the 15th day of the following month. If the shows are not
continuous, income tax must be paid after the end of each show.
Any income tax payable must be paid when the return is filed.