Tax laws Yemen
Yemen's tax system comprises various direct and indirect taxes, primarily governed by the Income Tax Law No. 17 of 2010 and the General Sales Tax Law No. 19 of 2001.
Key Components of Yemen's Tax System:
Income Tax:
- Scope: Applies to both individuals and corporate entities, with residents taxed on their worldwide income.
- Rates: Progressive rates for individuals, with specific rates for corporations, including a standard rate of 20% for most companies.
- Regulations: Detailed in the Income Tax Law No. 17 of 2010, supplemented by executive regulations and ministerial decisions.
General Sales Tax (GST):
- Rate: A standard rate of 5% is levied on most goods and services.
- Scope: Imposed on sales of goods and services, as well as imports into Yemen.
- Administration: Managed by the Yemen Tax Authority, which provides comprehensive information on GST regulations.
Zakat:
- Nature: A mandatory almsgiving tax for eligible Muslims, calculated as a fixed percentage (usually 2.5%) of one's savings and investments.
- Collection: In Yemen, zakat is state-mandated and collected by the government, as opposed to voluntary contributions in some other countries.
Additional Considerations:
Anti-Avoidance Measures: Yemen's tax legislation includes provisions to prevent tax avoidance, such as transfer pricing rules, thin capitalization regulations, and controlled foreign company rules.
Tax Residency: A company is considered a tax resident if it is incorporated under Yemeni law.
Tax Administration: The Yemen Tax Authority oversees tax collection and compliance, providing resources and updates on tax laws and regulations.
Conclusion:
Yemen's tax framework encompasses income tax, general sales tax, and zakat, each with specific regulations and rates. For the most accurate and current information, consulting the Yemen Tax Authority or a tax professional is recommended, especially considering the country's evolving political and economic landscape.
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