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Qatar, Bahrain, Oman, Saudi Arabia, Jordan, Egypt, Lebabon Middle East Tax laws and facts

Transcript of Me tax facts 2012


2. CONTENTSBAHRAIN3EGYPT11KUWAIT 21LEBANON31OMAN 34QATAR45SAUDI ARABIA 50U.A.E. 59 3. 3 BAHRAIN TAX FACTS 2012BDO Public Accountants10th & 11th FloorsGBCORP TowerBahrain Financial HarbourPO Box. 787Manama, Kingdom of BahrainTel: +973 17 530 077Fax: +973 17 530 088Email: [email protected] 4. Bahrain Tax Facts 2012 4CONTENTS05 Corporate Income Tax06 Personal Income Tax07 Social Insurance08 Withholding Tax09 Other Duties and Fees10 Bi-lateral Tax Treaties 5. Bahrain Tax Facts 2012 5 Corporate Income TaxCORPORATE TAXThere is no corporate taxation system in Bahrain with the exception of profits arisingfrom the extraction of petrochemical products.Corporate income tax on the profits of companies engaged in the exploration,production or refining of oil and gas in Bahrain is levied at a rate of 46%. Taxableincome for oil and gas companies is on net profits, which consist of business income lessbusiness expenses.FILING REQUIREMENTSOil and gas companies are required to file an estimated tax declaration on or before the15th day of the third month of the tax year. Tax must be paid in 12 monthlyinstallments.CARRY FORWARD LOSSESTaxable losses of oil and gas companies may be carried forward indefinitely. Carry backis not permitted. 6. Bahrain Tax Facts 2012 6 Personal Income TaxThere is no personal taxation system for income, capital gains, gifts or inheritances inBahrain and, furthermore, no requirements to file any form of tax return. 7. Bahrain Tax Facts 2012 7 Social Insurance and Other ContributionsSOCIAL INSURANCESocial insurance contributions are payable for Bahrainis at a rate of 18% of basic wagesof which 12% is the employers contribution and 6% is the employee contribution.Unemployment insurance at a rate of 1% is also payable by both Bahrainis andexpatriate employees. The base for the calculation of social insurance contributionscannot exceed BD 4,000 per month. In case the salary exceeds BD 4,000 per month, theamount of contribution will be calculated only on BD 4,000.EXPATRIATE EMPLOYEE MONTHLY FEEEach entity that is registered with the Labour Market Regulatory Authority (LMRA) isrequired to pay 10 Bahraini Dinars for every expatriate employee employed in Bahrain.Due to the current unrest in Bahrain, this fee has been waived by the LMRA until furthernotice.TRAINING LEVYOrganizations with 50 or more employees are liable to pay the training levy at a rate of4%. The base for the calculation of the training levy is the gross salary of expatriateemployees as registered with Social Insurance Organization, but limited to BD 4,000 permonth per employee. Training levy applies only on salaries paid to expatriates.END OF SERVICE BENEFITExpatriate employees at the completion of their employment contract are entitled to anend of service benefit which is calculated on the following basis: Fifteen days salary for every year of service for the first three years of continuous service; One months salary for every year of service thereafter.If an employee leaves the services of the employer within 3 years then no end of servicebenefit is payable to the employee. However if an employee leaves the services after 3years but less than 5 years, then the number of days entitlement is one-third of thetotal days calculated based on the above. However if the employer terminates theservices of an employee, then full end of service benefit is paid to him, irrespective ofthe number of years of employment with the employer.- 8. Bahrain Tax Facts 2012 8 Withholding TaxThere is no withholding of taxes on the repatriation of profits or dividends, royalties,license fees or group charges. However, if the investor operates in other countries inthe region, the withholding tax rules in those countries will need to be taken intoaccount in the regional business structure. 9. Bahrain Tax Facts 2012 9 Other Duties and FeesTOURISM LEVYPersons using hotel facilities are normally charged a government levy of 5% and a 15%service charge is generally added to the total bill amount.VALUE ADDED TAXBahrain has no value added tax.MUNICIPAL TAXMunicipal tax is payable by individuals or companies renting property in Bahrain. Therate of the tax varies according to the nature of the property, namely; unfurnished/furnished residential or commercial property. However this is generally 10% of themonthly rental.CUSTOM DUTYThere are no customs duties on trade in locally manufactured goods between GulfCooperation Council (GCC) countries (Bahrain, Kuwait, Qatar, Saudi Arabia, Oman andthe United Arab Emirates) where the local shareholding is at least 51% and value addedin goods produced exceeds 40%. On all other imports, custom duties are levied at a rateof 5%, with the exception of tobacco products (100%), liquor (125%) and duty free ofimports of vegetables, fruits, fresh and frozen fish, meat, books, magazine andcatalogues.LAND REGISTRATION TAXThere is a land registration fee payable to the government on the transfer of real estateproperty. The fee for Registration of Sales Agreement of property is as follows: From BD1 to BD70,000 - 1.5%, with Discount 1.25%* From BD70,000 to BD120,000 - 2%, with Discount 1.8%* From BD120,000 and above - 3%, with Discount 2.7%** Survey and Land Registration Bureau of the Kingdom of Bahrain offers a 10% discountcalculated on the total registration fees, if the registration process begins within twomonth from the execution of the Registration and Sales Agreement. 10. Bahrain Tax Facts 2012 10 Bi-lateral Tax TreatiesBahrain has signed treaties for the avoidance of double taxation with the followingcountries:Algeria, Austria, Belarus, Belgium, Brunei, Bulgaria, China, Egypt, France, Iran, Ireland,Jordan, Lebanon, Luxembourg, Malaysia, Morocco, Netherlands, Pakistan, Philippines,Singapore, Sudan, Syria, Thailand, Turkey, Uzbekistan, United Kingdom and Yemen.Note : Some of the above treaties are not yet in force.Bahrain has an inheritance tax treaty with France.In addition, a US-Bahrain Free Trade Agreement (FTA) has been entered into betweenthe two countries. This agreement gives customs duty exemption to all US industrialand agricultural products. Particulars of the Tariff Elimination as explained in the FTAare as follows:The Agreement provides for the elimination of all customs duties on originating goodsno later than 10 years following the entry of the FTA into force. The Agreement iscomprehensive and covers all tariff lines. When the FTA became effective, 96% ofBahrain industrial and agricultural products gained duty-free access to the United Statesmarkets. Tariffs on the remaining products, which are not currently produced inBahrain, have been phased-out according to the following staging categories:Category A: Immediate duty-free access (96% of industrial and agricultural products).Category B: Duties will be eliminated in 10 equal annual stages (1% of industrial andagricultural products).Category C: Goods that are already duty free and will continue to receive duty-freetreatment.Category D: Duties will be eliminated in 5 equal annual stages (3% of industrial andagricultural products).Bahrain is to provide immediate duty-free access on all US industrial and agriculturalproducts, except 80 products on which the duties will be phased-out over 10 years. 11. 11EGYPTTAX FACTS 2012BDO Egypt Consulting Ltd.1, Wadi El Nile St.,Mohandessin, GizaCairo. EgyptP.O.Box.: 110/12655Tel: +202 3303 0701Fax: +202 3303 12. Egypt Tax Facts 2012 12CONTENTS13 Corporate Income Tax15 Salary Tax17 Social Insurance18 Sales Tax19 Stamp Tax20 Withholding Tax 13. Egypt Tax Facts 2012 13Corporate Income TaxRATES OF CORPORATE TAXIn general, the standard rate of corporate tax is 20% applied to the companys taxable profits.Starting the fiscal year 2011, an additional tax rate had been imposed, being 25% on taxableprofits in excess of EGP 10 million.THE CORPORATE TAX YEARThe rate of corporate tax is fixed in respect of the corporate tax year or the financial year.The company has the right to choose the date of year-end to issue its annual financialstatements, regardless of the calendar year. Each year has to be accounted for separately. Thefirst year is to start from the date of incorporation to the end of the following financial year(long period).DEDUCTIBLE EXPENSESThe general rule is that only expenses that are wholly and exclusively incurred in earning theincome of the business are deductible. The cost and expenses have to be supported by properdocuments.ACCOUNTING METHODS AND BUSINESS PROFITSA companys taxable income is based on its accounting profits, computed according to theEgyptian Accounting Standards, which is, to a great extent, compliant with the InternationalFinancial Reporting Standards (IFRS).FILING REQUIREMENTSThe corporate tax return must be filed along with all supporting documents (e.g. Auditedfinancial statements), within four months from the accounting year end, e.g. 30 April, for 31December year end.CARRY FORWARD LOSSESLosses (on a year by year basis) are carried forward for deduction from subsequent profits forup to five years. 14. Egypt Tax Facts 2012 14 Corporate Income Tax ContinuedDIVIDENDSThere is no withholding tax on the payment of dividends, whether the recipient is resident ornon-resident.PAYMENT TO NON-RESIDENTSThe amounts paid to foreign entities against services rendered, are subject to withholding taxat a rate of 20%, even if it is paid to an entity that is resident of a country that has a doubletax treaty with Egypt. It is the overseas recipients responsibility to apply to the Egyptian TaxAuthority for refunding the balance between the 20% withheld taxes and the rates on royaltiesand interest, as per the treaty, should that exist. 15. Egypt Tax Facts 2012 15Salary TaxBASIS OF TAXATIONThe salary tax is the liability of the employee not the employer. However, the employer isresponsible to withhold and remit the salary tax on beha