Individual taxation

INDIVIDUAL TAXATION

Residents are liable to pay tax on their worldwide income. Married couples are taxed separately.

INCOME TAX

Income and capital gains from all sources is taxed at a flat rate of 10%. There are six types of income depending on the source:

Income from labor employment;

. Income from sole proprietor’s enterprise;

Income from other types of economic activity;

Income from rents or any other vesting of rights or property for consideration;

Income from transfer of rights or disposal of property;

Income from other sources as well as income liable to final taxes

Resident individuals are entitled to the following tax reliefs:

Tax relief for persons with impaired working capacity

Tax relief for personal voluntary social security and insurance contributions

Tax relief for personal social security contributions when retiring

Tax relief for donations

Rental Income

Rental income is taxed at the standard 10% income tax rate. Income-generating expenses are deductible when computing for taxable income.

Capital Gains

Capital gains are taxed at the standard 10% income tax rate. The inflation adjusted acquisition price or the taxable value of the property for the purpose of real estate tax, whichever is higher, is deductible from the selling price.

VALUE ADDED TAX (VAT)

Land transactions and leasing residential properties are exempted from VAT.

CORPORATE TAXATION

INCOME TAX

Income and capital gains by corporations are taxed at a flat rate of 10%. Income-generating expenses are deductible in computing taxable income.

Corporate income tax must be remitted on or before 31 March of the succeeding year.

PROPERTY TAX

Real Estate Tax

Real estate tax is around 0.15% of the sale or purchase price of the property to be paid quarterly in the end of months March, June, September and November. Alternatively, the taxpayer can pay his real estate dues in one installment to avail himself of a discount.