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8.1.1. Corporate Income Tax

The standard corporate tax (‘CIT’) rate for companies is 30%, including companies engaged in petroleum, natural gas and oil shale operations. Income from rental of buildings is subject to tax at the standard CIT rate. However, a number of other rates apply as follows:

  • Petroleum and mining companies and contractors thereto are subject to corporate tax at the rate of 25%
  • Capital gains on sale or transfer of shares of companies is taxed as ordinary income at 30%, whereas, capital gains from sale or transfer of buildings held for business is taxed at reduced rate of 15%
  • Dividend tax on retained earnings
  • Resident companies are required to pay dividend tax at 10% on retained earnings within 12 months from the end of the relevant tax year, without regard to distribution of retained earnings to shareholders. However, if such undistributed retained earnings are converted in capital within 12 months from the end of relevant tax year, then they are exempt from the tax (See Sec 5.1.1.).
  • WHT on imports
  • Withholding tax is collected from taxpayers at a rate of 3% at the time of importation of goods for commercial use. Such tax is credited against the taxpayer’s income tax liability for the year
  • There are certain tax incentives available to companies which reduce CIT burden (See Sec 10)

Alternate Minimum Tax

There is no minimum tax.