Employer Tax Contributions

Tax Type	Rate	Base
Wage Withholding Tax (Individual Income Tax)	0% - 10% (progressive monthly rates)	Employee's Gross Salary (AFN 0-5,000: 0%; AFN 5,001-12,500: 2% of amount over 5,000; AFN 12,501-100,000: 150 AFN + 5% of amount over 12,500; Above AFN 100,000: 4,375 AFN + 10% of amount over 100,000)
Corporate Income Tax	20%	Net Taxable Income
Business Receipts Tax (BRT)	2%, 5%, 10% (varies by sector/income)	Gross Receipts

Note: The public-sector pension program has been suspended, and Afghanistan currently lacks a social security program providing long-term old-age benefits to a meaningful number of residents.

Filing & Compliance

• Wage Withholding Tax: Remit to Afghanistan Revenue Department (ARD) within 10 days after the end of the month in which wages were paid.
• Business Receipts Tax: File forms and make payments quarterly, no later than the 15th day following the end of the solar quarter.
• Corporate Income Tax: Annual tax return due and payable by the end of Jawza (3rd month) of the next fiscal year.

In Afghanistan, employers are responsible for withholding taxes from employee salaries above a certain threshold.

Employer Responsibilities

• Who Withholds: Legal entities (companies, organizations, government agencies) and individuals with two or more employees must withhold taxes.
• Which Payments: Salaries, wages, overtime pay, cash allowances (food, transportation, etc.), and non-cash payments are subject to withholding.
• Employee Threshold: Withholding applies to resident and non-resident employees earning above AFN 5,000 per month (or equivalent). Non-resident employees are exempt if their home country has a reciprocal exemption with Afghanistan. Employees of foreign governments and international organizations are taxed based on treaties or contracts.
• Tax Rates: A progressive tax system is in place, meaning the tax rate increases along with the income. Unfortunately I do not have access to the tax rate schedule at this time.

Employee Deductions

• Types of Income: Taxable income includes salaries, wages, bonuses (performance, Eid, etc.), overtime pay, and all cash allowances, irrespective of their purpose (transportation, phone, food, winter wood, medical, etc.) as of June 3, 2024.
• Per Diems: Per diems for work-related travel are subject to withholding tax. as of June 3, 2024.

Business Expenses and Deductions for Employers

Most business-related expenses are deductible. This information is valid as of today, February 5, 2025 and might change in the future. Depreciation of assets (excluding land) is deductible. Startup expenses are not deductible. Interest expenses are deductible, but subject to a 20% withholding tax. No deductions are allowed for expenses like dividends, interest, royalties, etc., if the employer failed to withhold the required tax.

Additional Information for Non-Residents

Non-resident individuals, companies, and organizations conducting business in Afghanistan are taxed on income from Afghan sources. Deductions are limited to expenses linked to Afghan-sourced income. Foreign taxes paid on Afghan-sourced income are generally not deductible or creditable, unless specified by a tax treaty. The U.S. does not currently have a tax treaty with Afghanistan. This information is valid as of today, February 5, 2025 and might change in the future.

Social Contribution Tax (as of January 6, 2025)

There's a social contribution tax benefit for new labor market entrants, applying to employees with no more than three months of work experience with another employer in the past year. Employers can reduce their social contribution tax base by the minimum wage for up to a year, and by 50% of the minimum wage for an additional six months.