Somaliland Tax

STRUCTURE OF COUNTRY DESCRIPTIONS 

1. TAXES PAYABLE

COMPANY TAX CAPITAL GAINS TAX BRANCH PROFITS TAX

VALUE ADDED TAX (VAT) EMPLOYMENT TAX LOCAL TAXES

VEHICLE ROAD TAX LAND RATES

RENTAL INCOME TAXES SINGLE BUSINESS PERMIT

1. DETERMINATION OF TAXABLE INCOME

CAPITAL ALLOWANCES

1. PERSONAL TAX

KEY TAX POINTS            

• Resident companies pay tax at a rate of 10% whilst non-resident companies pay tax at the higher rate of 16.3%.
• Capital gains are liable to tax at 10% (of the net gain).
• Value Added Tax (VAT) is levied at 5%.
• Personal tax is levied at 6% on gross income.

1. TAXES PAYABLE

COMPANY TAX

Company tax is based on computed tax profits as follows:

• Resident companies: 10%
• Non-resident companies: 3%

CAPITAL GAINS TAX

Capital gains are subject to tax at a rate of 10% of the net gain.

BRANCH PROFITS TAX

Branch of a foreign entity pays tax at the rate of 16.3%.

VALUE ADDED TAX (VAT)

The VAT rate is 5%.

EMPLOYMENT TAX

Employment income is taxed at 6% of the gross annual income

LOCAL TAXES

The following local taxes are levied in the republic of Somaliland:

VEHICLE ROAD TAX

Vehicle road tax rate 0.5% of the value of the vehicle

LAND RATES

Land rates are based on the percentage of the site value.

RENTAL INCOME TAXES

10% of the rental income

SINGLE BUSINESS PERMIT

Depending on the type of business, this permit costs a minimum of USD 200 to a maximum of USD 600.

1. DETERMINATION OF TAXABLE INCOME CAPITAL ALLOWANCES

• Land 0%
• Buildings 5%
• Machinery 10%
• Computers 33%
• Equipment 20%
• Trucks 20%

1. PERSONAL TAX

• Tax is charged at a rate of 6% on the gross income