Do you know which kinds of receipts are non-taxable?
Overview Generally, an amount included in your income is taxable unless it is specifically exempted by law. Taxable income must be reported on your return and is subject to tax. Nontaxable income may have to be shown on your tax return but is not taxable. Non-Taxable Income According to Article 14 of the Afghanistan Income […]
How much is the taxation percentage on retained earnings when the ownership is changed?
If your business is subject to Article 45 of Afghanistan’s Income Tax Law (Dividend Tax), and you have accumulated retained earnings by not paying dividends to shareholders/partners for several years, be aware of the following: A change in ownership can trigger a tax event. Afghan tax law may consider the accumulated retained earnings as a dividend payment […]
Did you know you can delay withholding tax payments until after you have paid the amount to vendors, landlords, and employees?
Introduction There are some occasions where organizations are unable to make the payment for their incurred expenses on-time or even not at all; these situations can be caused by a small cashflow shortage in finance department or a fatal bankruptcy altogether in the organization. If unpaid expenses, such as rent, salaries, and contractor payments, are […]
Should an NGO or a business withhold rent tax when they rent a governmental place?
Introduction The concept of rent withholding tax applies to payments made for the use of property, and it is typically a percentage of the gross rent paid for business purpose or office. Some organizations and companies lease government properties for the business purposes. Now the question is this whether the rent payment for a government […]
How to change an organization’s tax year in Afghanistan
Introduction International companies and NGOs operating in Afghanistan face unique challenges due to the country’s use of the Solar calendar (Hijri Shamsi) for tax purposes, which differs from the Gregorian calendar commonly used in most parts of the world. This discrepancy can complicate financial reporting and consolidation efforts. Understanding the Afghan Tax Year? According to […]
Is Stipend Taxable and How Is Tax Calculated on Stipend?
Introduction Many organizations hire interns, trainees or volunteers as required considering their operation and activities and pay them a fixed amount on a regular basis or as a one-time payment. The payment is typically made as a financial support to cover recipient’s basic costs associated with the work. For the organizations that pay stipends, the […]
How to obtain Taxpayer Activity Information System (TAIS) user for your NGO
Introduction: The Taxpayer Activity Information System (TAIS) is an electronic online platform developed by the Ministry of Finance’s revenue department to efficiently monitor contracts and manage tax withholdings. The TAIS is designed for use by both companies and NGOs but currently the government only requires NGOs to use online platforms. TAIS is meticulously designed to […]
What Steps Should an Organization Take to Clear a Monthly Withholding Tax Form With The Tax Office?
Introduction: As per the Afghanistan Income Tax Law, there are five types of the tax withholdings namely salary, contractor, rental, interest and dividend withholding taxes. Once a monthly withholding tax form is filed and the tax amount is transferred to the Ministry of Finance bank account, the following two steps should be taken in order […]
What is Tax Exemption Procedure and Required Documents for NGO?
Introduction: NGO are exempted from income tax and business receipt tax as per the Afghanistan Income Tax Law but these exemptions do not come automatically. Every NGO needs to apply and obtain a tax exemption confirmation letter as per Article 10 of the Afghanistan Income Tax Law. If the contributions and income received meet the following conditions, then […]
Tax Implications of the Provision of Mobile Top-Up Cards to Employees in Afghanistan
Phone top-up cards are a way for organizations to provide their employees with mobile phone credit or data access.Provision of top-up cards to employees have become a source of debate for many organizations in recent years, causing tax issues with authorities. The key distinction lies in how they are treated: In short, the tax treatment […]