ARD Income Tax Slabs in Afghanistan for 2024-2025

In Afghanistan, every taxpayer who is required to pay taxes or customs duties must apply for a Taxpayer Identification Number (TIN), a unique 10-digit number that identifies a specific taxpayer. Failing to do so may result in a taxpayer being subject to additional taxes and applicable penalties.

What is income tax? It is the payment made by an individual or a company to the government based on their earnings which may be derived from employment, pensions, investments or other income. 

Taxpayers must be aware of which income is taxable (such as salary, fees, commissions and income from business activity, income from the sale of property, interest, and bonus payments) and which is non-taxable (such as grants or gifts of the State, scholarships, life insurance payments on death, proceeds of a borrowing, payments on principal received by a debtor). The taxation system in Afghanistan is administered by the official tax body, the Afghanistan Revenue Department (ARD).

The Income Tax Law of 2009 provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax slabs and income tax rates, for effective tax planning and to remain compliant with the tax laws of Afghanistan.

Here you will learn about:

• headline tax rates
• personal income tax (PIT) slabs
• corporate income tax (CIT) slabs
• business receipts tax rates
• capital gains tax (CGT) rates
• withholding tax rates 
• value-added tax (VAT) rates

Headline Tax Rates in Afghanistan

Personal Income Tax (PIT) Slabs in Afghanistan 2024-2025

An individual is regarded as a resident for tax purposes if they: 

• have their principal residence in the country during the fiscal year 
• are present in Afghanistan for at least 183 days in the fiscal year or
• are an employee or an official of the Government of Afghanistan assigned abroad at any time during the fiscal year.

According to the Afghan Ministry of Finance, Guide 4 on Tax Overview for Businesses, Investors and Individuals, PIT rates are taxed following the table below:

Self-employed individuals or sole proprietors are taxed using the same annual tax rates and thresholds as individuals.

Personal Income Tax Due Dates

Corporate Income Tax (CIT) Rates in Afghanistan 2024-2025

According to Article 4(1) of the Income Tax Law 2009, corporate income is taxed at a flat rate of 20%.

Business Receipts Tax (BRT) Rates

Business receipts tax is a tax which is imposed on total gross income (sales) before any deduction. BRT is taxed according to the table below:

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Afghanistan

Chapter 3 of the Income Tax Law outlines the capital gains tax applicable, that is, gains from the sale or exchange of capital assets or any investment in trade or business. The gain shall be taxable income in the tax year in which the asset was transferred. Gains from the sale or transfer of property acquired by inheritance is, however, excluded from these provisions.

Additionally, gains from the sale, exchange or transfer of the following is also regarded as taxable income:

• a trade or business - this includes goodwill
• a factory - this includes equipment, machinery, buildings and land, or any part of such assets
• equipment used in the business of transporting goods or persons
• shares of stock in a corporation or limited liability company

Withholding Tax (WHT) Rates in Afghanistan

According to Article 46 of the Income Tax Law, profit or non-profit legal persons formed under the laws of Afghanistan shall be required to withhold twenty percent (26%) tax from interest, dividends, royalties, prizes, rewards, lotteries, bakhshishis (gratuities), bonuses, and service charges.

Value-Added Tax Rates in Afghanistan

Value-added tax (VAT) is an indirect tax that is imposed on the supply of taxable goods, services or imports. The taxpayer pays VAT on the taxable supply and the importer pays VAT on the taxable import. However, certain supplies and imports may be exempt from VAT. 

Supplies which are exempt from VAT include:

• health, educational, financial or insurance services provided according to the law
• transfer or lease of immovable properties for residential purposes
• the provision of religious services

Imports which are exempt from VAT include:

• goods of travelers for personal use provided in the customs tariff
• goods of diplomats according to the law
• personal effects of immigrants and refugees

Certain suppliers may be subject to a zero rate of VAT. This includes but is not limited to an export of goods or services for use outside the country. For more information, see Chapter 2 of the VAT Law.