Personal taxation in Afghanistan depends upon tax resident status of the individual in a tax year. While Afghan resident individuals are taxed on their worldwide income, non-residents are required to pay tax on Afghan sourced income only. As a general rule, an individual is said to be resident in Afghanistan in any tax year if he/she:
Salary for services performed within Afghansitan is considered Afghan-sourced and is taxable in Afghanistan except where a bilateral or multilateral agreement between the government of Afghanisan and another country provides otherwise.
Salaried individuals are taxed at progressive rates ranging from 2% to 20%. Basic exemption is allowed at AFN 5,000 per month (AFN 60,000 per annum). Employees having their only source of income as salary where tax has been withheld and deposited by the empoyer in accordance with the prescribed rates given in the law are not required to file annual income tax return. However, they are required to file annual statement of salary and tax deduction after end of the tax year.
Taxes are charged in local currency that is Afghanis (AFN). If the income is received in any foreign currency, it is converted on average of free rates used by the Central Bank to purchase such foreign currency at the end of each month.