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Government ready to impose taxes on companies
January 5, 2016, 9:22 am

The government is getting ready to approve a proposed law to impose a 10 percent tax on national companies, and a similar percentage on individuals who do business, and they will not be taxed for the first KD 50,000 they make each year. The draft law, prepared by the finance ministry with technical help from the International Monetary Fund (IMF), exempts oil companies, NGOs and other government authorities, and sets restrictions to prevent tax evasion, such as not exempting profits that are carried over to the reserves, or registering them as spendable allocations or future losses, yet it keeps the door open to create more specific rules in the implementation rules of bank allocations and insurance companies’ risks.

The draft tax law bans tax exemption on salaries, wages or allowances or other compensations paid or due to be paid to a related person to avoid leaking profits away from taxes in the form of bogus salaries. The draft exempts the transfer of assets from wholly-owned companies from taxes, and income resulting from dividends paid by a resident company to another resident company other than financial establishments, along with dividends paid by non-resident company (other than non-resident companies that are based in tax havens).

Source: Al-Rai

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