Tax Handbook 2018

Middle East tax
handbook 2018
Expanding perspectives
and possibilities
Deloitte | ME tax handbook 2018
Contents
ForewordbyNaumanAhmed 04
Bahrain 06
Egypt 12
Iraq 26
Jordan 36
Kuwait 44
Lebanon 54
Libya 64
Oman 72
PalestinianRuledTerritories 82
Qatar 92
SaudiArabia 102
Syria 114
UnitedArabEmirates(UAE) 122
Yemen 130
DeloitteInternationalTax 140
Source(DITS)
Servicelineleaders 142
YourDeloitteMiddleEastTax 143
contacts
SummaryofDeloitteTax 146
services
03
Foreword
Iampleasedtopresentthe2018editionoftheDeloitte
MiddleEastTaxHandbook–acomprehensiveguideto
helpyoukeepabreastofregionaltaxratesandregimes.
Changeistheoneconstant.Moreoftenthannotchangeis
challenging,andthewayinwhichweaddressitaswellas
howpreparedwearetotakeitonarekeydefiningfactors
thatimpacttheendoutcomeofwhatcomesourway.In
today’sglobaltaxenvironmentandthefastshiftingreality
intheMiddleEast,itisimportanttobeabletoleadthrough
uncertainty.
TheDeloitteMiddleEastTaxpracticeiscommittedto
providingbusinesseswiththeclarity,connectionand
confidencethattheyneedinordertonavigatetheever-
evolvinglandscape.Changesinregulationandtaxreform
continuetobeontheincreaseintheMiddleEast,andinclude
theimplementationofavalueaddedtax(VAT)regimethat
commencedintheKingdomofSaudiArabia(KSA)andUnited
ArabEmirates(UAE)onJanuary1,2018with5%VATapplying
onthesaleandpurchaseofmostgoodsandservices.This
hasrepresentedamajortransformationforboththe
governmentandconsumers.Asatransactionaltax,the
introductionofVATposedarealchallengeforKSAandUAE
businesses,especiallywiththesignificantimpactithadacross
theirentireoperations.Inaddition,nowthatVATishere,
thereisnooptionbuttobecompliant,asfailingtodoso
posesbothregulatoryandreputationalrisksduetothe
impositionofVATpenalties.
Duringtheensuingperioditisanticipatedthattheremaining
fourGulfCorporationCouncil(GCC)memberstateswilleach
proceedwiththeirrespectiveplans,anddomesticlaws,to
implementaVATinaccordancewiththeTreatyby2019.The
existenceoftheTreatyasacoresetofprincipalsprovides
GCCbusinesseswithenoughdirectiontocommencetheir
implementationeventhoughtherespectivedomesticVAT
lawsarenot,attimeofwriting,yetavailable.GCCbusiness
04
executiveteamsshouldalsoneedtoworkcloselywiththeir
technologypartnerstoagreeandimplementtherightVAT
technologyarchitecture,especiallythatbuildingahigh
performingtaxfunctioniscriticaltotaxtransformation
success.Effectiveuseoftechnology,includingdata
managementandanalytics,isintegraltothis.Inthisregard,
Deloitte'staxtechnologistsbringawealthoftechnologyand
taxknowledge,andadisciplinedapproach,tocreateadded
value.
Inaddition,withtheissuanceofthefinalrecommendations
oftheOrganizationforEconomicCo-operationand
Development(OECD)onthe15BaseErosionandProfit
Shifting(BEPS)actionitems,theimportanceoftransfer
pricinghasfurtherincreasedasitdominatestheBEPS
agendafortaxpayersandtaxauthoritiesacrosstheworld.
Followingtheglobaltrend,manycountriesacrossthe
MiddleEasthavealsocommittedtointroduceBEPS
recommendationsindomesticlegislation,whichislikelyto
furthersharpenthefocusontransferpricingintheregion.
In2018,transferpricingshouldbeatthetopoftheagenda
foralltaxexecutives.
Weareatatimewheneverythingdefiningtheglobaland
localtaxlandscapeofthepastisshiftingandyieldinga
fundamentallydifferentfuture–compoundedbyincreased
scrutinyfromrevenueauthoritiesandthemedia.This
intensifiesthespotlightontaxleadersandprofessionals.
Wewanttogainadeeperunderstandingofchallenging
issuesfacingyourbusinessandwanttohelpyoutobe
confidentandembraceinnovation,leadinginthemidstof
uncertainty.Thisishowwewillfindmoreefficientwaysto
meettheever-expandingneedsoftoday,tackletomorrow’s
challenges,andaddvalue.
Nauman Ahmed
Middle East Tax Leader
05
Deloitte | ME tax handbook 2018 | Bahrain
Bahrain
Investment basics
Currency BahrainiDinar(BHD)
Foreign exchange control No
Accounting principles/financial statements

IFRS.Financialstatementsmustbefiledannually.
Principal business entities

ThesearetheWithlimitedliabilitycompany(WLL)andsingle
personcompany(SPC).Otherlegalformsincludeabranch
ofaforeigncompany,partnership,“simplecommandite”
companyandholdingcompany.Theminimumcapital
requirementsintheCommercialCompaniesLawhavebeen
reducedforshareholdersofaWLLandSPC.
Corporate taxation
Residence
Residenceisnotdefined.Acompanyengagedinoil,gasor
petroleumactivitiesistaxed,regardlessofwherethe
companyisincorporated.
Basis
ThereisnocorporatetaxformostcompaniesinBahrain,but
corporateincometaxisleviedontheprofitsofoil,gasand
petroleumcompaniesengagedinexploration,production
andrefining.
Taxable income
Oil,gasandpetroleumcompaniesareassessedforcorporate
incometaxontheirnetprofits,calculatedasbusinessincome
lessbusinessexpenses.
Taxation of dividends No
06
Capital gains No
Losses
Lossesmaybecarriedforwardindefinitely.Thecarrybackof
lossesisnotpermitted.
Rate
Ataxrateof46%isleviedonnetprofits(taxableincome)of
oil,gasandpetroleumcompaniesengagedinexploration,
extraction,productionandrefining.
Surtax No
Alternative minimum tax No
Foreign tax credit No
Participation exemption No
Holding company regime No
Incentives No
Withholding tax
Dividends No
Interest No
Royalties No
Technical service fee No
Branch remittance tax No
07
Other taxes on corporations

Capital duty No
Payroll tax No
Real property tax No
Social security
ForBahrainiemployees,theemployer'ssocialinsurance
contributionis12%,whichcoversoldage,disability,death
andunemployment.Forexpatriateemployees,the
employer'ssocialinsurancecontributionis3%,whichcovers
employmentinjuries.Themaximummonthlyearningssubject
tocontributionsarecappedatBHD4,000.
Expatriateworkersareentitledupontheterminationoftheir
contracttoapaymentequivalenttoonehalfofonemonth’s
wagesforeachyearofserviceforthefirstthreeyearsandto
onemonth’swagesforeachsubsequentyear,pro-ratedfor
partyears.
Stamp duty
Stampdutyisleviedontransfersand/orregistrationofreal
estateatarateof2%ofthepropertyvalue.Therateis
discountedto1.7%ifthedutyispaidwithin60daysfollowing
thetransactiondate.
Transfer tax No
Other
A10%levyisimposedonthegrossturnoverofhotelsand
firstgraderestaurants.Typically,thechargeispassedonby
hotelsandrestaurantstocustomersviatheirbills.
A10%municipalitytaxisleviedontherentalofcommercial
propertyandresidentialpropertyoccupiedbyexpatriates.
08
Anti-avoidance rules
Transfer pricing No
Thin capitalization No
Controlled foreign companies No
Disclosure requirements No
Compliance for corporations

Tax year
Calendaryearortheyearspecifiedinthecompany’sarticles
ofassociation.
Consolidated returns No
Filing requirements
Oilcompaniesarerequiredtofileanestimatedincometax
declarationonorbeforethe15thdayofthethirdmonth
ofthetaxyear.Taxmustbepaidin12equalmonthly
installments,withthefirstinstallmentpayableonthe15th
dayofthefourthmonthofthetaxyear.
Penalties
Apenaltyof1%ofthetaxliabilityisdueforeach30days
thatthereturnorpaymentoftaxisoutstanding.
Rulings No
Personal taxation
Basis No
Residence No
Filing status No
09
Taxable income No
Capital gains No
Deductions and allowances No
Rates No
Other taxes on individuals

Capital duty No
Stamp duty
Stampdutyisleviedonpropertytransfersonthebasisofthe
valueoftheproperty.
Capital acquisitions tax No
Inheritance/estate tax No
Net wealth/net worth tax No
Social security
Bahrainiemployeesarerequiredtomakea7%contribution,
whichcoversoldage,disability,deathandunemployment.
Forexpatriateemployees,theemployee'scontributionis1%,
whichcoversonlyunemployment.Themaximummonthly
earningssubjecttocontributionsarecappedatBHD4,000.
Other
Excisetaxof100%ontobaccoproductsandenergydrinks,
and50%onsoftdrinksappliesasofDecember30,2017.
Compliance for individuals

Tax year Calendaryear
10
Filing and payment

Theemployerremitssocialsecuritycontributions(both
employerandemployeeportions)monthly.
Penalties
PenaltiesofbetweenBHD100andBHD500applyforfailure
toprovideincomeinformationandmaybedoubledfor
repeatedfailures.
Value added tax

Taxable transactions
BahraincurrentlydoesnothaveVAT,goodsandservices
taxorsalestax.However,inlinewiththeGulfCooperation
CouncilVATAgreement,VATisexpectedtocomeintoforceas
ofOctober1,2018atastandardrateof5%andaregistration
thresholdofapproximatelyUSD100,000.
Rates
See“Taxabletransactions”above.
Registration, filing and payment

See“Taxabletransactions”above.
Source of tax law

BahrainIncomeTaxLaw(AmiriDecree22/1979).
Tax treaties
Bahrainhasconcluded40taxtreaties.
Tax authorities
MinistryofFinance
Deloitte contact
Maxim Chaplygin Michael Camburn
Partner, Tax Partner, Indirect Tax
mchaplygin@deloitte.com mcamburn@deloitte.com
11
Deloitte | ME tax handbook 2018 | Egypt
Egypt
Investment basics
Currency EgyptianPound(EGP)
Foreign exchange control

FollowingthefloatationoftheEGPonNovember3,2016,the
centralbankrelaxedsomerestrictionsontheexportof
capitalandtherepatriationoffunds.Followingadecree
issuedbythecentralbankonNovember28,2017,the
previouslimitsonforeigncurrencytransactionshavebeen
abolished.

Corporatetaxableprofitsarecalculatedprimarilyaccording
toEgyptianAccountingStandardsandadjustedbyspecific
provisionsbasedonthetaxlaw.

Theseincludethejointstockcompany,limitedliability
company,partnershiplimitedbyshares,limitedandunlimited
partnership,branchandrepresentativeofficeofaforeign
company,andthesingleownerlimitedliabilitycompany.
Corporate taxation
Residence
AcompanyisdeemedtobetaxresidentinEgyptifitis
establishedaccordingtoEgyptianlaw,ifitsmainoractual
centerofmanagementisinEgyptorifthegovernmentor
apublicjuridicalpersonownsmorethan50%ofitscapital.
Basis
Residentcompaniesaretaxedontheirworldwideincome;
nonresidentcompaniesaretaxedonlyonEgyptian-source
income.
Taxable income
Corporatetaxisimposedonthetotalprofitsofacompany
afterdeductingthenecessaryandrelevantexpensesincurred
12
inderivingtheprofits(the“taxpool”).Statutorypaymentsto
employeesunderprofit-sharingrulesmaynotbededucted
forcorporateincometaxpurposesandarenotsubjecttothe
salarytax.
Taxation of dividends
Undera“dividendexemption”(DIVEX)mechanism,90%of
thedividendsreceivedbyaresidentparentcompanyfrom
anotherentity(whetherornotresidentinEgypt)areexempt
fromcorporatetax.Themechanismapplieswherethe
Egyptianresidentparentcompanyholdsatleast25%ofthe
sharesofthesubsidiaryforatleasttwoyearsbeforethe
distributionor,iftheholdingperiodisnotmetatthetimeof
thedistribution,theparentcommitstoholdthesharesinthe
subsidiaryfortwoyears.Iftheownershipislessthan25%,
thedividendsareexcludedfromthetaxpooltogetherwith
relatedcosts,basedonaformulaspecifiedinthelaw.
Forresidentparentcompaniesreceivingdividendsfrom
residentsubsidiariesthatqualifyfortheDIVEXmechanism,
theeffectivetaxondividendsis22.5%on10%ofthe
dividend,inadditiontothe5%withheldatsourcebythe
subsidiary(effectiverateof7.25%).
Capital gains
Capitalgainsderivedbyaresidentornonresidentcompany
fromthesaleofshareslistedontheEgyptianstockexchange
aresubjecttoareduced10%corporateincometaxratein
aseparateincometaxpool.However,thistaxhasbeen
“suspended”(i.e.anexemptionisgranted)untilMay17,2020;
the10%taxwillapplyonresidentandnonresidentsellers
subsequenttothatdate(subjecttotheprovisionsofan
applicabletaxtreaty).
Capitalgainsderivedbyaresidentoranonresidententity
fromthedisposalofunlistedsharesinEgyptiancompanies
13
areincludedintaxableincomeandtaxedatthestandard
corporatetaxrate.
Losses
Lossesmaybecarriedforwardforfiveyears(threeyearsfor
lossesincurredonthetradingofshares).Thecarrybackof
lossesisnotpermitted,exceptforlossesincurredbya
constructioncompanyonlong-termcontracts.
Rate
Thestandardcorporatetaxrateis22.5%.Companies
engagedintheexplorationandproductionofoilandgasare
taxedatarateof40.55%.
Surtax No
Foreign tax credit

ForeigntaxespaidoverseasmaybedeductedfromEgyptian
incometaxpayable,butthedeductionmaynotexceedthe
totaltaxpayableinEgypt.
Participation exemption
Seeunder“Taxationofdividends”and“Capitalgains.”
Incentives
Projectsestablishedunderthefreezonesystemarenot
subjecttotaxordutiesinEgypt.
Theinvestmentlawprovidesinvestmentprojectsthatare
establishedafterMay31,2017withfiscalincentivesinthe
formofareductionofthenettaxableprofits(adeduction
equalto50%ofthe“investmentcosts”forinvestments
14
madeingeographiclocationsmosturgentlyinneedof
development(designatedasSectorA),and30%ofthe
investmentcostsforprojectsestablishedinSectorB(allareas
notdesignatedasSectorA)).Thedeductionmaybeutilized
overamaximumperiodofsevenyearsfromthedateactivity
commences,andiscappedat80%ofthepaid-upcapitalat
thedateactivitycommences.
Withholding tax
Dividends
Dividendspaidtoaresidentoranonresidententityare
subjecttoa10%withholdingtax.Therateisreducedto5%
wherethecorporaterecipientholdsatleast25%ofthe
capitalorvotingrightsinthepayercompanyforatleasttwo
years.Incross-bordersituations,theratemaybefurther
reducedunderanapplicabletaxtreaty.
Interest
Interestpaidtoanonresidentissubjecttoa20%withholding
tax,unlesstherateisreducedunderanapplicabletaxtreaty.
Taxoninterestiswithheldatthedomesticrateandthe
recipientmustapplyforarefundtobenefitfromareduced
withholdingtaxrateunderatreaty,unlessanadvanceruling
isobtained.Interestpaidtoanonresidentonalong-term
loan(i.e.aloanwithatermofatleastthreeyears)isnot
subjecttowithholdingtax.
Royalties
Royaltypaymentsmadetoanonresidentaresubjecttoa
20%withholdingtax,unlesstherateisreducedunderan
applicabletaxtreaty.Taxonroyaltiesiswithheldatthe
domesticrateandtherecipientmustapplyforarefundto
benefitfromareducedwithholdingtaxrateunderatreaty,
unlessanadvancerulingisobtained.
15
Technical service fees

Outboundpaymentsfor“services”trigger,inprinciple,a20%
withholdingtaxunlessotherwiseprovidedinanapplicable
taxtreaty.ItiscommonfortheEgyptiantaxauthoritiesto
reclassifyservicepaymentsthataresuspectedtoincludea
righttouse“experience,”andapplythewithholdingtax
treatmentapplicabletoroyalties.
Branch remittance tax

Profitsrealizedbyabranchorpermanentestablishmentof
aforeigncompanyaredeemedtobedistributedtothehead
officewithin60daysfromtheyear-endandaresubjecttothe
5%dividendwithholdingtax,subjecttotheprovisionsofan
applicabletaxtreaty.

Capital duty No
Payroll tax No
Real property tax

MostrealpropertyinEgyptissubjecttoarealestatetax.
A10%rateappliesontheannualrentalvalueafterallowing
a32%deductiontocoverrelatedcostsfornonresidential
property,anda30%deductionforresidentialproperty.
Exemptionsareprovidedfornonresidentialpropertythatis
usedforcommercial,industrialandadministrativepurposes
withanannualrentalvalueoflessthanEGP1,200,andfor
residentialunitswithanannualrentalvalueoflessthanEGP
24,000.Theuserofthepropertypaysthetax,whichisdue
intwoinstallments.Theannualrentalvalueofrealestateis
assessedeveryfiveyears.
Social security
Thesocialsecurityregimeappliesonlytolocalnationals,
unlessasocialsecurityagreementwithanothercountry
applies.
16
Stamp duty
Stampdutyischargedatvariableandfixedrates:0.1%per
quarterforbankingtransactions;20%oncommercial
advertisements;andratesrangingfrom1.08%to10.08%on
insurancepremiums.
Anew“StampTax/Duty”regimeappliestothetotalvalueof
tradinginsecurities(i.e.Egyptianorforeignsecurities,listed
orunlisted),excludingpublictreasurybills(“T-bills”)and
bonds,withoutanydeductionallowedforexpenses.Thetax
isimposedonboththebuyerandtheseller,ata0.125%rate
fromJune20,2017untilMay31,2018,a0.15%ratefrom
June1,2018untilMay31,2019anda0.175%ratefromJune
1,2019.Howevera0.3%rateappliestoboththebuyerand
theseller,withoutanydeductionallowedforexpenses,inthe
caseof:(1)asaleoracquisitionof33%ormoreoftheshares
orvotingrightsofaresidentcompany,whetherintermsof
numberorvalue;or(2)asaleoracquisitionof33%ormore
oftheassetsorliabilitiesofaresidentcompanybyanother
residentcompany,inexchangeforsharesintheacquiring
company.Ifmultipletransactionsconductedbyonelegal
personrelatedtoacompanyresultinexceedingthe33%
limitaboveduringthetwoyearsfollowingthefirst
transaction,thesellerandbuyeraresubjecttoa0.3%rate
onthetotalamountofthetransactions,withtherightto
offsetanystampdutyalreadypaidonsuchtransactions.
Transfer tax No
Transfer pricing
Relatedpartytransactionsmustbeconductedonarm’s
lengthterms.Transferpricingrulesapplytotheexchange
ofgoods,servicesandthelicensingofintangibles(brand,
technologyetc.),aswellastoloans(financing,guaranteefees,
cashpoolingagreements,etc.).Fivetransferpricingmethods
17
arespecified:thecomparableuncontrolledprice,resaleprice,
totalcostplusprofitmargin,profitsplitandtransactionalnet
marginmethods,withprioritygiventothecomparable
uncontrolledpricemethod.However,iftheinformation
neededtoapplythismethodisunavailable,theother
methodsareusedinahierarchicalorder.Thetransferpricing
rulesrecommendthattaxpayersfollowafour-stepapproach
todemonstratethattheircontrolledtransactionsarein
accordancewiththearm’slengthprinciple.
Egyptiantaxpayersareexpectedtoprepareannualtransfer
pricingdocumentation.
Advancepricingagreements(APAs)areallowedunder
Egyptiantaxlaw.
Thin capitalization
A4:1debt-to-equityratioapplies.Thetaxdeductionforany
interestondebtexceedingthisratioisdisallowed.Inaddition,
thedeductionisdisallowedforinterestpaidthatexceeds
twicethecreditanddiscountrate(announcedbythecentral
bankatthebeginningofeachcalendaryear).
Theinterestrateonloansbetweenrelatedpartiesmustbe
onarm’slengthtermsandsupportedbytransferpricing
documentation.
Controlled foreign companies

Incomefrominvestmentsinnonresidentcompaniesis
recognizedundertheequitymethodofrevenuerecognition
andistaxedinEgyptif:(1)theEgyptianentityownsmore
than10%ofthenonresidentcompany;(2)morethan70%of
thenonresidentcompany’sincomeisderivedfromdividends,
interest,royalties,managementfeesorrentalfees(i.e.
“passiveincome”);and(3)theprofitsofthenonresident
companyarenotsubjecttotaxinitscountryofresidence,
18
areexemptoraresubjecttoataxrateoflessthan75%of
thecorporatetaxrateapplicableinEgypt.
Other
Ageneralanti-avoidanceruleapplies,underwhich,ifanyof
theprincipalpurposesofatransactionistaxavoidanceortax
deferral,ataxauditmayadjustthetransaction’staxeffects
andsubjecttheeconomicsubstanceofthetransactiontotax.

Tax year Accountingyear
Consolidated returns
Consolidatedreturnsarenotpermitted;eachcompanymust
fileaseparatereturn.
Filing requirements
Companiesmustfileataxreturnwithinfourmonthsfollowing
theendofthefinancialyear.Taxisassessedonthebasisof
theinformationprovidedinthetaxreturn.
Penalties
Variouspenaltiesapplyforfailuretoapplythesystemof
withholding,collectionandremittanceoftax;failuretofile
areturn;andotheroffenses.
Interestiscalculatedat2%abovetheannualcreditand
discountrateannouncedbythecentralbank.
Iftheamountsincludedinthetaxreturnarelessthanthe
finalassessedtaxamount,anadditionalpenaltymaybe
imposedbasedonthedifferencebetweentheamounts
includedinthereturnandthoseintheassessment.Therate
is5%ifthedifferencerangesfrom10%-20%;15%ifthe
19
differenceisabove20%andupto50%;and40%ifthe
differenceexceeds50%.
Rulings
Taxpayersmayapplyforanadvancerulingbysubmittinga
writtenrequestandcopiesofrelevantdocumentstothe
Egyptiantaxauthorities.Thetaxauthoritieswillissueadecision
ontherequestwithin60days.
Personal taxation
Basis
Aresidentindividualistaxableonhis/herworldwideincome
ifEgyptisthe“centerofhis/hercommercialinterests.”A
nonresidentindividualistaxedonlyonhis/herEgyptian-
sourceincome.
Residence
Anindividualisresidentifhe/sheispresentinEgyptformore
than183daysinafiscalyear;isdeemedtohaveapermanent
abodeinEgypt;orisanEgyptiannationalperforminghis/her
workdutiesabroadbutbeingpaidforthesedutiesfroman
Egyptiansource.
Filing status
Eachindividualmustfileanannualreturn.Spousesarenot
permittedtofileajointreturn.
Taxable income
Taxableincomeincludesincomefromemployment,income
fromcommercialorindustrialactivitiesandincomefrom
noncommercialactivities(i.e.professionalservices).
Mandatoryprofitsharing,pensionsandend-of-service
bonusesarenotsubjecttosalarytax.
Capital gains
Capitalgainsrealizedbyaresidentornonresidentindividual
onthesaleoflistedsharesofEgyptiancompaniesaresubject
20
toa10%incometaxrateinaseparateincometaxpool.
However,thistaxhasbeentemporarilysuspendeduntil
May17,2020.
Capitalgainsrealizedonthesaleofunlistedsharesof
Egyptiancompaniesbyresidentornonresidentindividuals
aresubjecttoprogressivetaxratesupto22.5%.
Incomederivedfromthesaleofassetsinasole
proprietorshipbecomespartofanindividual’staxablebase
(includingthesaleofasoleproprietorship’srealestate).If
ownedasapersonalassetandnotclassifiedassole
proprietorshipassets,realestatesalesaresubjecttoa
separate2.5%taxonthegrossproceeds.
Deductions and allowances

Availabledeductionsdependonthetypeofincome.Various
allowancesareavailableforitemssuchassocialsecurity
contributionsandhealthinsurancepremiums.
Rates
Progressiveratesupto22.5%areleviedonalltypesof
incomederivedbyindividuals(includingincomefrom
employment).Ataxcreditisavailableforthreeofthe
brackets:thecreditis80%forindividualswhoderiveannual
incomegreaterthanEGP7,200anduptoEGP30,000;40%
forindividualswhoderiveannualincomegreaterthanEGP
30,000anduptoEGP45,000;and5%forindividualswho
deriveannualincomeoverEGP45,000anduptoEGP
200,000.Onlyoneofthesetaxcreditswillbeallowed
annually,basedonthehighesttaxbrackettowhichthe
taxpayerissubject.
Residentemployeeswhoderiveincomefromasecondary
employeraresubjecttotaxata10%flatrate.
21
Dividendincomereceivedbyresidentindividualsistaxedata
rateof10%;therateisreducedto5%iftheindividualholds
morethan25%ofthecapitalorvotingrightsofthe
distributingentityforatleasttwoyears.
Forcapitalgainstaxrates,see“Capitalgains”.

Capital duty No
Stamp duty
See“Stampduty”under“Othertaxesoncorporations.”
Real property tax

MostrealpropertyinEgyptissubjecttoarealestatetax.
A10%rateappliesontheannualrentalvalueafterallowing
a32%deductiontocoverrelatedcostsfornonresidential
property,anda30%deductionforresidentialproperty.
Exemptionsareprovidedfornonresidentialpropertythatis
usedforcommercial,industrialandadministrativepurposes
withanannualrentalvalueoflessthanEGP1,200,andfor
residentialunitswithanannualrentalvalueoflessthanEGP
24,000.Theuserofthepropertypaysthetax,whichisdue
intwoinstallments.Theannualrentalvalueofrealestateis
assessedeveryfiveyears.
Social security
Thesocialsecurityregimeappliesonlytolocalnationals,
unlessasocialsecurityagreementwithanothercountry
applies.
22

Filing and payment

IndividualsmustsubmitadeclarationofincomebeforeApril
1followingtheendofthetaxyearandpaytaxbasedonthe
declaration.
Theemployerisresponsibleforwithholdingandpayingsalary
taxtothetaxauthoritiesonamonthlybasis.However,ifthe
employeeispaidfromanoffshoresource,theemployee
mustdeclarehis/herincomeandbenefitsfortheentireyear
andpaytheapplicabletaxtothetaxauthoritieswiththe
annualincometaxreturnbeforeJanuary31ofthefollowing
year.
Penalties
ApenaltyofnolessthanEGP5,000andnomorethanEGP
20,000isimposedforfailuretofileataxreturn.Ifthe
amountsincludedinthetaxreturnarelessthanthefinal
assessedtaxamount,anadditionalpenaltymaybeimposed
basedonthedifferencebetweentheamountsincludedin
thereturnandthoseintheassessment.Therateis5%ifthe
differencerangesfrom10%-20%;15%ifthedifferenceisover
20%andupto50%;and40%ifthedifferenceexceeds50%.
Value added tax

VATgenerallyappliestothesupplyofallgoodsandservices.
Servicesarebroadlydefinedasanythingthatisnotclassified
asa“good,”whichmeansthatintellectualpropertyrights,
consultationsandmanagementservices,etc.willbesubject
toVAT.InputVATmaybeoffsetagainstoutputVATonmost
items.
Rates
Thestandardrateis14%fromJuly1,2017.
23
TheVATlawcontainsalistof57categoriesofgoodsand
servicesthatareexempt.Theseinclude:basicfoodproducts;
provisionofnaturalgas;production,transmittaland
distributionofelectricity;bankingservicesandother
regulatednonbankingfinancialservicesandinsurance
services;rentalofresidentialornonresidentialproperties;
andhealthandeducationservices.Inaddition,certain
EgyptianstatebodiesandentitiesareexemptfromVAT,as
wellasentitiesexemptedbyvirtueofaninternational
agreementorspeciallaw.
Theexportofgoodsorservicesissubjecttoazerorate.
Goodsandservicesprovidedbycompanieslocatedinthe
freezonesaresubjecttoazeroVATrate.
Certaingoodsandservicesarespecifiedas“tableditems”
thataresubjecttoaspecialrate,andtheirprovidersarenot
allowedtooffsetinputVATagainstoutputVAT.Theseitems
includeprofessionalservices,petroleumproducts,media
productions,etc.
Constructioncontractsalsoareincludedinthetable,but
inputVATpaidtosubcontractorsmaybeoffsetagainst
outputVATonthesameprojects.
Certaingoodsandservicesarespecifiedas“doubletaxed”
itemsandaresubjecttothegeneralrateaswellasthe“table
rate”;theseincludecars,homeappliances,airconditioning
equipmentandmobiletelecommunicationservices.
Registration
ResidentprovidersofgoodsorservicesmustregisterforVAT
purposesonlyiftheirannualrevenueisequaltoorexceeds
EGP500,000.Voluntaryregistrationispossiblebelowthis
limit.Nominimumregistrationthresholdexistsforproviders
oftableditemsanddoubletaxeditems.
24
Filing and payment

AllcompaniesmustprepareandfileamonthlyVATreturn
withtherelevantEgyptiantaxauthorities.
Areversechargemechanismappliesonimportedtaxable
goodsandservicesfromnonresidentsupplierstoanon-VAT-
registeredresidentconsumer(B2Ctransactions)ortoaVAT-
registeredresidentcustomer(B2Btransactions).
Source of tax law

IncomeTaxLaw,Law91(2005),ValueAddedTaxLawNo.67
(2016),RealEstateLawNo.196(2008)
Tax treaties
Egypthasconcluded57bilateraltaxtreaties.Egyptsigned
theOECDmultilateralinstrumentonJune7,2017.
Tax authorities
EgyptianTaxAuthority(ETA)
Deloitte contact
Kamel Saleh
Partner, Tax
ksaleh@deloitte.com
Ramy George
Partner, Tax
rageorge@deloitte.com
Giuseppe Campolo
Director, Tax
gcampolo@deloitte.com
25
Deloitte | ME tax handbook 2018 | Iraq
Iraq
Investment basics
Currency IraqiDinar(IQD)
Foreign exchange control Limited

Registeredentitiesmustprepareannualfinancialstatements,
withIQDastheaccountingcurrency,inaccordancewiththe
IraqiUniformAccountingSystem,andinArabic.TheIraqi
UnifiedAccountingSystemdoesnotmatchInternational
AccountingStandards.
Kurdistan Region tax regime

Asasemi-autonomousregioninNorthernIraq,theKurdistan
Regionhasintroducedcertainlawsandpracticesthatdiffer
fromthepositioninFederalIraq.

Thesearethejointstockcompany,limitedliabilitycompany,
jointliabilitycompany,simplecompany,soleowner
enterprise,representativeofficeandbranchoffice.
Corporate taxation
Residence
AnentityisresidentifitisincorporatedunderthelawsofIraq
orhasitsplaceofmanagementandcontrolinIraq.Anentity
isnonresidentifitdoesnotmeetthecriteriaforaresident
entity.
Basis
Acompanyistaxedonthebasisofitsnetprofit.
Taxable income
Taxisleviedbroadlyonallsourcesofincome,otherthan
incomethatisspecificallyexempt.Thereisnoconceptof
26
permanentestablishmentinIraqtaxlaw;allincomearisingin
IraqistaxableinIraq.
DividendsreceivedbyanIraqientitygenerallyarenotsubject
totax,providedtheprofitsoutofwhichthedividendsare
paidhavebeensubjecttotaxinIraq.
Capital gains
Gainsderivedfromthesaleofassetsshouldbeincludedin
ordinaryincomeandtaxedatthenormalcorporatetaxrate.
Losses
Lossesaretaxdeductibleandmaybecarriedforwardfora
maximumoffiveconsecutiveyears,butnomorethan50%
ofanyyear’staxableincomemaybeoffset,andanylosses
carriedforwardmaybedeductedonlyfromthesamesource
ofincomefromwhichtheyarebeingoffset.Thecarrybackof
Rate
Aflatrateof15%generallyapplies,buta35%rateappliesto
companiesoperatingintheoilandgassector.
A15%rateappliestoallindustriesintheKurdistanRegion.
Surtax No
27
Incentives
Theinvestmentlawprovidestaxholidaysandexemptions
fromimport/exporttaxesforspecificapprovedprojects.Free
zonesexist,butarenascent.
Withholding tax
Dividends
Iraqdoesnotlevywithholdingtaxondividends.
Interest
Interestpaidtoanonresidentshouldbesubjectto
withholdingtaxof15%ofthegrosspayment.
Royalties
Iraqdoesnotlevyaspecificwithholdingtaxonroyalties.See
commentsregarding“taxretentions”under“Other.”

No,butseecommentsregardingtaxretentionsunder
“Other.”
Other
Iraqhasanextensivetaxretentionsystemthatappliesin
respectofpaymentstosubcontractorsundercontractsthat
areconsideredtoconstitute“tradingin”Iraq.Theapplicable
taxretentionratescangoupto10%,dependingonthe
natureofthecontract.
Paymentsmadeundercontractsthatfallwithinthescopeof
theoilandgastaxlawaresubjecttoa7%withholdingtax.
Paymentsthatfalloutsideofthescopeoftheoilandgastax
lawgenerallyaresubjecttowithholdingtaxatratesof3%-
3.3%.Inpractice,theratemayvarydependingonthe
industry.
28
TaxretentionsarenotconsistentlyappliedintheKurdistan
Region,otherthanonpaymentsmadebythepublicsector,
whichoftenincludea5%taxretention.

Capital duty No
Payroll tax
Employersarerequiredtocalculate,withholdandremit
employees’personalincometax.See“Rates”under“Personal
taxation,”below.
Social security
Theemployerdeducts5%fromanemployee’ssalaryand
makesa12%or25%contributionofitsown.
ThesocialsecuritycontributionsintheKurdistanRegionare
5%foremployeesand12%foremployers.
Stamp duty
Thestampdutylawprovidesfordeminimispaymentson
certainproceduresanddocuments,anda0.2%stampduty
oncontractsoffixedvalue.
Transfer pricing
Therearenospecifictransferpricingrules,buttheIraqtax
authoritiesreservetherighttoadjustthetaxableprofitsof
anentityiftheyconsidertheamountsrecordedtobe
unreasonable.
29

fileitsownreturn.
Filing requirements
ThecorporatetaxreturnmustbefiledbyMay31following
theendofthetaxableyear.InKurdistanRegion,thedeadline
forcorporateincometaxfilingisJune30followingtheendof
thetaxableyear.
Penalties
Penaltiesonunpaidorlatepaidtaxareasfollows:5%ofthe
amountoutstandingifpaymentisnotmadewithin21daysof
theduedate;anadditional5%penaltyifthetaxisoutstanding
afterafurther21days(i.e.42daysintotal).Interestrunsfrom
thepaymentduedateuntilthedatethetaxisfinallysettled.
Penaltiesofupto25%maybeassessedontheincomeof
taxpayersthatfailtomaintainappropriateaccountingrecords
fortaxpurposes.
IntheKurdistanRegion,latefilingofthetaxreturnmayattract
apenaltyof5%permonth,uptoamaximumof100%ofthe
taxliabilityforlargetaxpayers.
Penaltiesonunpaidorlatepaidtaxarecalculatedas10%of
thetaxliability.ThisamountiscappedatIQD75,000peryear
forsmallcompanies(thecapshouldnotapplytotaxpayers
consideredtobe“large”).
30
Rulings No
Personal taxation
Basis
IraqinationalswhoareresidentinIraqaretaxableontheir
worldwideincome.Non-Iraqinationalsaresubjecttotaxon
incomearisinginIraq,irrespectiveoftheirresidencestatus.
Residence
AnIraqiindividualwhoispresentinIraqforatleastfour
monthsduringataxyearisconsideredaresident.Anon-Iraqi
individualisdeemedtoberesidentinIraqifhe/sheispresent
foratleastfourconsecutivemonthsoratotalofsixmonths
duringthetaxyear,orifhe/sheisemployedbyanIraqientity.
Filing status
Seebelowunder“Filingandpayment.”
Taxable income
Mostsourcesofincomearetaxable,unlessspecifically
exempt.
Capital gains
Capitalgainsderivedbyindividualsaretreatedasincome
andtaxedattheindividual’staxrate.

TheFederalIraqincometaxlawprovidesforvarious
deductionsandallowancesincalculatingtaxableincome.
IntheKurdistanRegion,individualsareentitledtoatax-free
legalallowanceofIQD1millionpermonth.
Rates
InFederalIraq,employmenttaxesareappliedatprogressive
ratesupto15%.
31
IntheKurdistanRegion,a5%taxisimposedonbasicsalary
plusanyallowancesinexcessof30%ofthebasicsalary.

Capital duty No
Stamp duty
Thestampdutylawprovidesfordeminimispaymentson
certainproceduresanddocumentsanda0.2%stampduty
onfixedvaluecontracts.
Social security
Theemployerdeducts5%fromanemployee’ssalaryand
makesa12%or25%contributionofitsown.
ThesocialsecuritycontributionsintheKurdistanRegionare
5%foremployeesand12%foremployers.

Filing and payment

Employersarerequiredtowithholdtaxesonbehalfof
employeesandpaythetaxtothetaxauthoritiesbythe
15thdayofeachmonth,andtosubmitannualtaxreturns
onbehalfoftheiremployees.Theannualemploymenttax
declarationmustbemadebeforeMarch31oftheyear
followingthetaxyear.
32
IntheKurdistanRegion,taxeswithheldfromtheemployees
shouldberemittedonaquarterlybasis.Thewithheldtaxes
alongwiththequarterlyemploymenttaxreturnsarerequired
tobesubmittedandsettledwithin21daysfollowingtheend
ofthequarter.
EmploymenttaxesintheKurdistanRegionmustbepaid
beforeMarch1oftheyearfollowingthetaxyear.
Penalties
Penaltiesonunpaidorlatepaidemploymenttaxesforboth
FederalIraqandtheKurdistanRegionareasfollows:5%of
theamountoutstandingifpaymentisnotmadewithin21
daysoftheduedate;anadditional5%penaltyifthetaxstillis
outstandingafterafurther21days(i.e.42daysintotal).
Penaltiesonunpaidorlatepaidemploymenttaxesforboth
FederalIraqandtheKurdistanRegionareasfollows:5%of
theamountoutstandingifpaymentisnotmadewithin21
daysoftheduedate;anadditional5%penaltyifthetaxstill
isoutstandingafterafurther21days(i.e.42daysintotal).
Value added tax

Taxable transactions No
Rates N/A
Registration, filing and payment N/A
Source of tax law:

Federal Iraq
IncomeTaxLawNo.113of1982,asamendedthrough2003,
alongwithsupportinginstructionsandcircularsissuedbythe
taxauthorities.
33
Kurdistan Region
IncomeTaxLawNo.5of1999,alongwithsupporting
instructionsandcircularsissuedbythetaxauthorities.
Tax treaties
Iraqhasenteredintofewtreatieswithotherjurisdictions.
IraqisasignatorytotheArabEconomicUnionCouncil
Agreement,although,todate,thepracticalapplicationof
thisagreementinIraqhasbeenlimited.
Tax authorities
Federal Iraq
GeneralCommissionofTaxation
Kurdistan Region
IncomeTaxDirectorate
Deloitte contact
Alex Law
Partner, Tax
alexlaw@deloitte.com
34
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Deloitte | ME tax handbook 2018 | Jordan
Jordan
Investment basics
Currency JordanianDinar(JOD)
Accounting principles/Financial statements

IFRSapplies.Financialstatementsmustbefiledannually.

Thesearethepublicandprivateshareholdingcompany,
limitedliabilitycompany,partnershipandbranchofaforeign
entity.
Corporate taxation
Residence
Jordaniantaxlawdoesnotdefineresidencefortaxpurposes,
butacompanythatisregisteredinJordanisdeemedtobe
resident.Foraforeignentitytooperateforanyperiodoftime
inJordan,evenforoneday,itmustbeestablishedand
registeredwiththeauthorities.
Basis
ResidentcompaniesaretaxableonincomesourcedinJordan.
Taxable income
IncomederivedfromJordanorfromJordaniansourcesis
taxable.
Dividendsdistributedbyaresidentcompanygenerallyare
exemptfromtax,withspecialrulesregarding“addbacks”and
distributions.
Capital gains
Incomederivedfromcapitalgainsgenerallyisexempt,except
forcapitalgainsonassetssubjecttodepreciation,intangible
36
assets(e.g.goodwill)andcapitalgainsrecognizedbybanks,
primarytelecommunicationscompanies,miningcompanies,
financialinstitutions,financialbrokeragecompanies,
insuranceandreinsurancecompaniesandjuristicpersons
conductingfinancialleaseactivities.Capitalgainsrealizedby
othercompanies/sectorsfrominvestmentswithinJordanare
exemptfromincometax.
Losses
Lossesapprovedbythetaxauthoritiesmaybecarried
forwardforuptofiveyears.Thecarrybackoflossesisnot
permitted.
Rate
Thestandardcorporatetaxrateis20%,andtherateon
banksis35%.A24%rateappliestoprimary
telecommunicationscompanies,electricitygenerationand
distributioncompanies,miningcompanies,insuranceand
reinsurancecompanies,financialbrokeragecompaniesand
financialinstitutions(includingmoneyexchangecompanies)
andjuristicpersonsconductingfinancialleasingactivities.A
20%rateappliestothecontracting,tradingandservices
sectorsanda14%rateappliestotheindustrialsector.
Surtax No
Incentives No
37
Withholding tax
Dividends
No,butseeIslamicfinancingconsiderationsunder“Interest,”
below.
Interest
Thewithholdingtaxoninterestpaidtoanonresidentis10%.
Theratemaybereducedunderataxtreaty.
Banksandfinancialinstitutions,licensedcompanies
permittedtoacceptdepositsandspecializedlending
institutionsinJordanarerequiredtowithhold5%oninterest
fromdeposits,commissionsandprofitparticipationsof
Islamicbanksintheinvestmentofsuchdeposits.Such
withholdingisconsideredafinaltaxforindividualsanda
paymentonaccountforacorporatetaxpayer.
Royalties
Thewithholdingtaxonroyaltiespaidtoanonresidentis10%.
Theratemaybereducedunderataxtreaty.

Thewithholdingtaxontechnicalservicefeespaidtoa
nonresidentis10%.Theratemaybereducedunderatax
treaty.
Other
Managementfeespaidtoanonresidentaresubjecttoa10%
withholdingtax,unlesstherateisreducedunderataxtreaty.
Feespaidtolocalprovidersofcertainservicesaresubjectto
awithholdingincometaxof5%.Thistaxisconsideredasa
paymentonaccountfortheserviceprovidersandmaybe
38
offsetagainsttheirannualincometaxliabilitywhenfilingtheir
annualincometaxreturnsforperiodsuptofouryearsfrom
thedateofwithholding.

Capital duty No
Payroll tax
Payrolltaxiswithheldbytheemployerfrommonthly
compensationatprogressiveratesrangingfrom7%to20%.
Real property tax

Apropertytaxisleviedatarateof15%oftheestimated
annualrentalvalue.
Social security
Theemployercontributes14.25%ofanemployee’ssalary
andtheemployeecontributes7.5%.However,themaximum
monthlysalarysubjecttosocialsecuritycontributionsisJOD
3,084.Theemployerisrequiredtowithholdandreport
contributionsonamonthlybasis.
Stamp duty
ContractssignedinJordanaresubjecttoastampdutyfee
of0.3%ofthecontractvalue.Contractssignedwitha
governmentalbodyorwithpublicshareholdingcompanies
aresubjecttoastampdutyfeeof0.6%ofthecontractvalue.
Transfer tax No
Transfer pricing No
39

Tax year Calendaryearorfiscalyear
fileitsownreturn.
Filling requirements
Companiesmustfileataxreturnwithinfourmonthsofthe
endoftheaccountingperiod,andtaxispayablewiththe
return.Incertaincases,taxmaybepaidbyinstallments.
Penalties
Latepaymentfeesareimposedat0.4%foreachweekof
delay.ApenaltyofJOD500appliesforlatefilingbypublicand
privateshareholdingcompanies;thepenaltyisJOD200for
othertypesofcompany.
Rulings No
Personal taxation
Basis
Residentandnonresidentindividualsaretaxedonlyon
incomesourcedinJordan.
Residence
AnindividualpresentinJordanfor183daysormoreina
calendaryearistreatedasaresidentfortaxpurposes.
Filing status
Jointassessmentofspousesmayberequested.
40
Taxable income
IncomefromemploymentinJordanistaxable.
Capital gains
Jordandoesnottaxcapitalgains.

DeductionsandallowancesaredeterminedatJOD12,000for
asinglepersonandJOD24,000forafamily.Anadditional
annualexemptionofJOD4,000isavailabletocovermedical
treatment,housingloaninterest,rent,educationexpenses
andtechnical,engineeringandlegalservices.Theexemption
isgrantedonacase-by-casebasisaftertheIncomeTax
Departmenthasreviewedtherelatedsupportingdocuments.
Rates
Taxisleviedatprogressiveratesontaxableincomeas
follows:7%onthefirstJOD10,000;14%onincomebetween
JOD10,000andJOD20,000;and20%ontheexcess.

Capital duty No
Stamp duty No
Real property tax

Apropertytaxisleviedatarateof15%oftheestimated
annualrentalvalue.
41
Social security
Theemployeecontributionis7.5%,whichiswithheldand
reportedbytheemployeronamonthlybasis.Themaximum
monthlysalarysubjecttosocialsecuritycontributionsisJOD
3,084.

Filling and payment

IndividualtaxreturnsareduebyApril30followingtheendof
thetaxyear,andanytaxdueispayablewiththereturn.
Penalties
Latepaymentfeesareimposedat0.4%foreachweekof
delay.ApenaltyofJOD100appliesforlatefiling.
Sales tax
Jordanleviesasalestaxonsuppliesofmanufacturers,
importersandsuppliersofservices.
Rates
Thestandardsaletaxrateis16%,withahigherrateapplying
tocertainluxuryitems.Certainitemsareexempt.
Registration
Businesseswithanannualtaxableturnoverofmorethan
JOD30,000mustregisterforsalestaxpurposes.
Filing and payment

Asalestaxreturnmustbefiledeverytwomonths,withthe
taxduepaidatthattime.
42
Source of tax law

IncomeTaxLawandGeneralSalesTaxLaw
Tax treaties
Jordanhassignedapproximately32taxtreaties.
Tax authorities
IncomeTaxandSalesTaxDepartment
Deloitte contact
Karim Nabulsi
Partner, Tax
knabulsi@deloitte.com
43
Deloitte | ME tax handbook 2018 | Kuwait
Kuwait
Investment basics
Currency KuwaitiDinar(KWD)

IFRS.Financialstatementsmustbefiledannually.

Thesearethelimitedliabilitycompany(WLL),shareholding
company(KSC)andpartnerships(generalandlimited).
Foreignentitiesmaycarryoutbusiness:
•UnderthesponsorshipofaregisteredKuwaitimerchant;
•ThroughaWLLorKSC(limitedto49%);
•UndertheForeignDirectInvestmentLawNo.8of2001,as
amendedbyLawNo.116of2013;
•ThroughbranchesintheKuwaitFreeTradeZone(KFTZ);or
•ThroughprovisionsofthePublicPrivatePartnership(PPP)
Law.
Corporate taxation
Residence
Thetaxablepresenceofaforeignentityisdeterminedby
whetheritcarriesonatradeorbusinessinKuwait,andnot
bywhetherithasapermanentestablishmentorplaceof
businessinKuwait.
Basis
Inpractice,theincometaxlawisappliedonlytoforeign
entitiescarryingonatradeorbusinessinKuwait,withthe
exceptionofentitiesthatareregisteredinGulfCooperation
Council(GCC)countriesandfullyownedbyKuwaiti/GCC
citizens.Althoughtheterm“taxableactivities”isdefinedinthe
law,theterm“carryingonatradeorbusinessinKuwait”is
interpretedinthebroadestsensebythetaxauthorities,
generallytomeanactivitiesthatgiverisetoallKuwaitsources
ofincome.
44
Taxable income
Incometaxisleviedonnetprofits(i.e.revenuelessallowable
expenses)earnedfromthecarryingonofatradeorbusiness
inKuwait.Royaltiesandfranchise,license,patent,trademark
andcopyrightfeesreceivedbyoverseasforeignentitiesfrom
KuwaitaresubjecttoincometaxinKuwait.
Ataxexemptionispossibleforprofitsearnedbyentities
frompuretradingoperationsontheKuwaitstockexchange,
whetherdirectlyorthroughportfoliosofinvestmentfunds;
forprofitsgeneratedfromactivitiescarriedoutintheKFTZ;
andforprofitsfromactivitiesundertheForeignDirect
InvestmentLaw(onataxcreditbasis,usingcertain
multipliers).Varioustaxexemptionsalsoaregrantedunder
PPPforprivatecompaniesworkingincollaborationwiththe
publicsector.Further,undertheCapitalMarketsAuthority
(CMA)LawNo.22of2015,abroadexemptionisgrantedon
allrevenueearnedbycorporateinvestorsthroughtradeon
theKuwaitstockexchange.
Seeunder“Taxableincome”,above.
Capital gains
Capitalgainsderivedfromthesaleofassetsaretreatedas
normalbusinessprofitsandaresubjecttoincometaxatthe
standardrateof15%.
Losses
Lossesmaybecarriedforwardforthreeyearstobeoffset
againstfuturetaxableprofits.Theutilizationofcarried
forwardlossesisnotpermittedif:
•TheentityceasesitsactivitiesinKuwait(unlessthecessation
ismandatory);
•Thetaxreturnindicatesthatthereisnorevenuearising
fromthecompany’smainactivities;
•Thecorporateentityisliquidated;
45
•Thelegalstatusofthecorporatebodyischanged;or
•Thecorporatebodyhasmergedwithanothercorporate
body.Thecarrybackoflossesisnotpermitted.
Rate 15%
Surtax No
Foreign tax credit

Aforeigntaxcreditisavailableonlyifprovidedforundera
relevanttaxtreaty.
Incentives
Ataxexemptionforupto10years,basedonataxcredit
systemusingcertainmultipliers,isavailableunderthe
ForeignDirectInvestmentLaw.Certainexemptionsarealso
availableunderthePPPLaw.Entitiessetupundersuchlaws
alsomaytakeadvantageofotherbenefitsandexemptions,
suchasthoserelatingtocustomduties.
Other
Entitiescarryingonatradeorbusinessintheareaknownas
the“SpecifiedTerritory”inthedividedneutralzone,which
consistsofthepartitionedneutralzonebetweenKuwait
andSaudiArabiaandtheislandsofKubr,QaruandUmmal
MaradimandtheirterritorialwatersaretaxedundertheTax
LawNo.23of1961,ratherthanthestandardcorporate
incometaxlaw.A20%taxrateappliestotaxableincome
belowKD500,000anda57%taxrateappliestotaxable
46
incomeinexcessofKD1million.Marginalreliefappliesto
taxableincomebetweenKD500,000andKD1million.
Withholding tax
Dividends No
Interest No
Royalties No
Technical service fees No

Capital duty No
Payroll tax No
Social security
BoththeemployerandKuwaitiemployeesmakesocial
securitycontributionsbasedontheemployee’ssalary(upto
aceilingofKWD2,750permonth).Thecontributionratesare
11.5%and10.5%oftheemployee’ssalaryfortheemployer
andtheemployee,respectively.
Stamp duty No
Transfer tax No
Other
AllentitiesoperatinginKuwaitarerequiredtoretain5%of
thetotalcontractvalue(whichmaybedeductedfromeach
paymentmade,wherepaymentismadeininstallments)from
47
acontractororsubcontractoruntilthe
contractor/subcontractorsettlesitstaxliabilitieswiththe
Kuwaittaxauthoritiesandobtainsacertificatefromthe
authorities.
KSCs(bothlistedandunlisted)mustpay1%oftheirprofits,
afterthetransferofthestatutoryreserveandtheoffsetof
lossesbroughtforward,totheKuwaitFoundationforthe
AdvancementofScience,tosupportscientificprogress.
KuwaitishareholdingcompanieslistedontheKuwaitstock
exchangearerequiredtopayanannualnationallabor
supporttaxof2.5%ofnetprofitstosupportemploymentin
nongovernmentagencies.
Kuwaitishareholdingcompanies(bothlistedandunlisted,
butexcludinggovernmentcompanies)mustpay1%ofnet
profitsforZakatorasacontributiontothestate’sbudget.
Thecompanyhastheoptionwhethertoconsiderthe1%as
Zakatorastatebudgetcontribution.
Alloftheaboveamountsmustbedeductedwhencalculating
distributableprofits.
Transfer pricing
Therearenoformaltransferpricingrules,butthetax
authoritiesdeemprofitmarginsoncertainactivities,as
follows:
•MaterialsimportedbyforeignentitiesoperatinginKuwait:
15%onmaterialsimportedfromtheheadoffice;10%on
materialsimportedfromrelatedcompanies;and5%on
materialsimportedfromunrelatedcompanies.
•DesignworkcarriedoutoutsideKuwait:25%ondesign
workconductedbytheheadoffice;20%ondesignwork
conductedbyrelatedcompanies;and15%ondesignwork
conductedbyunrelatedcompanies.
48
•ConsultingworkcarriedoutoutsideKuwait:30%on
consultingworkconductedbytheheadoffice;25%on
consultingworkconductedbyrelatedcompanies;and20%
onconsultingworkconductedbyunrelatedcompanies.
Other
Themaximumdeductionforheadofficeexpensesis1.5%for
foreigncompaniesoperatinginKuwaitthroughalocalagent,
and1%forforeigncompaniesthatareshareholdersinaKSC
orWLL.

Tax year
Thetaxableperiodnormallyisthecalendaryear.However,
withthepermissionoftheDirectoroftheIncomeTax
Department,ataxableentitymaykeepitsbooksona
differentbasis(e.g.iftheheadofficeofthetaxableentity
followsafinancialyear-endotherthanDecember31).
Filing requirements
Thetaxdeclarationforeachtaxableperiodmustbe
submittedwithinthreeandahalfmonthsoftheendofthe
taxableperiod.Aforeignentitymayrequestanextension
ofupto60daysforfilingthetaxdeclaration,providedthe
requestissubmittedonorbeforethe15thdayofthesecond
monthfollowingtheendofthetaxableperiod;otherwise,
therequestwillnotbeconsidered.
49
Taxmaybesettledinalumpsumormaybepaidinfour
installmentsonthe15thdayofthefourth,sixth,ninthand
12thmonthsfollowingtheendofthetaxyear.Ifanextension
isgranted,notaxpaymentisnecessaryuntilthedeclaration
isfiled.However,paymentthenmustbemadeofboththe
firstandsecondinstallments.
Penalties
Delaysinthesubmissionofthetaxdeclarationaresubjectto
penalties,atarateof1%ofthetaxpayableforeach30days’
delayorpartthereof.Apenaltyalsoischargedforadelayin
thepaymentoftax,atarateof1%ofthetaxdueforeach30
days’delayorpartthereof.
Rulings No
Personal taxation
Basis
Thereisnopersonalincometax(employmenttax)inKuwait.
Residence No
Filing status No
Taxable income No
Capital gains No
Rates No

Capital duty No
Stamp duty No
50
Social security
BoththeemployerandKuwaitiemployeesmakesocial
securitycontributionsbasedontheemployee’ssalary
(uptoaceilingofKWD2,750permonth).Theemployee
contributionrateis10.5%ofsalary.

Tax year No
Filing and payment No
Penalties No
Value added tax

TheKuwaitigovernmenthascommittedtointroduceVAT
bysigningthemainframeworkagreementwiththeGCC
countries.ThedraftlawhasbeenapprovedbytheCabinet
andisnowwiththeKuwaitiParliamentforapproval.
Rates No
Registration, filing and payment No
Source of tax law

AmiriDecreeNo.3of1955amendedbyLawNo.2of2008,
thesupplementaryresolutionsandcirculars;LawNo.19of
2000,relatingtothenationallaborsupporttax;LawNo.46of
2006,regardingZakatandcontributiontothestate’sbudget;
LawNo.23of1961,relatingtotheDividedNeutralZone.
51
Tax treaties
Kuwaithasconcluded63taxtreaties.Kuwaitsignedthe
OECDmultilateralinstrumentonJune7,2017.
Tax authorities
DepartmentofIncomeTax
Deloitte contact
Ihab Abbas
Partner, Tax
iabbas@deloitte.com
Robert Tsang
Partner, Indirect Tax
robtsang@deloitte.com
52
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Deloitte | ME tax handbook 2018 | Lebanon
Lebanon
Investment basics
Currency LebanesePound(LBP)

IFRS.Auditedfinancialstatementsmustbepreparedandfiled
annually.

Thesearethelimitedliabilitycompany,jointstockcompany,
partnership,branchandrepresentativeofficeofaforeign
company.
Corporate taxation
Residence
Anentityisconsideredresidentifitisestablishedor
registeredinaccordancewithLebaneselaw.Anentityalsois
consideredresidentifbusinessiscarriedoutfromafixed
placeinLebanonforaperiodexceedingsixmonthsinany
12consecutivemonthsforcontractingworkandforaperiod
exceedingthreemonthsforotheractivities.
Basis
Residentcompaniesaretaxedontheirworldwideincome,
unlesstheincomeisearnedthroughforeignbranchesor
subsidiaries.
Taxable income
Incometaxisleviedontaxableincomerelatedtoallbusiness
activities,unlessexemptbylaw.Taxableincomeiscalculated
asrevenuelesseligibleexpenses,exceptforinsurance
companies,publiccontractors,oilrefineriesandinternational
transportbusinesses,wheretaxableincomeiscalculatedasa
percentageoftotalrevenue.
54
DividendsreceivedfromaLebanesecompanyarededucted
fromtaxableincomeforpurposesofthecorporateincome
taxcalculation.Dividendsreceivedfromaforeignentityare
taxableatarateof10%.
Capital gains
Capitalgainsderivedfromthedisposaloftangibleand
intangibleassetsandfinancialassetsaretaxedatarateof
15%(20%foroilandgascompanies).
Losses
Taxablelossesmaybecarriedforwardforthreeyears.The
carrybackoflossesisnotpermitted,exceptforoilandgas
companies,whichmaycarryforwardlossesindefinitely.
Rate
17%.Oilandgascompaniesaresubjecttoa20%rate.See
also“Taxationofdividends”and“Capitalgains,”above.
Surtax No
Holding company regime

Holdingcompaniesareexemptfromtaxonprofitsandtaxon
dividenddistributions.Theyaresubjecttoataxoncapital
andreserves,cappedatLBP5millionperyear.Gainsderived
fromthesaleofaninvestmentinaLebanesesubsidiaryor
associateareexemptiftheinvestmentisheldformorethan
twoyears.Notaxappliesongainsderivedfromthedisposal
ofaninvestmentinaforeignsubsidiary.
55
Incentives
Holdingcompaniesareexemptfromtaxonprofitsandtaxon
dividenddistributions.Theyaresubjecttoataxoncapital
andreserves,cappedatLBP5millionperyear.Gainsderived
fromthesaleofaninvestmentinaLebanesesubsidiaryor
associateareexemptiftheinvestmentisheldformorethan
twoyears.Notaxappliesongainsderivedfromthedisposal
ofaninvestmentinaforeignsubsidiary.
Other
Anoffshorecompanyregimeisavailable,underwhichan
offshorecompanyisexemptfromtaxonprofitsanddividend
distributions;itissubjecttoanannuallumpsumtaxamount
ofLBP1million.Anoffshorecompanymaycarryonactivities
andhaveinvestmentsonlyoutsideLebanonorthroughthe
freezones;itmayinvestinLebanesetreasurybills,butitmay
notcarryonbankingorinsuranceactivities.
Withholding tax
Dividends
Dividendspaidtoaresidentornonresidentaresubjecttoa
10%withholdingtax,unlesstherateisreducedunderatax
treaty.
Interest
Interestonbankdepositsorbondsissubjecttoa7%
withholdingtax;otherinterestissubjecttoa10%withholding
tax.Interestpaidtoanonresidentissubjectto7.5%
withholdingtax.Therateoninterestmaybereducedunder
ataxtreaty.
Royalties
Royaltiespaidtoanonresidentaresubjecttoa7.5%
withholdingtax,unlesstherateisreducedunderataxtreaty.
56

Technicalormanagementfeespaidtoanonresidentare
subjecttoa7.5%withholdingtax(10%foroilandgas
companies),unlesstherateisreducedunderataxtreaty.

Inadditiontobeingsubjecttothenormalcorporateincome
taxrate,profitsgeneratedbyabranchofaforeignentityare
subjecttoanadditional10%remittancetax.

Capital duty
Aone-timestampdutyof0.4%isleviedonthesubscription
ofcapitalofacompanyoritsincrease.
Payroll tax
Payrolltaxiswithheldfromsalary,atratesrangingbetween
2%(forthelowestbracket)and20%(foranamountofsalary
inexcessofUSD80,000ayear).Theemployerwithholds
theseamountsfromthesalaryandremitsthetaxtothe
authoritiesonaquarterlybasis.
Real property tax

AbuiltpropertytaxisleviedonrentalincomefromLebanese
realproperty,atratesrangingbetween4%and14%.Seealso
“Transfertax,”below.
Constructions,installationsandvehiclesusedforpetroleum-
relatedoperationswithinLebaneseterritorialwatersare
exemptfrombuiltpropertytax.
Social security
Therearethreemandatorysocialsecurityschemes:
•Afamilyschemecontributionof6%ofemployeeearnings
uptoUSD12,000peryear;
57
•Amedicalschemecontributionof11%ofearningsupto
USD20,000peryear(ofwhich3%istheemployee’sshare);
and
•Anend-of-serviceindemnityschemecontributionof8.5%of
totalearnings.Contributionsarebornebytheemployer.
Stamp duty
Astampdutyisleviedonmostcontracts,atarateof0.4%.
Seealso“Capitalduty,”above.
Transfer tax
A6%taxisleviedonthetransferofrealproperty.
Transfer pricing
Thearm’slengthprincipleappliestodeterminethetaxable
baseofrelatedpartytransactions(bothresidentand
nonresident).
Thin capitalization
No,butcertainrulesapplyforoilandgascompanies.
Other
Owningmorethan3,000squaremetersoflandbya
foreignerorbyacompanypartiallyownedbyforeigners
requiresapprovalviaaministerialdecree.

Tax year
Thecalendaryearisthetaxyear,althoughexceptionsare
grantedwhenaparentcompanyhasaspecialfiscalyear.
58
Filling requirements
Thetaxreturnmustbesubmittedwithinfivemonthsafter
thetaxperiod.
Penalties
Failuretosubmitataxreturnissubjecttoapenaltyof5%per
month,cappedat100%,andadelayinpaymentissubjectto
apenaltyatarateof1%(1.5%forwithholdingtaxandVAT)
permonth.
Inthecaseofanadjustmentofthetaxreturn,a20%penalty
appliesonthedifferencebetweenthenettaxowedandthe
nettaxdue(a300%penaltyinthecaseofoilandgas
companies).
Rulings
No,howevertaxpayersmayobtainexplanationsforthetax
treatmentofnewtransactions.
Personal taxation
Basis
Employeesaretaxedonincomegeneratedfromservices
providedinLebanonorforanentityinLebanon.Self-
employedindividualsaretaxedonincomegenerated
fromservicesprovidedinLebanonorpertainingtotheir
professioninLebanonunlessearnedthroughapermanent
establishmentoutsideLebanon.Nonresidentsaretaxedonly
onLebanese-sourceincome.
Residence
Anindividualisconsideredresidentifhe/shefulfillsoneofthe
followingconditions:hasafixedplaceofdoingbusinessin
59
Lebanon;maintainsapermanenthomeinLebanonusedfor
his/herusualresidenceorfortheusualresidenceofhis/her
family;orstaysinLebanonformorethan183days
continuouslyorintermittentlyinaconsecutive12-month
period.Transientstaysandstaysformedicaltreatmentsare
notcountedinthecomputationofthisperiod.
Registrationasalicensedprofessionaltriggersresidency.
Filing status
Marriedpersonsaretaxedseparately;jointassessmentisnot
permitted.
Taxable income
Taxableincomecomprisesincomefromemployment,income
fromaprofessionorpersonalestablishmentorincomefrom
apartnership.
Capital gains
Capitalgainsaretaxedat15%.

Familydeductionsaregrantedincomputingtaxableincome.
Rates
Progressiveratesrangefrom4%upto21%.Capitalgainsare
taxedat15%.Incomederivedfromforeignsharesandbonds
istaxedatarateof10%.

Capital duty No
Stamp duty
Seeunder“Othertaxesoncorporations.”
60
Capital acquisitions tax

Capitalgainstaxonthesaleofrealestateownedby
nontaxableindividualsisphasedoutatarateof8%annually
asfromthedateofacquisition.Gainfromthesaleofa
primaryresidenceistaxexemptonuptotworesidences.
Real property tax

Anannualrealpropertytaxisleviedbasedontheannual
rentalvalue.
Inheritance/estate tax
Inheritancetaxisleviedatratesrangingfrom12%to45%,
dependingontheleveloffamilyrelationship.
Social security
Seeunder“Othertaxesoncorporations.”

Filing and payment

Taxisassessedonapreceding-yearbasis.Anindividualis
requiredtosubmitareturnandpaytaxduebeforeMarch31
ofthefollowingyear.
Lebanon-residentemployeesofnonresidentforeignentities
arerequiredtopaytaxandfilepayrolltaxreturns.
Penalties
See“Penalties”under“Complianceforcorporations.”
Value added tax

VATappliestomosttransactionsinvolvinggoodsand
61
services.Basicfoods,health,realestate,educational,
financial,insuranceandbankingservicesandtheleasingof
residentialpropertyareexempt.Certaingoodsimportedfor
useinpetroleumactivitiesareexemptfromVAT.
Rates
ThestandardVATrateis11%.Exports,includingauthorized
oilexports,areexemptfromVAT.
Registration
TaxpayerswhoseturnoverexceedsLBP100millionforfour
consecutivequartersmustregisterforVAT.
Filing and payment

VATreturnsmustbefiledandtaxpaidonaquarterlybasis.
Source of tax law

IncomeTaxLaw,Taxprocedures,VATlaw,andOilandGas
TaxationLaw
Tax treaties
Lebanonhasconcluded34taxtreaties.
Tax authorities
MinistryofFinance
Deloitte contacts
Joe K. El-Fadl
Partner, Tax
jelfadl@deloitte.com
Ghassan El-Kadi
Director, Tax
gelkadi@deloitte.com
62
Deloitte | ME tax handbook 2018 | Libya
Libya
Investment basics
Currency LibyanDinar(LYD)

Althoughthereisaforeignexchangelaw,inpractice,foreign
exchangetransactionsareallowed.

LibyanCPAstandardsapply.Financialstatements(auditedby
aLibyanlicensedaccountingfirm)mustbefiledannually.

Thesearethejointstockcompany,branchandrepresentative
office.AlimitedliabilitycompanyisavailableonlytoLibyan
nationals.
Corporate taxation
Residence
AnentityestablishedinLibyaisconsideredtaxresidentin
Libya.
Basis
AnyincomegeneratedinLibyafromassetsheldinLibyaor
workperformedthereinshouldbesubjecttoincometaxin
Libya.
Taxable income
Taxisimposedannuallyonnetincomeaccruedduringthe
taxyear.Taxableincomeincludesincomefrombusiness
operations,lessallowableexpenses.Libyancompaniesand
branchesofforeigncompaniesshouldbetaxedonthebasis
oftheirsubmittedtaxdeclarations,dulysupportedby
auditedfinancialstatements,includingstatementsof
depreciationandgeneralandadministrativeexpenses.
64
However,“deemedprofit”-basedtaxationmayapplywhena
foreignentityisnotregisteredatthetimeofcontracting,the
entitydoesnotholdstatutorybooksinLibyaorthebooksare
notmaintainedinaccordancewiththelocalregulations.The
authoritiesalsocanassesstaxonadeemedprofitbasisif
theyconsideramounts,margins,etc.inaccurateoroutof
linewithindustrynorms(e.g.casesinvolvingpotential
concealment,manyintercompanytransactions,etc.).
DividendsarenottaxedinLibya.
Capital gains
Capitalgainsaretreatedasincomeandtaxedatthestandard
rate.
Losses
Netoperatinglossesgenerallymaybecarriedforwardfor
fiveyears,andlossesincurredbyupstreamoilandgas
companiesmaybecarriedforwardfor10years.The
carrybackoflossesisnotpermitted.
Rate20%
Surtax
A4%defensecontributionappliesinadditiontothe
corporateincometax.Astampdutyof0.5%alsoislevied
onthetotalcorporateincometaxliability.
Alternative minimum tax

No,butbecausethetaxauthoritiescanchallenge
transactionsthatdonotappeartobeonarm’slengthterms,
etc.,deemedprofittaxationhasasimilarresultinLibya(see
aboveunder“Taxableincome”).
65
Foreign tax credit

Aforeigntaxcreditgenerallyisnotavailable,unlessso
providedinanapplicabletaxtreaty.
Incentives
Thepromotionofinvestmentlawisdesignedtoencourage
theinvestmentofnationalandforeigncapitalinLibya.Tax
benefitsaregrantedtocompaniesthatcancontributetothe
diversificationofthelocaleconomy,thedevelopmentofrural
areas,theincreaseofemployment,etc.
Thetaxexemptionsapplicabletocompanies
registered/governedbytheinvestmentlawinclude:a
five-yearexemptionfromincometax;anexemptionfrom
taxondistributionsandgainsarisingfromamerger,sale
orchangeinthelegalformoftheenterprise;anexemption
forprofitsgeneratedfromtheactivitiesoftheenterprise,
providedtheprofitsarereinvested;anexemptionfrom
customsdutiesonmachineryandequipment;andan
exemptionfromstampduty.Afreezonehasbeen
establishedinMisurata(QasrHamadportarea).
Withholding tax
Dividends No
Interest
Interestpaidonbankdepositsissubjecttoa5%tax.
Royalties
Royalties(exceptthosederivedfromtheoilandgassector)
generallyaretaxedasordinaryincomeonthebasistheasset
isheld/usedinLibya.
66

IncomefromworkperformedinLibyaisconsideredLibya-
sourceincomeandissubjecttotaxaccordingly.

Capital duty No
Payroll tax
Theemployerisresponsibleforwithholdingandremitting
payrolltax.
Social security
Socialsecuritycontributionsmustbemadebytheemployerata
rateof11.25%forforeigncompaniesandatarateof10.5%for
companieswithaLibyanparticipation,calculatedonthegross
wages/salary.Theemployeecontributes3.75%.
Stamp duty
Stampdutyisleviedatvaryingrates(althoughtherealsoare
certainfixedduties),typicallybetween1%and3%,onthe
executionofdocuments.Stampdutyof0.5%isleviedon
paymentsmadetothetaxauthorities.
Transfer tax No
Transfer pricing
AlthoughLibyadoesnothaveformaltransferpricingrules,
thetaxdepartmenthastheauthoritytoassesstaxona
deemedprofitbasisunderthegeneralanti-avoidance
provisions.
67
Thin capitalizationNo
Controlled foreign companiesNo
Other
Libyahasageneralanti-avoidancerule.

Tax year
Thetaxyearisthecalendaryear,althoughadifferentyear
maybeused,subjecttoapproval.
Consolidatedreturnsgenerallyarenotpermitted;eachentity
shouldfileaseparatereturn.
Filing requirements
Theannualreturnmustbesupportedbyauditedfinancial
statements(abalancesheet,profitandlossstatementanda
statementofoperations).Thefinancialstatementsmustbe
auditedbyaLibyanlicensedaccountingfirm.
Thereturnmustbefiledwithinfourmonthsoftheendofthe
taxyear.
Penalties
Penaltiesapplyforfailuretofile,latefilingorotherformsof
noncompliance.
Rulings No
Personal taxation
Basis
IndividualsaretaxedonLibya-sourceincome.
68
Residence
Theliabilitytotaxationtypicallyisbasedonthesourceof
income(particularlyfornon-Libyannationals);therefore,
residencegenerallyisnotakeyfactorindeterminingtax
liabilityinLibya.
Filing status
Eachtaxpayermustsubmitataxreturn;thereisnojoint
filing.
Taxable income
Taxisleviedonsalaryorwageincome(includingallowances)
derivedfromemployment,professionalincomeand,in
certaincircumstances,investmentincome.
Capital gains
Capitalgainsgenerallyaretreatedasordinaryincomeand
taxedatthestandardrateapplicabletothetaxpayer.

Limitedpersonalallowancesanddeductionsaregrantedin
calculatingtaxableincome.
Rates
Thepayrolltaxratesareasfollows:annualtaxableincome
oflessthanLYD12,000issubjecttoa5%rate,andannual
taxableincomeexceedingLYD12,001issubjecttoa10%
rate.AnexemptiongenerallyappliesforincomebelowLYD
1,800(forasingleindividual)orLYD2,400(foramarriedadult
whohasnodependentchildren).Marriedcoupleshavean
exemptionofLYD300foreachminorchild.Specialrates
applytocertaintypesofprofessionalincome.Incomeearned
fromcommercialactivitiesissubjecttoa15%rate,and
incomefromhandicraftsissubjecttoa10%rate.
69

Capital duty No
Stamp duty
Stampdutyisleviedatvaryingrates.
Capital acquisitions taxNo
Real property taxNo
Net wealth/net worth taxNo
Social security
Socialsecuritycontributionsmustbemadebyboththe
employerandtheemployee.Theemployercontributes11.25%
(inthecaseofaforeigncompany)or10.5%(inthecaseofa
companywithaLibyanparticipation)ofgrosswages/salary.
Theemployeecontributes3.75%.

Filing and payment

Taxonemploymentincomeiswithheldandremittedbythe
employerattheindividual’sapplicablerate.
Penalties
Penaltiesapplyforfailuretocomply,latefilingorotherforms
ofnoncompliance.
Value added tax

LibyadoesnotlevyaVATorsalestax.
70
Source of tax law

IncomeTaxLawNo.7of2010andRegulationsofIncometax
No.7of2010,StampLawNo.12of2004andLawNo.8of
2012.
Tax treaties
Libyahasapproximately10taxtreaties.
Tax authorities
TaxDepartmentoftheSecretariat(Ministry)ofFinance
Deloitte contact
Alex Law
Partner, Tax
71
Deloitte | ME tax handbook 2018 | Oman
Oman
Investment basics
Currency OmaniRiyal(OMR)

TheSultanateofOmanhasafreeeconomy.Although
administrativeproceduresmustbefollowed,thereareno
exchangecontrolsoninboundoroutboundinvestmentor
ontherepatriationofcapitalorprofits,eitherbynationalsor
membersoftheexpatriatepopulation.
Accounting principles/financial statements

AbusinessregisteredinOmanmustmaintainfullaccounting
recordsinaccordancewithIFRS.

Thesearethejointstockcompany(generalorclosed),limited
liabilitycompany(LLC),partnership(generalorlimited),joint
ventureandbranchofaforeigncompany.
AnOmaniLLCmaybeestablishedwithOmanisharecapital
participation.Non-Omaninationalswishingtoengageina
tradeorbusinessinOman,ortoacquireaninterestinthe
capitalofanOmanicompany,mustobtainalicensefromthe
MinistryofCommerceandIndustry.
Aforeignbusinessisrequiredtoregisterwiththetax
authoritiesbyfilingadeclarationofbusinessparticulars
andsupportingdocuments.Undercurrentpractice,Omani
nationalsmustholdatleast30%ofthecapitalofanOmani
company,butwaiversallowforupto100%foreign
participationiftheprojecthasaminimumcapitalofOMR
500,000andcontributestothedevelopmentofthenational
economy(UScompaniescanownupto100%ofthecapital
underafreetradeagreementbetweentheUSandOman.)
72
Corporate taxation
Residence
ResidenceisnotdefinedinOmanforcorporatetaxpurposes.
Aforeigncompanywillbedeemedtohaveapermanent
establishment(PE)inOmanifitprovidesconsultancyand
otherservicesinOmanfor90daysormoreintheaggregate
withina12-monthperiodorifithasadependentagentin
Oman.
Basis
AnOmanicompanyissubjecttotaxonworldwideincome,
withaforeigntaxcreditgrantedforcertaintaxespaid
overseas.APEofaforeigncompanyissubjecttotaxonly
onOman-sourceincome.
Taxable income
Taxableincomeisgrossincomeforthetaxyearafter
deductingallowableexpenses,andmakingadjustmentsfor
disallowedexpensesoranyexemptionsundertheOman
taxlaw.
DividendsreceivedbyanOmanicompanyfromanother
Omanicompanyarenottaxable,butdividendsreceived
fromaforeigncompanyaresubjecttotax.
Capital gains
Capitalgainsderivedfromthesaleofinvestments,fixed
assetsandacquiredintangibleassetsaretaxedatthesame
ratesasordinaryincome.Suchgainsarenotsubjecttoany
specialtaxtreatment,butgainsfromthesaleoflocallylisted
sharesareexempt.
Losses
Lossesmaybecarriedforwardandsetoffagainsttaxable
incomeforfiveyears.However,nettaxlossesincurredfor
73
thefirstfiveyearsduringataxexemptionperiodbyany
establishmentorOmanicompanybenefitingfroman
exemptionundertheOmantaxlawgenerallymaybecarried
forwardindefinitely.Thecarrybackoflossesisnotpermitted.
Rate
Lossesmaybecarriedforwardandsetoffagainsttaxable
incomeforfiveyears.However,nettaxlossesincurredfor
thefirstfiveyearsduringataxexemptionperiodbyany
establishmentorOmanicompanybenefitingfroman
exemptionundertheOmantaxlawgenerallymaybecarried
forwardindefinitely.Thecarrybackoflossesisnotpermitted.
Surtax No
Foreign tax credit

Thetaxauthoritiesmayallowacreditforforeigntaxespaid
onacase-by-casebasis.Forcertaintaxespaidoverseas,the
creditmaybegranteduptotheamountoftheOmanitax
liabilityregardlessofwhetherOmanhasconcludedatax
treatywiththesourcecountry,subjecttotheapprovalofthe
DirectorofTaxation.
Incentives
Thetaxauthoritiesmayallowacreditforforeigntaxespaid
onacase-by-casebasis.Forcertaintaxespaidoverseas,the
creditmaybegranteduptotheamountoftheOmanitax
liabilityregardlessofwhetherOmanhasconcludedatax
treatywiththesourcecountry,subjecttotheapprovalof
theDirectorofTaxation.
74
Withholding tax
Dividends
Omanintroduceda10%withholdingtaxondividendson
sharesdistributedbyjointstockcompaniestoforeign
companieswithoutaPEinOman,effectiveFebruary27,
2017.
Interest
Omanintroduceda10%withholdingtaxoninterestpaidto
foreigncompanieswithoutaPEinOman,effectiveFebruary
27,2017.
Royalties
ForeigncompanieswithoutaPEinOmanthatderiveOmani-
sourceroyaltiesaresubjecttoa10%withholdingtaxonthe
grossroyaltyamount.Thedefinitionofroyaltiesincludes
paymentsfortheuseof,ortherighttouse,software,
intellectualpropertyrights,patents,trademarks,drawings
andequipmentrentals.
Service fees
AsfromFebruary27,2017,withholdingtaxattherateof10%
isapplicableonservice.Withholdingtax(WHT)wouldalso
applyonfeesforprovisionofservicesregardlessofwhere
theserviceisperformed.
Others
ForeigncompaniesthatdonothaveaPEinOmanandthat
deriveOmani-sourceincomethroughmanagementfees,
considerationfortheuseof,ortherighttouse,computer
softwareandconsiderationforR&Daresubjecttoa10%
withholdingtaxonthegrossamount,whichiswithheldby
theOmanientityandremittedtothetaxauthorities.Asfrom
February27,2017,theprovisionofservicesissubjecttoa
75
10%withholdingtaxifservicesareprovidedentirelyorpartly
inOman.

Capital duty No
Payroll tax
No,butseeunder“Socialsecurity.”
Social security
Theemployermustcontributeanamountequalto10.5%of
themonthlysalaryofitsOmaniemployeesforsocialsecurity
(coveringoldage,disabilityanddeath);and1%ofthe
monthlysalaryforindustrialillnessesandinjuries.The
contributionsarerequiredforOmaniemployeesbetween
theagesof15and59whoarepermanentlyemployedin
theprivatesector.Aunifiedsystemofinsuranceprotection
coverageisineffectforGCCcitizensworkinginotherGCC
countries.
Stamp duty No
Transfer tax No
Other
Tourismandmunicipalitytaxesmaybeimposedoncertain
consumption.
Transfer pricing
Pricingbetweenrelatedentitiesmustbeonanarm’slength
basis.
76
Thin capitalization
Thincapitalizationrulesrequireadebt-to-equityrationot
exceeding2:1forinteresttobedeductibleonborrowings
betweenrelatedparties.
Disclosure requirements
Relatedpartytransactionsmustbedisclosedinthetax
returns.
Other
Ifarelatedpartytransactionresultsinalowerincomeor
highercosts,thetransactionmaybesetasideandthe
taxableincomewillbecomputedasifthetransactions
werewithunrelatedparties.

Tax year
Thetaxyearisthecalendaryear,whichtaxpayersgenerally
areexpectedtouseastheiraccountingyearindrafting
financialstatements(adifferentaccountingyearisacceptable
iffollowedconsistently).Onstart-up,taxpayersmaybeable
touseanopeningaccountperiodof12monthsora
maximumperiodupto18months.Accountsusuallyare
maintainedinOMR,butalsomaybemaintainedinforeign
currency,subjecttotheapprovaloftheDirectorofTaxation.
fileitsownreturn.
AforeignpersonthathasmultiplePEsinOmanmustfilea
taxreturnthatcoversallPEsandtheamountoftaxpayable
willbebasedontheaggregatetaxableincomeofthePEs.
77
Filing requirements
Companiesmustfileaprovisionaltaxreturnwithinthree
monthsfollowingtheendoftheaccountingyearandmake
apaymentoftheestimatedtax.Anannualincometaxreturn,
accompaniedbyauditedfinancialstatements,mustbefiled
withinsixmonthsoftheendoftheaccountingyear,andany
taxduemustbepaidatthattime.
Penalties
FailuretosubmitadeclarationofincometotheDirectorof
Taxationmayleadtoanarbitraryassessmentandpenalties.A
minimumpenaltyofOMR100andamaximumofOMR2,000
maybeimposedforfailuretofileareturnbytheprescribed
deadline.Delayinthepaymentofincometaxnormallyresults
inadditionaltaxcalculatedat1%permonthonthe
outstandingamount.
Rulings
Rulingsgenerallyarenotissued,althoughtheycanbe
obtainedfortheapplicationofwithholdingtaxes.
Personal taxation
Basis No
Residence No
Filing status No
Taxable income No
Capital gains No
Rates No
78

Capital duty No
Stamp duty
Stampdutyappliesonlytotheacquisitionofrealestateatthe
rateof3%ofthesalesvalue.
Social security
Omaniprivatesectoremployeesbetweenage15and59
mustcontribute7%oftheirmonthlysalaryforsocialsecurity
purposes(oldage,disabilityanddeath).

Tax year No
Penalties No
Excise Tax
Similartovariousothercountries,theOmangovernmentis
proposingtointroducetheexcisetax.Atthetimeofwriting,
weunderstandthatthelegislation,regulationsandguidance
fortheexcisetaxshouldbereleasedshortly.
Value added tax

Presently,thereisnoVATorsalestaxinOman.However,the
OmangovernmenthasagreedtointroduceVAT.Atthetime
ofwriting,weunderstandthatthelocalVATlegislation,
79
regulationsandguidanceisunderpreparationandreviewby
thegovernment.
Rates
TheproposedrateofVATagreedundertheunifiedVAT
agreementbytheGCCcountriesis5%.
Source of tax law

LawofIncomeonCompaniesNo.28/2009;RoyalDecree
9/2017;CommercialCompaniesLawNo.4/1974;Social
SecuritiesLaw;LawforUnifiedIndustrialOrganizationof
GulfCooperationCouncilCountries;ForeignBusinessand
InvestmentLaw;LawofOrganizingandEncouragingIndustry
andMining.
Tax treaties
Omanhas29incometaxtreatiesandfourairtransporttax
treaties.
Tax authorities
MinistryofFinanceandSecretariatGeneralforTaxation
Deloitte contact
Muhammad Bahemia
Partner, Tax
mbahemia@deloitte.com
Phaninder Peri
Director, Tax
pperi@deloitte.com
Robert Tsang
80
Committed to the success of
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Regulatory change, increased transparency, technology
advancements–everything about the way tax departments
operate is in flux. At the same time, tax leaders are still
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By focusing on process, technology, resources and

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for, and lead, an effective tax operating model. Our goal is
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Deloitte | ME tax handbook 2018 | Palestinian Ruled Territories
PalestinianRuled
Territories
Investment basics
Currency NewIsraeliShekel(NIS)

Therearenoforeignexchangecontrolsorrestrictionsonthe
importorexportofcapital.Repatriationpaymentscanbe
madeinanycurrency.Bothresidentsandnonresidentscan
holdbankaccountsinanycurrency.
Accounting principles/financial statements

IAS/IFRSarerequiredforfinancialservicesentitiesand
companieslistedonthePalestinestockexchange.Financial
statementsmustbepreparedannually.Semi-annualfinancial
statementsmustbepreparedforfinancialinstitutionsand
listedcompanies.

Thesearethepublicshareholdingcompany,private
shareholdingcompanywithlimitedliability,partnership,sole
proprietorshipandbranchofaforeigncorporation.
Corporate taxation
Residence
AcorporationisresidentifitisincorporatedinPalestineor
managedandcontrolledinPalestine.
Basis
Residentsandlegalentities,includingbranchesofforeign
entities,aretaxedontheirtaxableincomeinPalestine
computedinaccordancewiththetaxlaw.
Taxable income
Corporatetaxisimposedonacompany’snetprofits,which
consistofbusiness/tradingincomeandpassiveincome.
Taxableincomeofresidentpersonsandcompaniesincludes
82
foreignincomederivedfromtheirfundsordepositssourced
fromPalestine.
Incomeistaxableonanaccrualsbasis,exceptforinterest
andcommissionsondoubtfuldebtsoffinancialinstitutions,
whicharetaxableonacashbasis.Taxableincomeofcertain
professionsiscomputedonacashbasisinaccordancewith
directivesissuedbythetaxdepartment.
Dividendsreceivedbyaresidentcompanyfromanother
residentcompanyaretaxexempt.Dividendsreceivedfroma
nonresidententityaretaxedattheregularcorporatetaxrate.
Capital gains
Capitalgainsderivedfromthesaleofinvestmentsinequity
securitiesandbondsareexempt.Capitalgainsderivedfrom
thesaleoftangibleassetsandrealpropertyaretaxableat
theregularcorporatetaxrate.
Losses
Taxlossesmaybecarriedforwardforfiveyears.Suchlosses
donotincludeunrealizedlossesfromrevaluationsorlosses
incurredontaxexempttransactions.Lossesmaynotbe
carriedback.
Rate
Thestandardrateis15%.Lifeinsurancebusinessesare
subjecttoareducedrateof5%onpremiumincome.The
taxableincomeoftelecommunicationcompaniesand
companiesthatenjoyspecificprivilegesormonopoliesis
taxedat20%.
Surtax No
83
Incentives
Certainentitiesaregrantedtaxincentivesifapprovedbythe
agencyfortheencouragementofinvestment.Incentivesare
intheformoftaxratereductionsforspecifiedperiodsof
time.
Withholding tax
Dividends
A10%withholdingtaxisleviedondividendspaidtoa
residentoranonresident,unlesstherateisreducedoran
exemptionappliesunderataxtreaty.Thewithholdingtaxwas
suspendedduring2015and2016,butnoguidancehasbeen
issuedonthestatusfor2017and2018.
Interest
ThePalestinianTerritoriesdonotlevywithholdingtaxon
interest.
Royalties
A10%withholdingtaxisleviedonroyaltiespaidtoa
nonresident,unlesstherateisreducedoranexemption
appliesunderataxtreaty.

Paymentsmadeforservicesprovidedbynonresidententities
aresubjecttoa10%withholdingtax,unlesstherateis
reducedoranexemptionappliesunderataxtreaty.
84
Other
Paymentsforgoodsandservicesaresubjecttowithholding
taxatratesrangingfrom5%to10%,unlessthepayee
providesataxcertificateissuedbythetaxdepartment.

Capital duty No
Payroll tax
Thereisnopayrolltaxoncorporations.Salariesaretaxed
attheleveloftheindividual.
Real property tax

Taxonpropertyisleviedatarateof17%ontheassessed
valueofrentalincome.Fortypercentofthetaxmaybe
deductedasanexpenseincomputingtaxableincome,with
theremaining60%availableasacreditagainsttheincome
taxliability.
Social security No
Stamp duty No
Transfer tax No
Transfer pricing No
85
Auditedfinancialstatementsandrelatednotes,aswellasa
reconciliationbetweenfinancialincomeandtaxableincome
approvedbyalicensedauditor,mustbeattachedtothe
corporateincometaxreturn.

Tax year
Thetaxyeargenerallyisthecalendaryear.Approvalmustbe
obtainedtouseafiscalyear.
fileaseparatetaxreturn.
Filing requirements
Aself-assessmentregimeapplies.Advancepaymenton
accountoftaxliabilitiesfortheyearmustbemade,andthe
timingandincentivesforearlypaymentaredetermined
basedondirectivesissuedbytheministeroffinance.
Thetaxreturnmustbefiledwithinfourmonthsoftheend
ofthetaxyear.Ifthetaxreturnisfiledwithintwomonthsof
theendofthetaxyear,adiscountof4%isgrantedonthe
balanceoftaxaspertheself-assessment(afterdeductingtax
advancesmadeonwhichadiscountpreviouslywasgranted);
adiscountof2%isgrantedifthetaxreturnissubmitted
duringMarchandAprilofthefollowingyear.
Penalties
Apenaltyequalto3%ofthetaxliabilitypermonth,uptoa
maximumof20%,isimposedforthelatepaymentoftax.The
minimumpenaltyisNIS3,000forcorporations.Penaltiesof
2%ofthetaxliabilitypermonthalsoapplyforthelate
paymentofpayrollandwithholdingtax.
86
Rulings No
Personal taxation
Basis
Palestinianresidentsandnonresidentsaretaxedonlyon
incomesourcedinPalestine.
Residence
Thefollowingindividualsareconsideredtoberesidentin
Palestine:
•Palestinianindividualswhohavelivedinandmaintained
theirprincipalactivitiesinPalestineforatleast120days
duringtheyear;and(2)
•Non-PalestinianindividualswhohaveresidedinPalestine
foratleast183daysduringtheyear.
Filing status
Eachindividualmustfileataxreturnunlesstheindividual’s
onlyincomeisfromemployment.Jointfilingisnotpermitted
unlessapprovedbythetaxdepartment.
Taxable income
Taxableincomecomprisesincomefromallsources(unless
specificallyexemptbylaw),lessallowableexpensesincurred
intheproductionoftheincomeandthestandarddeduction
(seeunder“Deductionsandallowances”).
Capital gains
Capitalgainsaretaxedatregularrates,butcapitalgains
derivedfromthesaleofinvestmentsnotheldfortrading
aretaxexempt.

IndividualincomeisreducedbyastandarddeductionofNIS
36,000peryear.Thereisaone-timedeductionofNIS30,000
87
forthepurchaseofaresidence,orNIS4,000peryearin
interestdeductionsonahomemortgageforamaximum
periodof10years.AuniversityeducationdeductionofNIS
6,000peryearisgrantedforuptotwodependentsat
university.Upto10%ofanindividual’ssalaryistax-exempt
asatransportationcost.
Rates
Individualincometaxischargedatprogressiveratesranging
from5%to15%.ThefirstNIS75,000istaxedat5%,thenext
NIS75,000at10%,andtheremainderat15%.

Capital duty No
Stamp duty No
Real property tax

Taxonpropertyisleviedatarateof17%ontheassessed
valueofrentalincome.Fortypercentofthetaxmaybe
deductedasanexpenseincomputingtaxableincome,with
theremaining60%availableasacreditagainsttheincome
taxliability.
Social security No

88
Filing and payment

Taxonemploymentincomeiswithheldbytheemployerand
remittedtothetaxauthorities.Self-employedindividualsand
employedindividualswithincomefromothersourcesmust
fileaself-assessmentreturnwithinfourmonthsoftheendof
thetaxyear.
Penalties
Penaltiesareimposedforthelatepaymentoftax.
Value added tax

VATisleviedonthesaleofgoodsandtheprovisionof
services,andonimports.
Rates
ThestandardVATrateis16%.Certaintransactionsarezero-
ratedorexempt.Forfinancialinstitutions,VATisleviedata
rateof16%ongrosssalariesandontaxableincome.
Registration
AllentitiesandindividualsmustregisterforVATpurposes;
thereisnominimumthreshold.
Filing and payment

AVATreturngenerallymustbefiledonamonthlybasisor
otherbasis,asrequired.
Source of tax law

IncomeTaxLawNo.8of2011andamendmentsissuedin
2014and2015
Tax treaties
TherearetaxtreatieswithEgypt,JordanandSerbia.
89
Tax authorities
IncomeTaxAuthority,VATAuthority,MinistryofFinance
Deloitte contact
Munther Al Bandak
Partner, Tax
mbandak@deloitte.com
90
Global Employer Services Deloitte | ME Tax handbook 2017
Moving together.
Making tomorrow.

Deloitte | ME tax handbook 2018 | Qatar
Qatar
Investment basics
Currency QatariRiyal(QAR)
Tax regimes
TherearetwotaxregimesinQatar,the“Stateregime,”which
appliestothemajorityofbusinessesoperatinginQatar,and
theQatarFinancialCenter(QFC)(see“Incentives”under
“Corporatetaxation,”below).

State regime IFRS
QFC regime
IFRS,UKGAAP,USGAAPoranystandardsissuedbythe
AccountingandAuditingOrganizationforIslamicFinancial
Institutions

Thesearethelimitedliabilitycompany,publicshareholding
companyandbranchofaforeigncompany.Otherformsof
businessincludethegeneralpartnership,jointpartnership,
limitedsharepartnershipandjointventure.
UndertheQFCregime,100%foreignownershipispossible.
ThecommoncompaniessetupundertheQFCregimeare
thegeneralpartnership,limitedpartnershipandlimited
liabilitypartnership.
Corporate taxation
Residence
AbodycorporateisresidentinQatarifitisincorporated
underQatarilaworifitsheadofficeoritsplaceofeffective
managementisinQatar.Everytaxpayercarryingoutactivities
inQatarmustsubmitanapplicationforataxcardtotheTax
Departmentwithin30daysfromthecommencementof
activities.
92
Basis
Taxisimposedonataxpayer’sincomederivedfromsources
inQatar.EntitieswhollyownedbyQatarisandotherGulf
CooperationCouncil(GCC)countrynationalsareexemptfrom
corporateincometax,butmayberequiredtofiletaxreturns
(seeunder“Complianceforcorporations”).
Taxable income
Broadly,taxableincomerepresentsgrossincomederived
fromsourcesinthestateofQatarlessalloweddeductions
andbroughtforwardlosses.Themaincategoriesofincome
fromQatarsourcesincludegrossincomederivedfrom
activitiescarriedoutinQatar;contractswhollyorpartly
performedinQatar;realestateinQatar;theexploration,
extractionorexploitationofnaturalresourcessituatedin
Qatar;considerationforservicespaidtoaheadoffice,branch
orrelatedcompany;andinterestonloansobtainedinQatar.
Allowableexpensesincludethecostofrawmaterials,
consumablesandservicesrequiredforcarryingoutthe
activities,interestpaidonloansusedintheactivities(except
interestpaidtoarelatedpartyandinterestpaidbyabranch
inQatartoitsheadoffice),salaries,wagesandsimilar
paymentsmadetoemployees,rent,insurancepremiums,
baddebtsanddepreciation(accordingtocertainrates).
UndertheQFCregime,taxableprofitsareclassifiedas
Qatari-sourceiftheyariseinorarederivedfromQatar.
Subjecttocertainconditions,profitsderivedbyan
unregulatedQFCfromservicesprovidedinQatarfor
useoutsideQatarmaybenontaxable.
Dividendsarenotsubjecttotax.
93
Capital gains
Capitalgainsderivedbyacompanyareincludedintaxable
income.ForeigncompaniessellingsharesinQatar-based
companiesaresubjecttotaxonthegainat10%.
Losses
UndertheStateregime,lossesmaybecarriedforwardand
setoffagainstprofitsforuptothreeyears.Thecarrybackof
UndertheQFCregime,lossesmaybecarriedforwardforas
longastheQFCentitycontinuestohaveasourceofincome
withinthetermsofitslicense.
Rate
•10%forboththestateofQatarandQFCregimes
•A35%rateappliestopetroleumactivities
Surtax No
Foreign tax credit

NoforeigntaxcreditisavailableundertheStateregime.The
QFCregimeoffersdoubletaxationreliefandprovidesfor
unilateralcreditrelief.
Participation exemption
NoparticipationexemptionappliesundertheStateregime.
TheQFCregimeallowsataxexemptiononcapitalgainsin
respectofqualifyingshareholdings.

TheQFCregimeallowsforthesetting-upofholding
companies.
94
Incentives
Theseincludeforeigncapitalinvestmentincentivesand
incentivesrelatedtotheQFCregimeandtheQatarScience
andTechnologyPark(QSTP).
UndertheQFCregime(whichisavailabletocompaniesthat
carryoutcertainallowedactivitiesandapplyforalicense)
fullforeignownershipispossibleandincomeistaxableata
flatrateof10%.Specialpurposecompanies(i.e.registered
funds,specialinvestmentfunds,specialfundingcompanies,
alternativeriskvehiclesandcharities)mayelectanexempt
status.Qatari–ownedcompaniesmayelecta0%
concessionaryrateifcertainconditionsarefulfilled.
TheQSTPistheonlyfreezoneinQatartosupportscientific
andappliedtechnologyresearches.Capitalofcompanies
registeredintheQSTPcanbewhollyownedbyforeign
investors,andQSTPentitiesareallowedtotradedirectlyin
Qatarwithoutalocalagent.QSTPentitieswithastandard
licensearenottaxedandmayimportgoodsandservices
freefromQataritaxorcustomsduties.
Withholding tax
ThereisnowithholdingtaxapplicableundertheQFCtax
regime.However,thestateofQatarregimehaswithholding
taxforcertainpayments.Theseareoutlinedbelow.
Dividends
Qatardoesnotlevywithholdingtaxondividends.
Interest
Interestissubjecttoa7%withholdingtax,withcertain
exceptions.Theratemaybefurtherreducedunderatax
treaty.
95
Royalties
Royaltiesaresubjecttoa5%withholdingtax.Certainleasing
chargesmaybeconsideredroyalties.Theratemaybefurther
reducedunderataxtreaty.

Technicalservicefeespaidtoanonresidentaresubjecttoa
5%withholdingtax.
Other
A7%withholdingtaxappliestocommissions,brokeragefees,
directors’fees,attendancefeesandfeesforotherservices
performedinwholeorinpartinQatar.
Aretentiontaxof3%ofthecontractvalueorthefinal
payment(whicheverishigher)appliestopaymentsmadetoa
branchregisteredforaparticularproject(atemporary
branch).

Capital duty No
Payroll tax No
Social security
ForemployeesthatareQatarinationals,theemployermust
contribute10%oftheemployee’sbasicsalaryeachmonth
and5%istobecontributedbytheemployee.
Stamp duty No
Transfer tax No
96
Transfer pricing
UnderthestateofQatarregime,ageneralanti-avoidance
rulegivesthetaxdepartmentthepowertoapplyanarm’s
lengthpriceincertainsituations.Transferpricingrulesapply
intheQFC.
Thin capitalization
NospecificthincapitalizationrulesapplyundertheState
regime,butinterestpaymentsmadebyapermanent
establishmenttoitsheadofficeortorelatedpartiesarenot
deductiblefortaxpurposes.
UndertheQFCregime,thearm’slengthborrowingcapacityof
aQFCtaxpayeristheamountofdebtthatitcouldandwould
havetakenon,asastand-aloneentity,fromanindependent
lender.

Tax year
Thetaxyearisthecalendaryear,butataxpayermayapply
toprepareitsfinancialstatementsfora12-monthperiod
endingonadateotherthanDecember31.Thefirst
accountingperiodmaybemoreorlessthan12months,
butitshouldnotbelessthansixmonthsormorethan18
months.
UndertheQFCregime,thetaxyeargenerallyfollowsthe
accountingperiod.ForQFCtaxpurposes,anaccounting
periodshouldnotexceed12months.
97
Consolidatedreturnsarenotpermitted.Eachcompanymust
fileaseparatetaxreturn.
Filing requirements
UndertheStateregime,taxpayersarerequiredtosubmitan
annualincometaxreturnandpaythetaxduebytheendof
thefourthmonthafterthecompany’sfinancialyear-end.
EntitieswhollyownedbyQatarisandotherGCCnationalsare
exemptfromcorporateincometax,butarerequiredtofile
taxreturnsandauditedfinancialstatementswiththeTax
DepartmentiftheircapitalisQAR2millionormoreoriftheir
annualrevenueisQAR10millionormore.Anonline“tax
administrationsystem”(TAS)hasbeenintroducedwiththe
aimofachievingcompleteautomationofthetaxpayment
andmanagementprocess.TheTASenablesonline
registrationandfilingoftaxreturnsandprogresstracking.
UndertheQFCregime,thedeadlinetosubmittheannual
incometaxreturnandpaythetaxdueisbytheendofthe
sixthmonthafterthecompany’sfinancialyear-end.Thereis
alsoanonlinetaxfilingsystemforQFCentities.
Penalties
UndertheStateregime,failuretofileataxreturnbythe
deadlinewillresultinapenaltyofQAR100perday,uptoa
maximumofQAR36,000.Failuretopaytaxduebythe
deadlinewillresultinapenaltyof1.5%oftheamountoftax
duepermonthofdelayorpartthereof,uptotheamountof
taxdue.
UndertheQFCtaxregime,financialsanctionsvarydepending
onthecircumstances.
98
Rulings
State of Qatar No
QFC Yes
Personal taxation
Basis
Qatardoesnotimposepersonalincometaxation;onlyincome
fromabusinessinQataristaxable.
Residence
AnindividualisresidentinQatarifhe/shehasapermanent
homeinQatar,hasbeeninQatarformorethan183days
duringany12monthperiodorhashis/hercentreofvital
interestsinQatar.
Filing status No
Taxable income
OnlybusinessincomeistaxableinQatar.Thereisnotaxon
employmentincome.
Capital gains
Capitalgainsfromthedisposalofrealestateandsecurities
derivedbyanindividualareexemptfromtax,providedthe
realestateandsecuritiesarenotpartoftheassetsofa
taxableactivity(anygainsfromsuchassetsaretaxableata
10%rate).
Rates
Onlyincomefromabusinessistaxable,atarateof10%of
taxableincome.
99

Capital duty No
Stamp duty No
Social security
AnemployeewhoisaQatarinationalandhasapension
schememustmakeapensioncontributionequalto5%of
his/herbasicsalaryeachmonth.

Tax year No
Penalties No
Value added tax

QatarcurrentlydoesnothaveimplementedVAT,goodsand
servicestaxorsalestaxsystem.However,inlinewiththe
UnifiedVATAgreementoftheGulfCooperationCouncil,VAT
isexpectedtocomeintoforceon1stJanuary2019bythe
latest.ThestandardVATrateisexpectedtobe5%,with
certainexemptedandzerosuppliesofgoodsandservices.
TheregistrationthresholdofapproximatelyUSD100,000
wouldbeapplied.
100
Implementationofaselectiveexcisetaxisalsoexpectedin
2018.
Rates No
Source of tax law

LawNo.21of2009,ExecutiveRegulationsandQatar
FinancialCenterTaxRegulations
Tax treaties
Qatarhasconcluded65taxtreaties.
Tax authorities
MinistryofFinance–TaxesDepartmentandQatarFinancial
Centre–TaxAuthority
Other
On14November2017,Qatarjoinedtheinclusiveframework
onBEPSandsignedtheMultilateralConventiononMutual
AdministrativeAssistanceonTaxMatters.
Deloitte contacts
Muhammad Bahemia
Partner, Tax
mbahemia@deloitte.com
Rami Qudah
Partner, Tax
rqudah@deloitte.com
Robert Tsang
101
Deloitte | ME tax handbook 2018 | Saudi Arabia
SaudiArabia
Investment basics
Currency SaudiRiyal(SAR)

SaudiOrganizationofCertifiedPublicAccountants(SOCPA)
standardsgenerallyareused.Ifanissueisnotcoveredby
SOCPAstandards,IFRSisthestandard.SaudiArabiaisinthe
processoftransitioningtoIFRS.Banksandinsurance
companiesuseIFRS.Listedcompanieswererequiredto
adoptIFRSfromthefinancialperiodbeginningfromJanuary
1,2017,withJanuary1,2016beingthetransitiondatefor
IFRSconvergence(thebeginningoftheearliestcomparative
year).OtherentitiesarerequiredtoadoptIFRSfromthe
financialperiodbeginningfromJanuary1,2018,withJanuary
1,2017beingthetransitiondateforIFRSconvergence.

Thesearethelimitedliabilitycompany(LLC),jointstock
companyandbranchofaforeignentity.
Corporate taxation
Residence
Acorporation(definedinSaudilawasapubliccompany,
limitedliabilitycompanyorpartnershiplimitedbyshares)is
residentinSaudiArabiaifitisregisteredinaccordancewith
theregulationsforcompaniesinSaudiArabiaorifitis
headquarteredintheKingdom.
Basis
Aresidentcorporationistaxedonincomearisinginthe
Kingdom.AnonresidentcarryingoutactivitiesintheKingdom
throughapermanentestablishment(PE)istaxedonincome
arisingfromorrelatedtothePE.
102
SinceSeptember2017,thedefinitionofaresident
corporationthatissubjecttotaxincludesacompanywith
sharesowneddirectlyorindirectlybypersonsengagedinthe
productionofoilandhydrocarbonmaterials;withtheeffect
thatthestate-ownedoilcompanyanditsSaudisubsidiaries
operatinginproductionofoilandhydrocarbonmaterialsare
subjecttotax.Priortothisdate,SaudiandGCCshareholders
involvedinthisbusinessweresubjecttozakat.
Taxable income
Incometaxisleviedonanon-Saudi'sshareinaresident
corporation;zakatisleviedonaSaudi'sshare.CitizensofGulf
CooperationCouncilcountries(GCC)aretreatedasSaudis.
Thetaxbaseforaresidentcorporationisthenon-Saudi’s
shareofincomesubjecttotaxfromanyactivityinSaudi
Arabia,lessallowableexpenses.Thetaxbasefora
nonresidentcarryingoutactivitiesinSaudiArabiathrougha
PEistheincomearisingfromtheactivitiesofthePE,less
allowableexpenses.
Thetaxbaseofacorporationisdeterminedindependently
fromitsshareholders,partnersorsubsidiaries,irrespective
ofwhetherthecorporationisconsolidatedforaccounting
purposes.
Thetaxbaseofpersonsengagedintheproductionofoil
andhydrocarbonmaterialswillbetheirtaxableincome,less
expensesallowedinaccordancewiththetaxlegislation.
Dividendsreceivedaretaxedasincome.
Anexemptionisavailableforcashorin-kinddividends
receivedbyaSaudiresidentcorporationwhichownsatleast
10%ofthepayercompanyforatleastoneyear.
103
Capital gains
A20%capitalgainstaxisimposedonthedisposalofshares
inaresidentcompanybyanonresidentshareholder.Capital
gainsarisingonthedisposalofsecuritiestradedonastock
exchangeoutsidetheKingdomareexemptfromcapitalgains
taxprovidedthesecuritiesalsoaretradedontheSaudistock
exchange,irrespectiveofwhetherthedisposalwasmadevia
astockexchangeorthroughothermeans.
Nogainorlossarisesonthetransferofassetsbetween
groupcompaniesprovidedthatthecompaniesarewholly
owneddirectlyorindirectlywithinthegroupandtheassets
arenotdisposedofoutsidethegroupfortwoyearsfromthe
dateoftransfer.
Losses
Taxlossesmaybecarriedforwardindefinitely,providedthe
maximumamountdeductedineachtaxyeardoesnot
exceed25%oftheannualtaxableprofits,asreportedonthe
taxreturn.Corporationsareabletocarryforwardlosses,
irrespectiveofwhethertherehasbeenachangein
ownershiporcontrol,providedtheycontinuetoperform
thesameactivity.Atransferofassetswithinagroupof
companiesisnotconsideredasachangeinownershipor
control.Thecarrybackoflossesisnotpermitted.
Rate
Thecorporateincometaxrateis20%onanon-Saudi’s
shareinaresidentcorporationandonincomederivedbya
nonresidentfromaPEinSaudiArabia.Therateontaxpayers
workingintheexploitationofnaturalgassectoris30%.The
taxrateontaxpayersengagedintheproductionofoiland
hydrocarbonsisdeterminedonthebasisofthecompany’s
capitalinvestment,asfollows:85%wherethecapital
investmentisUSD60billionorless;75%wherethecapital
investmentisbetweenUSD60billionandUSD80billion;65%
wherethecapitalinvestmentisbetweenUSD80billionand
104
USD100billion;and50%wherethecapitalinvestment
exceedsUSD100billion.
Capitalinvestmentisdefinedasthetotalcumulativevalueof
fixedassets,whethertangible(e.g.equipment,machinery,
etc.)orintangible,includingexploration,drillingand
developmentexpenses.
Zakatisassessedat2.5%onthehigherofthezakatbaseand
thenetadjustedprofitofaSaudishareholder.
Surtax No

TheprofitsofaSaudiresidentsubsidiaryremittedtoits
Saudiresidentholdingcompanywillnotbetaxed,provided:
•Thereisaminimumholdingof10%;
•Theinvestmentisheldforatleastoneyear;and
•TheincomeofthesubsidiaryissubjecttotaxinSaudi
Arabia.Limitedrulesalsoexistforgroupswhollysubjectto
zakat.
Incentives
Thegovernmentgrants10-yeartaxincentivesoninvestments
inthefollowingsixunderdevelopedprovinces:Hail,Jizan,
Abha,NorthernBorder,NajranandAl-Jouf.Investorswillbe
grantedataxcreditagainsttheannualtaxpayableinrespect
ofcertaincostsincurredonSaudiemployees.
105
Withholding tax
Dividends
A5%withholdingtaxisleviedondividendspaidtoa
nonresident,unlesstherateisreducedunderataxtreaty.
Interest
A5%withholdingtaxisleviedoninterestpaidtoa
Royalties
A15%withholdingtaxisleviedonroyaltiespaidtoa

A5%withholdingtaxisleviedontechnicalservicefeespaid
toanonresidentthirdparty,unlesstherateisreducedunder
ataxtreaty;a15%withholdingtaxrateappliestotechnical
servicefeespaidtorelatedparties.

A5%withholdingtaxisimposedontheremittanceofprofits
abroad.

Capital duty No
Payroll tax No
Real property tax

No,buta2.5%landtaxappliesonallundevelopedland
withinurbanboundaries.
Social security
ForSaudiemployees,theemployermustcontribute12%of
theemployee'ssalarytotheGeneralOrganizationforSocial
Insurance(GOSI),andtheemployeecontributes10%.The
106
employeralsopaysaccidentinsuranceequalto2%ofthe
salariespaidfornon-Saudiemployees.
Stamp duty No
Transfer tax No
Excise duty
ExcisetaxwasintroducedasfromJune11,2017andis
chargeableontheimportationorproductionofexcisable
goodsreleasedforconsumptioninSaudiArabia.Theexcise
dutyrateis50%onsoftdrinksand100%onenergydrinks
andtobaccoproducts.Anypersonintendingtoimport,
produceorhold(underasuspensionarrangement)any
excisablegoodsinSaudiArabiamustregisterforexcisetax.
AnypersonholdingexcisablegoodsvaluedinexcessofSAR
60,000(whetherornototherwiseregisteredorrequiredto
register)mustsubmitaone-offtransitionalreturnandpay
theexcisetaxduewithin45days.Thereafter,those
registeredforexcisetaxmustsubmitreturnsreportingtheir
totalexciseliabilitiesonabimonthlybasis(i.e.onereturn
everytwocalendarmonths)togetherwithpaymentwithin
15daysoftheendofthetaxperiod.
Transfer pricing
Sauditaxlawdoesnotcontainanydetailedtransferpricing
regulationsorguidelines.However,relatedpartytransactions
andthearm’slengthprinciplearecoveredundercertain
generalanti-avoidanceprovisions.Thegeneralanti-avoidance
measuresprovideforthefollowing:
•Transactionsbetweenrelatedpartiesmustbeconducted
onarm’slengthterms;
•Theexcessofthecostofmaterialssuppliedorservices
providedbyrelatedpartiesoverthepricesusedby
independentpartieswillbedisallowed;and
•Taxpayersshouldmaintaindocumentationtosupport
theprecisedeterminationoftaxpayable.
107
TheSauditaxauthoritiesmaychallengeanytransactionand:
•Disregardatransactionthathasnoeconomiceffect;
•Reclassifyatransactionwhoseformdoesnotreflectits
substance;
•Reallocateincomeandexpensesbetweenrelatedparties
orpartiesundercommoncontroltoreflecttheincome
thatwouldhaveresultedfromatransactionbetween
independentandunrelatedparties;and
•Estimatetheappropriatetaxbaseandimposepenalties.
Takentogether,theaboveprovisionsempowertheSauditax
authoritiestoexaminerelatedpartytransactions,request
relevantdocumentationandadjustincomeorexpenses
basedonthearm’slengthstandardwhich,attimes,may
differfromtheOECDstandards,dependingonthelocal
practices.AlthoughtheOECDtransferpricingguidelines
generallyaretakenintoaccountinexaminingthearm’s
lengthnatureofrelatedpartytransactions,theyarenot
bindingontheSauditaxauthorities.
Thin capitalization
SaudiArabiadoesnothavespecificthincapitalization
rules,butthereisarulelimitingthedeductibilityofinterest
expensetothelesserof:(i)theactualinterestexpense,or(ii)
interestincome,plus50%oftaxableincome(excluding
interestincomeandinterestexpense).
Other
Therearegeneralanti-avoidanceprovisionsinthetaxlaw;
seeaboveunder“Transferpricing.”
108

Tax year
Thetaxyearisthestate’sfiscalyear.Thetaxableyearof
ataxpayerstartsfromthedateitobtainsacommercial
registrationorlicense,unlessotherdocumentssupport
adifferentdate.
Ataxpayermayuseadifferenttaxyearinthefollowing
circumstances:
•ThedifferentyearwasapprovedbytheDirectoratebefore
theeffectivedateoftheincometaxregulations;
•ThetaxpayerusesaGregorianfinancialyear;or
•Thetaxpayerisamemberofagroupofcompaniesora
branchofaforeigncompanythatusesadifferentfinancial
year.
Consolidatedreturnsmustbefiledforzakatandinthecase
ofwhollyownedsubsidiaries.However,zakatreturnsofthe
subsidiariesarefiledforinformationpurposes.Consolidated
returnsarenotpermittedforincometaxpurposes.
Filing requirements
Taxreturnsforacorporationmustbefiledonlinewiththe
taxauthoritieswithin120daysfromthefiscalyear-end.A
taxpayerwhosetaxableincomeexceedsSAR1millionbefore
thedeductionofexpensesmusthavetheaccuracyofthe
returncertifiedbyalicensedcertifiedaccountant.
Additionally,auditedfinancialstatementsmustbefiledwith
theMinistryofCommercewithin120daysoftheyear-end.
Penalties
Thepenaltiesforfailuretofileataxreturnarethehigherof
1%ofrevenue(uptoamaximumofSAR20,000),orbetween
5%and25%oftheunsettledtax,dependingonthelengthof
thedelay.Inaddition,thereisafineof1%oftheunsettled
taxforevery30days’delayinsettlement.
109
Rulings No
Personal taxation
Basis
Thereisnopersonalincometax(employmenttax)inSaudi
Arabia;however,nonresidentsconductingbusinessinthe
KingdomorderivingincomefromaPEinSaudiArabiaare
taxedasdescribedaboveunder“Corporatetaxation.”
Residence
AnindividualisresidentinSaudiArabiaforataxyearif:
•He/shehasapermanentresidenceintheKingdomandis
presentintheKingdomforaperiodofatleast30daysin
totalinthetaxyear;or
•He/sheispresentintheKingdomforaperiodofatleast
183daysinthetaxyear.
Filing status
Onlyindividualsthatcarryonabusinessorprofessionare
requiredtofileataxreturn.
Taxable income
Theconceptoftaxableincomeisonlyapplicablefor
individualsthatcarryonabusinessorprofession,whoare
subjecttothesamerulesascompanies.
Capital gains
A20%capitalgainstaxisimposedonthedisposalofshares
inaresidentcompany.Capitalgainsonthedisposalofshares
tradedontheSaudistockexchangearetaxexemptifthe
shareswereacquiredafter2004.

No,exceptforindividualsthatcarryonabusinessor
profession.
Rates
Individualscarryingonabusinessorprofessionaretaxedat
110
thesamerateascompanies,i.e.20%.

Capital duty No
Stamp duty No
Net wealth/net worth tax

ZakatisleviedontheregisteredbusinessesofSaudis.
Social security
Saudiemployeesmustcontribute10%ofsalarytotheGOSI;
theemployercontributes12%.
Expatriate levy
AnannualdependentlevyofSAR1,200appliesasfromJuly
2017perexpatdependentresidinginSaudiArabia.This
amountincreasestoSAR2,400fromJuly2018,SAR3,600
fromJuly2019andSAR4,800fromJuly2020.

Tax year No
Penalties No
Value added tax

VATwasintroducedasfromJanuary1,2018andtheVAT
systemiscloselyalignedtotheinternationalVATmodelsused
111
inmanyOECDcountries.VATappliestoalmostallsuppliesof
goodsorservices,subjecttolimitedexceptions.Thereare
somereduced/zeroratesthatapplytofood,educationand
healthcare.
Rates
ThestandardrateofVATis5%.Certaingoodsandservices
arezero-ratedinaccordancewiththeGCC’sFramework
Agreementwhichspecifiessomemandatoryareasforzero-
ratinginallsixGCCMemberStates(includingexportsof
goodsandservicesoutsidetheGCC,andthesupplyof
qualifyingmedicines,medicalgoodsandinvestmentmetals).
Registration
ThestandardVATregistrationthresholdisanannualturnover
ofSAR375,000.However,businesseswithanannualturnover
oflessthanSAR1millionareexemptfromthemandatory
registrationrequirementuntil1January2019.Businesses
whodonotapplyforregistrationwithinthespecifiedperiod
aresubjecttoafineofSAR10,000.
Filing and payment

VATtaxperiodsmaybemonthlyorquarterly.Taxpayers
mustcalculatethenetVATfortheperiodandsubmitthe
VATreturnelectronicallybytheendofthefollowingmonth,
togetherwiththepaymentrequired.VATreportingcanbe
carriedoutona“cashaccounting”basisforsmallbusinesses
withturnoveroflessthanSAR5million.Businesseswith
annualturnoveroflessthanSAR40millionmayusea
quarterlyfilingperiod.
Source of tax law

IncomeTaxRegulations(Muharram1425HMarch2004)
112
Tax treaties
SaudiArabiahasconcluded47taxtreaties.
Tax authorities
GeneralAuthorityofZakatandTax(GAZT)
Deloitte contact
Nauman Ahmed
Senior Director, Tax
Al Khobar
Middle East Tax Leader
nahmed@deloitte.com
Nasser AlSagga
Partner, Tax
Al Khobar
nsagga@deloitte.com
Farhan Farouk
Jeddah
ffarouk@deloitte.com
Wissam Merhej
Riyadh
wmerhej@deloitte.com
Michael Camburn
Senior Director, Indirect Tax
Saudi Arabia
mcamburn@deloitte.com
113
Deloitte | ME tax handbook 2018 | Syria
Syria
Investment basics
Currency SyrianPound(SYP)

Foreigncurrencymaynotbetransferredabroadunlessitwas
originallyimportedfromoutsideSyria.

CorporationsuseSyrianGAAP.Banks,insurancecompanies,
investmentcompaniesestablishedunderLegislativeDecree
No.8andallcompaniessupervisedbytheCommissionof
FinancialMarketsandSecuritiesuseIASandIFRS.Financial
statementsmustbefiledannually.Semi-annualandquarterly
statementsmustbesubmittedbybanks,insurance
companiesandcompaniessupervisedbythecommission.

generalpartnership,limitedpartnership,companylimitedby
shares,jointventureandbranchofaforeigncompany.
Corporate taxation
Residence
Anentitywhoseprincipalactivitiesareadministeredthrough
Syria,anentitythatadoptsSyriaasitsheadquartersand
branchesorofficesofforeigncompaniesthatoperatein
Syriaareconsideredresidentfortaxpurposes.
Basis
Syriaoperatesaterritorialtaxsystem.Anentityisliablefor
taxonincomearisingfromSyriansourcesoractivities,
regardlessofresidencestatus.Incomederivedfromnon-
SyriansourcesoractivitiesisnottaxableinSyria.
114
Taxable income
Incometaxappliestotheprofitsofcompanies,including
gainsonthedisposalofbusinessassets.
DividendspaidbyaSyriancorporationonpreviouslytaxed
incomearenotsubsequentlytaxedupondistributionto
anothercompany.Dividendspaidbyanonresident
corporation,however,aresubjecttotaxupondistribution
inSyriaatarateof7.5%.
Capital gains
Capitalgainsderivedbyacompanyareincludedintaxable
incomeandtaxedatthenormalcorporatetaxrate,except
forgainsonrealproperty,whicharesubjecttotaxatarate
rangingbetween15%and30%ofthe“registered”value.
Losses
Lossesmaybecarriedforwardforfiveyears.Thecarryback
oflossesisnotpermitted.
Rate
Ratesareprogressivefrom10%to28%.Specificrates
include:22%forjointstockandlimitedliabilitycompanies;
14%forjointstockcompaniesthatoffermorethan50%of
theirsharestothepublic;15%forinsurancecompaniesthat
offeratleast51%oftheirsharestothepublic;and25%for
privatebanksandinsurancecompanies.
Surtax
Alocaladministrationtaxisimposedthatrangesfrom4%to
10%,dependingontheregion.
Atemporaryreconstructionfeeof5%isimposedonalldirect
andindirecttaxes(exceptpayrolltax).
115
Incentives
Incentivesaregrantedundertheinvestmentlaws,infree
zones,forcertainindustrialprojectsandfortourism.
Withholding tax
Dividends
DividendspaidbyaSyriancorporationfrompreviouslytaxed
incomeareexemptfromtaxupondistribution.
Interest
Interestpaidtoanonresidentissubjecttoa7.5%withholding
tax.
Royalties
Royaltiespaidtoanonresidentaresubjecttoa5%
withholdingincometax,aswellasa2%withholdingpayroll
tax.

Technicalservicefeesaresubjecttoawithholdingtaxof7%
(5%asincometaxand2%aspayrolltax).

Capital duty
TaxmustbepaidtotheCommissiononFinancialMarkets
andSecuritiesonaninitialpublicofferingorasubsequent
116
capitalincrease.ThetaxiscalculatedasthesumofSYP
250,000,plus0.1%ofthepubliclyissuedcapital,uptoa
maximumofSYP1million.Astampfeeof0.4%%ofthe
capitalalsomustbepaidupontheestablishmentand
registrationofacorporation.Thestampfeeisreducedby
50%ifthecompanyoffersmorethan50%ofitssharesto
thepublic.
Payroll tax
Theemployermustwithhold5%to22%ofsalary.
Real property tax

Taxonrealestaterangesfrom14%to60%,dependingon
thetypeofproperty.
Social security
Theemployerisrequiredtomakesocialinsurance
contributionsof17.1%ofpayrollcostsasfollows:14%to
coveroldage,disabilityanddeathbenefits;3%tothework
injurybenefitsscheme;and0.1%toalump-sumdisability
benefitsfund.
Stamp duty
Stampdutygenerallyisimposedontransactions,suchas
theformationofcorporations,theexecutionofdocuments,
licenses,contracts,etc.,atratesrangingfrom0.3%to0.7%.
Seealsoaboveunder“Capitalduty”.
Transfer tax
Transfertaxvariesaccordingtothetypeofpropertyandtype
ofownershiptransfer.
Transfer pricing No
117

Filing requirements
Thetaxreturnforlimitedliabilityandjointstockcompanies
mustbesubmittedbyMay31(March31forothertypesof
companies).Paymentoftaxisduewithin30daysofthefiling
deadline.
Payrollwithholdingtaxmustbesubmittedbytheemployer
onasemi-annualbasis.
Penalties
Apenaltyisassessedforlatepaymentoftaxatarateof10%
annually,upto30%ofthetaxliability.
Rulings No
Personal taxation
Basis
AnindividualisliableforSyriantaxonincomearisingfrom
sourcesoractivitiesinSyria,regardlessofhis/herresidence
statusinSyria.Incomederivedfromnon-Syriansourcesor
activitiesisnottaxableinSyria.
Wagesandsalariestaxisimposedonanindividualwho
derivesincomefromaprivatetreasuryifhe/sheisSyrian-
118
residentoriftheamountpaidiscompensationforservices
provided;orfromapublictreasury,regardlessofresidence
statusinSyria.
Residence
AnationalofSyriaoranAraborforeignpersonlegally
residinginSyriaareconsideredresidentfortaxpurposes.
Filing status
Eachindividualmustfileareturn;jointfilingisnotpermitted.
Taxable income
Grossincomeisbasedontheactualamountofsalariesand
wages,specialassignedamounts,bonusesandallmonetary
orin-kindbenefits.
Capital gains
Thereisnospecificcapitalgainstaxforindividuals.Taxis
paidonthesaleordispositionofpropertyatratesthatvary
dependingonthetypeoftransaction.

Deductionsareallowedforcertainexpenses,suchaswork
travelandbusinessexpenses.
Rates
Taxisleviedatprogressiveratesrangingfrom5%to22%
onmonthlysalaries,withthefirstSYP15,000exempt.
Nonregularbenefitspayments(e.g.bonuses)aresubjectto
taxatarateof10%.

Capital duty No
119
Stamp duty
Stampdutygenerallyisimposedontheexecutionof
documents,licenses,contracts,etc.atratesrangingfrom
0.3%to0.7%.0.3%to0.7%.

Real property tax

Taxonrealestateproceeds(estimatedrentalamount)ranges
from14%to60%,dependingonthetypeofproperty.
Inheritanceandgifttaxrangesfrom5%to75%.
Social security
Anemployee’sshareofthesocialsecuritycontributionis7%
ofbasicsalary.

Filing and payment

AnindividualmustsubmitanannualreturnbyMarch31and
paytaxdueatthattime.Individualemployees’payrolltaxis
withheldonamonthlybasisbytheemployerandsubmitted
semi-annuallytothetaxauthorities.
Penalties
Apenaltyisassessedforlatepaymentoftaxupto30%ofthe
taxliability(10%foreachyearforuptothreeyears).
120
Value added tax

WhilethereisnoVATinSyria,consumptiontaxesare
imposedoncertainservicesandimportedluxurygoods.
Rates 1.5%to40%
Registration
Taxpayersarerequiredtoregisterforconsumptiontax
purposes.
Filing and payment

TaxiswithheldbythepartyprovidingaserviceorCustoms
(forimportedservices)andpaidmonthlytotheMinistryof
Finance.
Source of tax law Income

IncomeTaxLaw24,ratifiedbyLawsNo.51and60
Tax treaties
Syriahasconcludedmorethan20taxtreaties.
Tax authorities
MinistryofFinance
Deloitte contact
Laila Al Samman
Partner, Tax
lalsamman@deloitteme.com
121
Deloitte | ME tax handbook 2018 | UAE
UAE
Investment basics
Currency UAEDirham(AED)

IAS/IFRS.Financialstatementsgenerallyarerequiredtobe
preparedannually.

Thesearethelimitedliabilitycompany,private/publicjoint
stockcompany,branchandrepresentativeoffice.
Foreignersgenerallymayonlyownupto49%ofaUAE
mainlandregisteredcompany,althoughtheymayincrease
theirshareholdingto100%inrespectofcompaniessetupin
freetradezones.
Corporate taxation
Residence
Emirate-levelincometaxdecrees(see“Basis”below)do
notcontainspecificprovisionsinrelationtocorporatetax
residency.Therefore,thereisnoclearlegalconceptof
corporatetaxresidencyintheUAE.Nevertheless,the
MinistryofFinance(MOF)issuestaxresidencycertificates
tocompaniesthatareincorporatedinandmanagedfrom
theUAEandmeettherequirementsof:
•TheMOF(e.g.foraleastoneUAEresidentdirector,afixed
placeofbusiness,etc.)and
•Arelevanttaxtreaty,ifappropriate.
Basis
Incometaxdecreeshavebeenissuedbyfiveoftheseven
Emirates(i.e.AbuDhabi,Dubai,Sharjah,Ajman,UmmAl
Quwain,RasAlKhaimahandFujairah),butcurrentlyonlyare
enforcedinrespectofoilandgasexplorationandproduction
122
companiesandcertainpetrochemicalcompaniesunder
specificgovernmentconcessionagreements.Branchesof
foreignbanksarealsosubjecttocorporateincometaxunder
separatebankingtaxdecreesincertainEmirates.
Taxable income
Therearecurrentlyinpracticenotaxesleviedontheincome
ofthevastmajorityofbusinessesintheUAE,exceptforoil
andgasexplorationandproductioncompanies,certain
petrochemicalcompaniesandbranchesofforeignbanks.
Therelevantapplicableincometaxandbankingtaxdecrees
includebasicdeductibilityrulesthatneedtobetakeninto
accountwhendeterminingtaxableincome.
Taxation of dividends No
Capital gains
Capitalgainsarenottaxable,unlessderivedbyacompany
whichistaxableunderanyoftheincometaxorbankingtax
decrees.
Losses
Generallynotapplicable,otherthanforcompaniestaxable
underanyoftheincometaxdecrees(whichprovideforlosses
tobecarriedforwardindefinitely)orthebankingtaxdecrees
(underwhichlossesmaybecarriedforwardfortwoyears).
Rate
Oilandgasexplorationandproductioncompaniesaretaxed
atprogressiveratesofupto55%undertheapplicable
Emirate-leveltaxdecree,althoughinpractice,differentrates
maybeagreedwiththerelevantauthorityunderspecific
governmentconcessionagreements.
Branchesofforeignbanksaretaxedatratesagreedwiththe
ruleroftheEmirateinwhichtheyoperate,generallyataflat
rateof20%.
123
Surtax No
Incentives
TheUAEhasestablishedseveralfreetradezoneswhichoffer
benefitsincluding:(renewable)15-50yeartaxholidays,no
restrictionsonforeignownership,norestrictionsoncapital
andprofitrepatriation,andanexemptionfromimportduties
ongoodsbroughtintothefreetradezone.
Withholding tax
TherearenowithholdingtaxesintheUAE.

Capital duty
No;however,limitedregistration/notaryorattestationfees
mayapply.
Payroll tax

No,butsee“Socialsecurity”below.
Real property tax

No,butsee“Transfertax”and“Other”below.
Social security
Socialsecuritycontributionsaredueonlyinrespectof
nationalsoftheGulfCooperationCouncilcountries(Bahrain,
Kuwait,Oman,Qatar,SaudiArabiaandUAE).ForUAEnational
employees,theemployerandemployeepensioncontribution
124
ratesare12.5%and5%respectivelyandcontributionsare
basedonthemonthlycontractualsalary,includingbasic
allowances,asagreedinthelocalemploymentcontract.The
contributionratesandbasesforotherGCCnationalsvary,
butbroadlyareinlinewiththoseforUAEnationals.
UnderUAElaborlaw,non-GCCnationalemployeesare
entitledtoanend-of-servicebenefit(EOSB)iftheir
employmentcontractisterminatedaftercompletionofat
leastoneyearofservice.EOSBispayablebytheemployer
andcalculatedas21daysperyearofbasicwageforthefirst
fiveyearsofemploymentplus30daysperyearofbasicwage
foreachadditionalyearofservice,subjecttoamaximum
EOSBpaymentoftwoyears’remuneration.

Stamp duty
No,althoughfreetradezonesgenerallychargecompanies
operatingwithinthezoneanadministrativefeeforatransfer
ofsharesinotherUAEcompanies.
Transfer tax

Atransferchargeisleviedonthedirectand,inspecific
circumstances,indirecttransferofrealpropertysituatedin
theUAE(e.g.atransferofsharesinacompanyholdingreal
estatesituatedintheUAE).Thechargealsoisleviedon
partialtransfersundercertaincircumstances.
ThetaxratevariesaccordingtotheEmirateinwhichthe
propertyissituated.FortheEmirateofDubai,therateis
4%,borneequallybythebuyerandtheseller(althoughin
practice,thebuyerisgenerallyresponsibleforpayingthe
transferfee).
Excise tax
FromOctober1,2017,excisetaxispayableonthe
importation,manufactureandstockpilingofexcisablegoods,
125
whichincludecarbonatedbeverages,energydrinksand
tobacco.
Other
Municipaltaxesareimposedoncertainhotelandleisure
servicesandpropertyrentals.
Inthecaseofpropertyrentals,certainEmirateschargea
municipalityfeeontheannualrentalvalueoftheproperty,
whichvariesaccordingtotheEmirateinwhichtheproperty
issituated.FortheEmirateofDubai,amunicipalityfeeof
10%isleviedoncommercialproperties.Thefeeisincluded
proportionallyinthemonthlyutilitybillsfortheproperty.
Transfer pricing No
Annualauditedfinancialstatementspreparedonthebasis
ofIFRS/IASmustbefiledwiththeMinistryofCommerceby
businesseslocatedoutsidethefreetradezones.
Entitieslocatedwithinafreetradezonereporttothefree
tradezoneauthorityfortherelevantzoneandgenerally
arerequiredtosubmitauditedfinancialstatementsin
accordancewithIFRS/IASannually.

Therearenosignificanttaxcomplianceobligationsfor
businessesbasedintheUAE.
126
Personal taxation
Residence
TherearenotaxlawscoveringindividualsintheUAEand,
asaresult,nodomesticconceptofpersonaltaxresidence.
Nevertheless,theMOFissuestaxresidencecertificatesto
individualswhosatisfytherequirementsof:
•TheMOF(includingphysicalpresenceintheUAEofmore
than180dayswithinany12-monthperiod)and
•Arelevanttaxtreaty,ifappropriate.
Basis
Individualsarenottaxedontheirincome.

Capital duty No
Stamp duty No
Real property tax

Inthecaseofaresidentialrental,certainEmiratescharge
amunicipalityfee,whichvariesaccordingtotheEmiratein
whichthepropertyissituated.FortheEmirateofDubai,a
municipalityfeeof5%isleviedontheannualrentalvalue
ofresidentialpropertyandisincludedproportionallyinthe
monthlyutilitybillsfortheproperty.
Thereisnoinheritancetaxregime.Intheabsenceofa
registeredwill,inheritanceisdealtwithinaccordancewith
IslamicShari’aprinciples.
127
Social security
SocialsecuritycontributionsarepayableonlyforGCC
nationals.

Therearenocomplianceobligationsforindividualsinthe
UAE.
Value added tax

VATwasintroducedintheUAEasfromJanuary1,2018and
isoverseenbytherecentlyestablishedFederalTaxAuthority.
VATappliesonabroadbaseofgoodsandserviceswithsome
verylimitedexceptions.
Rates
Thestandardrateis5%;certainsuppliesofgoodsand
servicesarezero-ratedorexemptfromVAT.
Registration
Registrationismandatoryfortaxablepersonsresident
intheUAEwhosetaxablesuppliesexceedAED375,000
(USD100,000)ina12-monthperiodorareexpectedto
exceedAED375,000withinthenext30days.Voluntary
registrationthresholdcanbemetifeithertaxablesupplies
exceedAED187,500,orifexpensessubjecttoVATexceed
thatamount.Nothresholdappliestononresidents,asa
result,thiscouldhavetheeffectthattheymayberequired
toregisterundercertaincircumstances.
Filing and payment

VATreturnsgenerallyarerequiredonamonthlyorquarterly
basisdependingonturnover,buttheFTAmayspecifya
longerorshorterperiodifitconsidersthattobeappropriate.
ReturnsmustbefiledonlineviatheFTAportalbythe28th
128
day(ornextworkingdayifthe28thdayfallsonaweekend
ornationalholiday)ofthemonthfollowingtheendofthe
reportingperiod.Forsometaxpayersrequiredtofile
quarterlyreturns,thefirstfilingperiodisdeferredandruns
fromJanuary1toMay31,2018,withtheVATreturnforthat
periodduetobefiledbyJune28,2018.Subsequentfilings
thenwillhavetobemadeonaquarterlybasis(i.e.fromJune
1toAugust31,September1toNovember30andDecember
1toFebruary28/29).AnyVATpayableforthereporting
periodisdueonthereturnfilingdateandpaymentsare
madeonlineviathee-Dirhamwebsite.
Source of tax law

FederalTaxProceduresLaw,FederalLawforPensionand
SocialSecurity,VATLaw,ExciseTaxLaw,ExciseExecutive
RegulationsandtheIncomeTaxDecreesoftherelevant
Emirates.
Tax treaties
TheUAEhasconcludedmorethan70taxtreaties.
Tax authorities
MinistryofFinance,FederalTaxAuthorityandGeneral
PensionandSocialSecurityAuthority.
Deloitte contact
Alex Law
Partner, Tax
Mark Junkin
majunkin@deloitte.com
Bruce Hamilton
brucehamilton@deloitte.com
129
Deloitte | ME tax handbook 2018 | Yemen
Yemen
Investment basics
Currency YemeniRiyal(YER)

IFRSisused.BanksuseIFRSandinstructionsissuedbythe
centralbank.

limitedpartnershipbyshares,limitedpartnershipandbranch
ofaforeignentity.
Aforeignermayownupto100%ofalocalcompany
registeredinaccordancewiththeRegulationsforCompanies
inYemen,andcarryoutservicesorcommercialbusinessin
Yemen.Theshareholdingmaybeupto100%forcompanies
setupunderFreeZoneLawNo.4/1993andInvestmentLaw
No.15of2010.
Corporate taxation
Residence
AcorporationisresidentinYemenifitisregisteredin
accordancewiththeRegulationsforCompanies,is
headquarteredinYemen,hasitsplaceofbusinessor
managementinYemen,isaneconomicsectorunit(i.e.50%
ofthecapitalisownedbythestateorapubliclegalperson)
inYemenorisaconcessioncompanyoperatinginYemen.
Basis
Thetaxlawclassifiestaxpayersaslarge,mediumandsmall,
withaspecialregimeapplyingtosmalland“micro”firms.
Aresidentcompanyisliabletotaxonworldwideprofits.A
nonresidentissubjecttotaxonlyonYemen-sourceprofits.
130
Taxable income
Corporationtaxisimposedontaxableincome,whichconsists
ofincomefrommanufacturing,servicesandtradingactivities,
lessallowabledeductions.
Dividendincomereceivedbyalegalentityfromapublic
companyisexempt.
Capital gains
Capitalgainsaretaxedasnormalbusinessincomeandare
subjecttotaxatthenormalcorporaterate.
Losses
Losscarryforwardsmaybeusedinthefiveyearsfollowing
thelossifthetaxpayerprovidesataxdeclarationcertified
byacharteredaccountantbasedonproperbooksand
accounts.Restrictionsapplyiftherehasbeena100%
changeintheownershipofthecompany.
Rate
Thestandardcorporatetaxrateis20%.A50%rateapplies
tomobilephoneservicesproviders,andtherateis35%
forinternationaltelecommunicationsservicesproviders,
cigarettemanufacturersandimporters.Concession
companiesengagedintheexploitationofoilandgaspaya
fixedtax,normally3%onexpenditureincurredduringthe
explorationphase,asperarelevantproductionsharing
agreement.Therateoninvestmentprojectsregistered
undertheinvestmentlawis15%.
Smallfirms(i.e.firmswhoseannualturnoverismorethan
YER1.5millionbutlessthanYER20millionandthathave
betweenthreeandnineemployees)aresubjectto
progressiveratesrangingfrom10%to20%,depending
onthetypeofactivities.
131
Microentities(i.e.entitieswhoseannualturnoverislessthan
YER1.5millionandthathavefewerthanthreeemployees)
areexemptfromtax.
Surtax No
Foreign tax credit

Aforeigntaxcreditisavailabletotheextentoftaxpaid
overseas.
Incentives
The2010incometaxlawabolishedallincentivesand
exemptionsavailableunderotherlaws,althoughexemptions
grantedunderthepreviousinvestmentlawremainineffect
untiltheexemptionperiodexpires.The2010lawprovidesfor
accelerateddepreciationatarateof40%ofthecostofassets
inthefirstyearofuse,inadditiontonormaldepreciation.
Aspecialtaxstabilizationagreementappliestothefirstfive
yearsofaminingsectorprojectwhentheinvestmentexceeds
USD150million.
Withholding tax
Dividends
Nowithholdingtaxisleviedondividendspaidtoaresident
entity,butdividendspaidtoanonresidententityaretaxedat
arateof10%.
Interest
Nowithholdingtaxisleviedoninterestpaidtoaforeignbank
132
approvedbytheYemenicentralbank;otherwise,therate
is10%.
Royalties
A10%withholdingtaxappliesonpaymentsmadetoa
nonresidentinrespectofcommissions,patents,trademarks
andcopyrightroyalties.

A10%withholdingtaxappliesonfeespaidforthetransfer
oruseoftechnology/licenses,paymentsfortechnicalknow-
howandadministrativeknowledgeandservicefeespaidto
anonresident.The10%ratealsoappliestopaymentsmade
toaresidentornonresidentinrespectofbrokerageand
commissions.Therateis3%forfeespaidtoresident
technicalandprofessionalservicesproviders.

Capital duty No
Payroll tax
Payrolltaxisimposedonslabsofincomeatratesranging
from10%to20%;however,theprogressiverateonthe
salariesofresidentemployeesceasesat15%.Theemployer
deductstaxfromthesalaryandremitsittothegovernment
onbehalfoftheemployee.
Acompanyalsoisrequiredtopayavocationaltrainingfund
(educationfees)feeequalto1%oftotalpayrolltothe
MinistryofVocationalTraining.
Real property tax

Anannualtaxisleviedontherentalvalueofrealpropertyin
anamountequaltoonemonth’srent,anda1%taxislevied
133
onincomefromthesaleoflandandconstructedproperty
andlandpreparedforconstruction.
Social security
Theemployermustcontribute9%ofanationalorforeign
employee'ssalarytotheGeneralCorporationforSocial
Security(GCSS);theemployeecontributes6%.(Changeswere
madetotheserulesin2017,butduetotheongoingpolitical
crisis,theGCSSisstillcollectingthecontributionsunderthe
oldrules.)
Stamp duty No
Transfer tax No
Other
Governmentagencies(ministries,departments,publicand
semi-publicestablishments)arerequiredtowithhold10%
frompaymentsmadetosubcontractorspendingreceiptof
ataxclearancecertificateissuedbytheTaxDepartment.
Transfer pricing
Thearm’slengthprincipleapplies;methodologiesfor
establishingthearm’slengthpricehavebeenintroduced
inexecutiveregulations.
Thin capitalization
Thethincapitalizationrulessetageneraldebt-to-equity
ratioof70:30.Ifinterestispaidtoanaffiliatedparty,theloan
interestamountmaynotexceedtheprevailinginternational
ratesorthecentralbankrate,plus4%.Interestexceeding
theseamountsisnondeductible.
134
Administration and compliance

Tax year
Thecalendaryeargenerallyapplies,althoughataxpayer
canselectthe12-monthperiodthatappliesforaccounting
purposes.
fileitsownreturn.
Filing requirements
Theself-assessmentsystemapplies,underwhichataxpayer
mustdetermineitsowntaxbaseandcalculatetaxdue.The
taxpayermustpaytheamountduebasedonthereturn.All
taxpayers(evenifexempt)mustsubmitataxreturn.Thetax
authoritieshavetherighttoauditreturnsandissuean
additionalassessment.Taxreturnsforacorporationmust
befiledby30Aprilorwithin120daysfromtheendofthe
taxyear.Taxdeclarationsmustbecertifiedbyalicensed
charteredaccountantandbeaccompaniedbyaudited
financialstatements.
Anentitywithholdingtaxatsourcemustremittheamountto
thetaxauthoritieswithin15daysfromthedatepaymentis
made.Incentivesapplyforearlyfiling.
Penalties
Thepenaltyforsubmittingalatereturnis2%ofthetax
payableforeachmonthforanentityreportingprofits;from
YER1milliontoYER5millionforlargetaxpayersincurring
losses;YER200,000formedium-sizedtaxpayers;and2%
ofexemptedtaxpermonthforexemptentitiesorafixed
amountintheeventofaloss.Thepenaltyforevasionis100%
to150%ofthetaxevaded.Finesalsoareimposedforfiling
135
anincompletereturn,failingtomaintainregularaccounts,
etc.
Rulings No
Personal taxation
Basis
Residentindividualsaretaxedonworldwideincome;
nonresidentsaretaxedonlyonincomeearnedfromYemen.
Residence
AnindividualisresidentinYemenforataxyearifhe/shehas
apermanentplaceofresidenceinYemen,hasresidedin
Yemenforaperiodofnotlessthan183days,orifaYemeni
nationalworksabroadandderivesincomefromYemen.
Filing status
Eachindividualmustfileareturn(ifsorequired);jointreturns
arenotpermitted.
Taxable income
Residentindividualsaretaxedonincomefromemployment
orcommercialorindustrialactivitiesandnoncommercial
activities(i.e.theexerciseofaprofession)earnedinside
Yemen,aswellasforeign-sourceincome.Incomesubject
tosalariesandwagestaxincludesincomereceivedbyan
employeeforworkperformedoutsideYemenforaresident
employer;incomereceivedbyanonresidentfroma
permanentestablishmentinYemen;andsalaries,rewards
andallowancespaidtothechairman,membersofthe
administrationboardandmanagersofcapitalassociations.
Individualsareexemptfromtaxonincomefromtreasury
bonds,interestfrombankdeposits,savingsinpostoffices
andincomefromsharesinpublicandshareholding
companies.
136
Capital gains No

Deductionsandallowancesavailableonmonthlysalary
incomeincludeYER10,000,plus6%ofgrosssalaryforan
employee’ssocialsecuritycontributionandallowances,up
toamaximumofYER65,000.
Rates
Thetaxrateis10%to15%forresidentsalariedindividuals
andaflatrateof20%fornonresidents.

Capital duty No
Stamp duty No
Real property tax

Anannualtaxisleviedontherentalvalueofrealpropertyin
anamountequaltoonemonth’srent;a1%taxisleviedon
incomefromthesaleoflandandconstructedpropertyand
landpreparedforconstruction.
Net wealth/net worth tax

Zakatisleviedonnetworth,atarateof2.5%.
Social security
Anemployee(whetheranationalorforeign)mustcontribute
6%ofsalarytotheGCSS.Aforeignemployeemaywithdraw
thetotalcontribution,subjecttoadeductionof20%asa
servicecharge,paidbytheemployeeandtheemployerto
GCSS.
137
Administration and compliance

Filing and payment

Thetaxreturnmustbesubmittedtothetaxauthorities
within120daysfromtheendofthetaxyear.
Forsalariedindividuals,theemployerwithholdstaxfrom
wagesandpaysittothetaxauthoritieswithinthefirst10
daysofthefollowingmonth.Theemployeeisresponsiblefor
taxpaymentwheretheincomeisfromaforeignsource.
Penalties
Thepenaltyforfailuretofileataxreturnis2%ofthetax
payableforeachmonthofdelay.
Value added tax

YemenoperatesaGeneralSalesTax(GST)system.
Rates
Thegeneralrateis5%,althougha10%rateappliesto
telecommunicationsandmobilecommunicationsservices.
Registration
CompanieswhoseannualturnoverexceedsYER50millionor
itsequivalentarerequiredtoregisterforsalestaxpurposes.
Registrationisvoluntarywhereturnoverisbelowthisamount.
Filing and payment

Aregisteredentitymustsubmitadeclarationofitssalestaxes
foreachmonth,withinthefirst21daysofthefollowing
month.
138
Source of tax law

IncomeTaxRegulations(LawNo.17of2010)
Tax treaties
Yemenhasconcluded15taxtreaties.
Tax authorities
YemeniTaxAuthority
Deloitte contact
Amin Hajar
Partner, Tax
amhajar@deloitte.com
139
Deloitte | ME tax handbook 2018 | DITS
DeloitteInternational
TaxSource
TheDeloitteInternationalTaxSource(DITS)isafreeonline
databasethatplacesup-to-dateworldwidetaxratesand
othercrucialtaxinformationwithineasyreach.DITSis
accessiblethroughmobiledevices(phonesandtablets),
aswellasthroughacomputer.
A database that allows users to view and compare tax

information for 65 jurisdictions that includes:
•Corporateincometaxrates;
•Historicalcorporaterates;
•Domesticwithholdingtaxrates;
•In-forceandpendingtaxtreatywithholdingrateson
dividends,interestandroyalties;
•Indirecttaxrates(VAT/GST/salestax);and
•Informationonholdingcompanyandtransferpricing
regimes.
The Deloitte Tax@hand App

Deloittetax@hand(TAH)isacustomizablemobileappthat
aggregatesnews,insightsandimportantresourcesfrom
43memberfirmtaxfunctions–aswellaspertinent
developmentscomingoutoftheEUandOECD–tocreate
adistinctlyDeloitteexperienceforclientsandour
professionals.TAHis:
•Tailored – Userscanselectgeographiesandtopicsof
interestandchooseapreferredlanguage.
•“Apropos” – Featuresnews,analysisandperspectiveson
taxissuesofinteresttocross-borderbusiness,aswellas
hyperlinkstoprimarytextdocumentsandlinkstoother
relevantDeloitteresources.
•Handy – Userscanreceivereal-timenotificationsofnew
postingsandsavearticlesthatareofinterest.
140
Balancing today’s demands
with tomorrow’s
opportunities
How do you prepare for what’s next when so much time is
spent making sense of what’s happening right now? In a
tax environment of competing and sometimes conflicting
demands, Deloitte delivers greater clarity. Together, we’ll
create a roadmap that is structured enough to guide your
actions today and flexible enough to address an uncertain
tomorrow. We help you take measured steps towards the
objectives that matter most to you and your organization.
Confidence to evolve
Deloitte.com/tax

Deloitte | ME tax handbook 2018 | ME Tax contacts
Servicelineleaders
ME Business Tax Leader ME FACTA & CRS Leader

Muhammad Bahemia Alex Law
mbahemia@deloitte.com alexlaw@deloitte.com
ME International and ME Deloitte Private

M&A Tax Leader Leader
Alex Law Walid Chiniara
alexlaw@deloitte.com wchiniara@deloitte.com
ME Transfer Pricing ME Indirect Tax Leaders

Leader Mark Junkin
Adil Rao majunkin@deloitte.com
adirao@deloitte.com
Robert Tsang
ME Global Employer robtsang@deloitte.com
Services Leader
Jayne Stokes Michael Camburn
jstokes@deloitte.com mcamburn@deloitte.com
ME Business Process
Solutions Leader
Basit Hussain
bhussain@deloitte.com
142
Deloitte | ME tax handbook 2018 | ME Tax contacts
YourDeloitteMiddleEast
Taxcontacts
ME Tax Leader Kuwait
Nauman Ahmed Ihab Abbas
nahmed@deloitte.com Partner, Tax
iabbas@deloitte.com
Bahrain
Maxim Chaplygin Robert Tsang
mchaplygin@deloitte.com robtsang@deloitte.com
Michael Camburn Lebanon

Partner, Indirect Tax Joe K. El-Fadl
mcamburn@deloitte.com Partner, Tax
jelfadl@deloitte.com
Egypt
Kamel Saleh Ghassan El-Kadi
Partner, Tax Director, Tax
ksaleh@deloitte.com gelkadi@deloitte.com
Giuseppe Campolo Libya

Partner, Tax Alex Law
gcampolo@deloitte.com Partner, Tax
Ramy George
Director, Tax Oman
rageorge@deloitte.com Muhammad Bahemia
Partner, Tax
Iraq mbahemia@deloitte.com
Alex Law
Partner, Tax Phaninder Peri
alexlaw@deloitte.com Director, Tax
pperi@deloitte.com
Jordan
Karim Nabulsi Robert Tsang
knabulsi@deloitte.com robtsang@deloitte.com
143
Palestinian Ruled Wissam Merhej

Territories Senior Director, Tax
Munther Al Bandak Riyadh
Partner, Tax wmerhej@deloitte.com
mbandak@deloitte.com
Michael Camburn
Qatar Senior Director, Indirect
Muhammad Bahemia Tax
Partner, Tax Saudi Arabia
mbahemia@deloitte.com mcamburn@deloitte.com
Rami Qudah Syria

Partner, Tax Laila Al Samman
rqudah@deloitte.com Partner, Tax
lalsamman@deloitteme.com
Robert Tsang
Partner, Indirect Tax UAE
robtsang@deloitte.com Alex Law
Partner, Tax
Saudi Arabia alexlaw@deloitte.com
Nauman Ahmed
Senior Director, Tax Mark Junkin
Al Khobar Partner, Indirect Tax
Middle East Tax Leader majunkin@deloitte.com
nahmed@deloitte.com
Bruce Hamilton
Nasser AlSagga Partner, Indirect Tax
Partner, Tax brucehamilton@deloitte.com
Al Khobar
nsagga@deloitte.com Yemen
Amin Hajar
Farhan Farouk Partner, Tax
Senior Director, Tax amhajar@deloitte.com
Jeddah
ffarouk@deloitte.com
144
145
Deloitte | ME tax handbook 2018 | Summary of Tax services
SummaryofDeloitte
Taxservices
CorporateandBusinessTax
InternationalTax
TransferPricing
MergersandAcquisitionsTax
DeloittePrivate
IndirectTax
GlobalEmployerServices
DeloitteLegal
BusinessProcessSolutions(BPS)
146
This publication has been written in general terms and therefore
cannot be relied on to cover specific situations; application of the
principles set out will depend upon the particular circumstances
involved and we recommend that you obtain professional advice
before acting or refraining from acting on any of the contents of this
publication. Deloitte & Touche (M.E.) would be pleased to advise
readers on how to apply the principles set out in this publication to
their specific circumstances. Deloitte & Touche (M.E.) accepts no duty
of care or liability for any loss occasioned to any person acting or
refraining from action as a result of any material in this publication.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited,

a UK private company limited by guarantee (“DTTL”), its network of
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DTME’s presence in the Middle East region is established through its
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Middle East tax

Foreign exchange control No

Accounting principles/financial statements

Principal business entities

Alternative minimum tax No

Foreign tax credit No

Holding company regime No

Technical service fee No

Branch remittance tax No

Other taxes on corporations

Real property tax No

Controlled foreign companies No

Compliance for corporations

Deductions and allowances No

Other taxes on individuals

Capital acquisitions tax No

Real property tax No

Net wealth/net worth tax No

Compliance for individuals

Filing and payment

Value added tax

Registration, filing and payment

Source of tax law

Foreign exchange control

Accounting principles/financial statements

Principal business entities

Alternative minimum tax No

Foreign tax credit

Holding company regime No

Technical service fees

Branch remittance tax

Other taxes on corporations

Real property tax

Controlled foreign companies

Compliance for corporations

Deductions and allowances

Other taxes on individuals

Capital acquisitions tax No

Real property tax

Net wealth/net worth tax No

Compliance for individuals

Filing and payment

Value added tax

Filing and payment

Source of tax law

Foreign exchange control Limited

Accounting principles/financial statements

Kurdistan Region tax regime

Principal business entities

Alternative minimum tax No

Foreign tax credit No

Holding company regime No

Technical service fees

Branch remittance tax No

Other taxes on corporations

Real property tax No

Controlled foreign companies No

Compliance for corporations

Deductions and allowances

Other taxes on individuals

Capital acquisitions tax No

Real property tax No

Net wealth/net worth tax No