Taxes in Afghanistan

The finance ministry (Ministry of Finance) and the Afghanistan tax authority (Afghanistan Revenue Department) administer most tax procedures in Afghanistan. Provincial revenue offices (Mustufiat), customs authorities, and, for certain payments, the central bank (Da Afghanistan Bank) perform additional tasks. The tax identification number (TIN) is required for persons subject to tax and customs duties, certain withholding agents, and bank-account holders. The Afghanistan Revenue Department offers an online procedure for this; according to the reviewed guidance, issuance and reprinting are free, and the stated processing time is 24 working hours. Electronic services such as ARDES/e-Filing, TAIS, and RMIS supplement applications, returns, and correspondence with the administration. Individuals who are tax residents are generally taxed on their worldwide income. Nonresidents are assessed on income from Afghan sources. Indicators of residence include an ordinary principal residence or a corresponding stay of 183 days in the tax year; Afghan government employees abroad are also covered. Taxable income includes, among other things, wages, fees, commissions, business income, gains from transferring movable or immovable property, interest, dividends, rent, royalties, prizes, and partnership profit shares. Net income is calculated by deducting ordinary and necessary deductible expenses from gross receipts. For individuals, the annual income brackets announced for 2026 after the relief measure are 0 to 120,000 AFN at 0 percent, 120,001 to 1,200,000 AFN at 10 percent, and above 1,200,000 AFN at 15 percent. Employers with at least two employees must withhold wage tax under the reviewed guidance. The wage base includes regular compensation, overtime, and benefits in cash and in kind. The monthly threshold in the older guidance is 5,000 AFN. The employer remits the withheld tax within ten days after the end of the month. Anyone with only one employer and exclusively wage income whose withholding is correct does not have to file an annual return under this rule; multiple employers or additional income may trigger an annual return. The current personal tax tables should be reconfirmed with the Afghanistan Revenue Department before payroll is processed. Withholding tax applies to rent payments when the tenant is a company, legal entity, or business-active individual and the monthly rent exceeds 10,000 AFN. The rate is 10 percent for amounts above 10,000 up to 100,000 AFN and 15 percent for amounts above 100,000 AFN. The tenant pays the withheld tax to the responsible office within 15 days after the end of the Afghan solar month. The landlord continues to declare the rent in the annual return and credits the withholding tax against the tax due. A sole proprietor or self-employed person is generally taxed under the personal brackets on taxable net profit. A company with separate legal personality taxes its net profit as a legal entity. Businesses must keep separate records for each operation, including supporting documents, ledgers, financial statements, contracts, and bank, import, and export records. In an audit, the administration may also request information from third parties. For companies and legal entities, including health centers, an income tax rate of 10 percent was announced for 2026. Mining companies are excluded from this reduction; the current rate was not stated in the reviewed announcement, while older documents show 20 percent. The gross-receipts tax (Business Receipts Tax) is a tax on gross receipts before deductions. Legal entities file it quarterly. Under the older rule, it applies to individuals with quarterly turnover of at least 750,000 AFN. The former general rate is 2 percent, with 5 percent for certain hotels, restaurants, and event halls and 10 percent for telecommunications, international passenger airlines, and specially classified hotels or restaurants. On imports, 2 percent BRT is collected by customs and credited as an advance payment. BRT may be treated as an expense for income-tax purposes. Returns and payment are generally due within 15 days after the end of the solar quarter; a nil return may also be required even when there is no income. Under a 2024 instruction from the Ministry of Finance, small traders with annual turnover of up to 2,000,000 AFN are exempt from the fixed tax. If annual turnover exceeds this limit, the published rule provides for 0.3 percent of total turnover. The start, withdrawal, and precise scope of the exemption were not fully published in the reviewed notice. Older fixed-tax rules cover, among others, importers, transporters, contractors, exhibitions, and small businesses; for importers, those rules stated 2 percent as a creditable tax or 3 percent as a final tax, depending on the valid business license. The latest instruction may replace older rates. Value-added tax, internationally referred to as VAT, has a rate of 10 percent under the published law and a registration threshold of 150,000,000 AFN. Registration must be requested within 15 days after the threshold is exceeded. Voluntary registration requires, among other things, taxable turnover, a fixed place of business, and tax compliance; in addition, most turnover must be to businesses or at least 25 percent must arise from exports. Health, education, financial, and insurance services, residential property, and religious, humanitarian, and sporting services are excluded under the published lists. Exports, international land transport, and certain staple foods and books may be zero-rated. The VAT return and payment are due within 30 days after the end of the VAT period. Input tax requires a VAT invoice or import documents. Excess amounts are generally carried forward; a period of 45 days is stated for a documented refund procedure. The current relationship between VAT and BRT has not been fully clarified publicly and should be confirmed with the Afghanistan Revenue Department before pricing or issuing invoices. Other charges include taxes on transfers of movable and immovable property, withholding taxes, fixed taxes, customs duties, and import charges. For 2026, a transfer tax of 0.5 percent was announced instead of the older rate of 1 percent. For certain oil and gas transactions, the published information mentioned, among other items, 50 AFN per tonne on bulk sales, fixed monthly amounts of 100,000, 70,000, 50,000, or 25,000 AFN for commission sellers according to quality grade, and 80 AFN per tonne where goods are purchased by the tonne and sold by the kilogram. For goods transport, a charge of 0.5 percent was announced instead of the older rate of 1 percent. At filling stations, a fixed tax of 0.3 percent per liter initially applied; a per-tonne system was announced for 2026. The latest Afghanistan Revenue Department or Ministry of Finance instruction determines the applicable calculation. The Afghan tax year runs from 21 March to 20 March. Under older procedural rules, the annual return of companies and sole proprietors is due at the end of Jawza of the following tax year. Withholding-tax, BRT, and VAT deadlines depend on the relevant month, quarter, or VAT period. Electronic filing is available; the payment method, responsible office, and current deadline should be checked before filing because older guidance and new notices coexist. An overpayment is first offset against outstanding tax or customs debts. Any remaining amount may be carried forward as a credit or claimed through the documented refund procedure. Under older rules, an adjustment may be requested within five days after the return's due date, and the Afghanistan Revenue Department is expected to decide within 60 days. An appeal against the decision may be filed within 30 days, with further referral to the court available within another 30 days. A disputed assessment generally remains payable under the reviewed rule. Late filing, missing returns, a missing TIN, failure to remit withholding tax, inadequate records, and tax evasion may result in additional taxes, fines, account seizure, business closure, problems renewing a license, or a travel ban where established debts exceed 20,000 AFN. Tax information is generally confidential. For cross-border activities, the rules tax Afghan-source income; tax residents are generally assessed on worldwide income. A permanent establishment may arise through, among other things, an office, factory, workshop, warehouse, extraction site, construction or assembly project, packing facility, or permanently established sales exhibition. A VAT rule for the recipient applies to certain foreign services. The Afghanistan Revenue Department maintains a procedure for treaty exemptions, but an up-to-date list of double-tax treaties in force was not published on the reviewed pages. The 2023 initialed or paraphed Pakistan-Afghanistan agreement should therefore not be treated as applicable without current confirmation. For every specific calculation, the latest instruction, the responsible office, and the current filing status take precedence over older English guidance.