Afghanistan - File for Tax Returns

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Procedure

Taxpayers can obtain tax forms from Ministry of Finance tax offices (including mustufiats) and from authorized banks. Guides to help with the completion of tax forms can be downloaded from the Ministry of Finance website at http://www.mof.gov.af/tax Instructions on the form will direct the taxpayer where the form should be filed.

A taxpayer, who chooses to file annual income tax returns and pay any amounts due manually, should follow Steps 1-5:

• Step 1-Obtain proper forms, instructions, tax guides free-of-charge at the tax office Client Service Unit
• Step 2-Self assess, determine tax due based on income and percentages as specified by the Income Tax Law 2009
• Step 3-Complete forms, submit these to appropriate tax office based on taxpayer classification, but pay no money at the tax office; if a tax payment is due,
• Step 4-Take a copy of the completed tax form with a payment to Da Afghanistan Bank (DAB) and pay the amount due, then
• Step 5-Return to his/her respective tax office with a receipt issued by DAB for update of the taxpayer�s records.

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Required Documents

• Journals
• Ledgers
• Inventory and stocktake records
• Asset register
• Banking and financial transaction information
• Legal documents, including contracts
• Statements, invoices and receipts
• Income statements
• Balance sheets

Office Locations & Contacts

Afghanistan Revenue Department
Ministry of Finance
Email: [email protected]
Mobile: +93 (0) 700 25 69 44
Contact Afghanistan Revenue Department

Eligibility

All legal and natural persons (Taxpayers) are informed that dates for submitting your 1391 return and balance sheets is 1st. of Jadi 1391 (21st. Dec 2012) to end of Jawza 1392 (20th. June 2013). Hence, in order to avoid fines, all taxpayers are kindly requested to submit their 1391 return and balance by the end of Jawza 1392.

Taxpayers that are subject to income tax under the Income Tax Law, but are exempt from tax due to an international agreement or treaty, must file an income tax return. The income tax return should reflect the effect of the exemption. The relevant agreement or portion of the treaty should be attached to the tax return with an explanation as to why the agreement or treaty applies.

Fees

There is no fee charged when filing for tax return.

Validity

The taxable year is the solar year which starts from the first day of Hamal (21st March) and ends on the last day of Hoot (20th March)

Documents to Use

Simplified Return-Individuals-Dari- GB.xls

Simplified Return-C&LLCs-Dari- GB.xls

Complete Return - C&LLCs-Dari-GB.xlsx

For information on how to make electronic tax payments to the Afghanistan Revenue Department, see Guide 6: Paying Tax by Electronic Transfer

Sample Documents

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Processing Time

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Instructions

The Afghanistan Revenue Department currently uses the following draft criteria as a basis for classifying taxpayers and assigning accounts respectively to Large Taxpayer, Medium Taxpayer and Small Taxpayer Offices for filing and service purposes.

Natural persons are required to file an income tax return. There are two exceptions, however.

• The first exception applies if a natural person meets the following requirements:
  • The individual is employed by a single employer.
  • The employer properly withholds tax from the individual�s wages.
  • The individual does not have any other source of income.
• The second exception applies if the natural person is not subject to income tax.

Required Information

• Name of Taxpayer
• Taxpayer Identification Number
• Address of Taxpayer
• Number and Street
• Village
• District
• Province
• Annual tax period
• Tax Payable Calculation

Need for the Document

Taxpayers in Afghanistan comply with their income tax filing obligations according to the following steps at their respective offices depending upon their classification as Large, Medium or Small which in turn, is determined, in general, by annual turnover or type of business. A separate fact sheet, Taxpayer Classifications, provides these details

Information which might help

Large Taxpayer Office

LTO manages service delivery to selected large taxpayers so as to assure the public that ARD has met its revenue collection obligations consistent with tax law, meaning no more and no less than due. By managing Large Taxpayer accounts, ARD seeks to

• Maintain the integrity of the tax system and the reputation of the tax administration through timely delivery of service and collections from Afghanistan�s largest taxpayers
• Use effectively and apply consistently guidelines for decision makers responsible for meeting tax authority legal obligations while protecting taxpayer rights
• Regularly review and, if necessary, amend LTO selection criteria to ensure account inventories are maintained at optimal levels, meaning efficient allocation of ARD�s skill base and time application

LTO Criteria By specific industry including:

• National and international airlines
• National and international telecommunications service providers
• Banks and financial institutions (financial institutions include micro finance companies)
• Petroleum and gas importers
• Hotels and restaurants providing premium service
• Mining and extraction companies (excluding mining and extraction consultants, support industries and other related minor businesses)
• Businesses substantially owned by the Islamic Republic of Afghanistan or its Ministries
• Selected State Owned Enterprises (SOE�s) including electricity, water, sewage and other large utility suppliers, and any SOE currently being privatized or liquidated.

By size of business

• Annual turnover of AFN 75 million or more or, if turnover is not established,
• Capital of AFN 150 million

If the taxpayers� income or capital is denominated in foreign money then conversion shall be done according to Article 4(2) of Income Tax Law 2009.

By profile

• Businesses which, in the opinion of the ARD management, would be best served by the LTO, and which may include
• High profile taxpayers such as national and senior public figures

MTO Criteria

MTO manages service delivery to selected Medium Taxpayers:

By special industry, including: construction, manufacturing, and service industries (other than hotel, restaurant, wedding hall or real estate)

• With annual turnover of less than AFN 75 million or if turnover is not established
• With capital of less than AFN 150 million
• Natural persons who derive wages income and is governed by Article- 87(2) other than specified in Chapter- XI of Income Tax Law, 2009.

By size of business, any industry:

• With annual non-exempt turnover of AFN 3 million or more but less than AFN 75 million, or if turnover is not established
• With capital of AFN 6 million or more but less than AFN 150 million.

If the taxpayers� income or capital denominated in foreign currency then conversion shall be done according to Article- 4(2) of Income Tax Law, 2009.

STO Criteria

STO manages service delivery to Small Taxpayers:

By industry, including businesses from the following industries unless specifically excluded by ARD Management:

• All businesses and natural person as classified by Chapter- XI of Income Tax Law except for businesses in construction, manufacturing and service industries.
• Businesses engaged in service industries of hotel and restaurant other than providing premium service but excluding wedding hall
• Business engaged in real estate industries

By size of business: unless specifically excluded by ARD Management, those businesses

• With annual exempt turnover of less than AFN 3 million AFS or if turnover is not established
• With capital of less than AFN 6 million

If the taxpayers� income or capital is in foreign money then conversion shall be done according to Article- 4(2) of Income Tax Law, 2009.

By management discretion: In addition to the criteria identified for each taxpayer offer, ARD Management may include in inventory those businesses that, in its opinion, would be best served by the office to which the account is assigned.

Other uses of the Document/Certificate

The Law imposes penalties for non-compliance. These penalties may be assessment and collection of fines and additional taxes for failure to fulfill your tax obligations under the Law, such as:

• Failure to register with the Afghanistan Revenue Department for a Tax Identification Number
• Failure to keep proper financial records
• Failure to file your tax returns when they are due
• Failure to cooperate with auditors and provide information as required
• Failure to pay your taxes when due

Penalties become more severe if non-compliance is deliberate and without reasonable cause, and may include referral for prosecution by the Office of the Attorney General.

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