Guide 03 services of prepared food; or sales of cooked foods that
were prepared on the premises.
Business Receipts
Tax on Services
Introduction
The Business Receipts Tax (BRT) affecting the following
types of businesses (Articles 64 & 65 Income Tax Law)
came into effect on 30 Jowza 1383 (June 19, 2004):
1. Hotel services
2. Restaurant services
3. Telecommunication services
4. Airline services
Note 1: There has been a legislated change to the
monthly threshold of 50,000AFs per month. This has been
increased to 100,000AFS effective November 14, 2005
(23 Aqrab, 1384)
Note 2: All taxpayers with business receipts tax
obligations that do not fall into the above four categories
will continue to follow the existing Business Receipts Tax
rules. Please note: The filing and payment frequency for
business receipts taxes not listed above has been
switched from annual to quarterly. This change to quarterly
filing and payment is effective from 1 Hamal 1385 (March
21, 2006). Contact your local Mustufiat office for more
information (Article 93).
Note 3: There are no fees or charges payable to
the Ministry of Finance or its Revenue
Department or the Mustofiat for any Tax Guides
or Forms or at any stage of the tax assessment
collection or enforcement process
Definitions (Article 65)
Hotel services – means the provision of sleeping
accommodation and related services, including the
provision of meals, beverages, laundry and
communications services, to persons who occupy such
accommodation as transient guests.
Restaurant services – means the provision of food or
beverages by an establishment that provides facilities for
immediate consumption at that establishment, or catering
Telecommunication services – means the provision of
telephonic services or internet services by a
telecommunications service provider or internet service
provider, including digital or analogue telephone, facsimile
or data transfer communications and internet access by
any means.
Airline services – means passenger air services where the
flight originates in Afghanistan. See also Guide No. 12
Who Must Pay the 10% BRT?
If you are a legal person (corporation, limited liability
company, partnership, etc.) or a natural person operating
as a sole proprietor and your business falls into one of the
four categories previously mentioned and your total sales
value (turnover) is 100,000 Afghanis or greater for any
month, you must file a return and pay tax for that month.
Tax Rate
The rate for those affected by this application of the
Business Receipts Tax will be 10% of the gross receipts or
income of the business for all affected businesses (both
legal and natural persons), irrespective of whether the
taxpayer has passed the tax onto the customer.
Example:
Ahmad, who is a sole proprietor, runs a restaurant in
Kabul. Monthly gross sales of the restaurant for Mizan,
Aqrab and Qaus are 90,000Afs, 104,000Afs and
80,000Afs, respectively. As the sales in Mizan and Qaus
are less than 100,000Afs, the business (a sole proprietor)
does not have a BRT liability for those months. The
business only has a BRT liability for Aqrab in which the
gross sales are 104,000Afs. The tax rate used in this case
is 10%, which is applied to the full 104,000Afs. Therefore,
the BRT payable is 10,400Afs.
How is the Tax Paid?
Tax forms and payments are due on a quarterly basis
using the solar calendar (Article 93). However, tax is
calculated on a monthly basis. Tax payments should be
made in Afghanis at Da Afghanistan Bank no later
than the fifteenth (15th) day following the end of the
solar quarter in which the sales were made.
Quarter Due Date
Hamal – Jowza 15 Saratan
Saratan – Sunbala 15 Mizan
Mizan – Qaus 15 Jeddi
Jeddi – Hut 15 Hamal
Example:
Ahmad has calculated his tax due on the 104,000Afs for
Aqrab as 10,400Afs. Since the return and tax are due on a
quarterly basis, he would complete his form showing no
tax for Mizan and Qaus, and tax of 10,400Afs for Aqrab. Treatment of Business Receipts Tax for
He would file this return and pay the tax at Da Afghanistan
Bank no later than 15 Jeddi.
Income Tax purposes
The Business Receipts Tax paid or payable is considered
Recordkeeping to be an ordinary and necessary expense of doing
business and is therefore deductible from gross income
The tax law requires taxpayers to maintain adequate
when computing taxable income for the year (Article 67).
accounting books and records to prove that the correct
amount of tax has been paid (Chapter V). The Ministry of Tax Forms and Information
Finance has the authority to examine the books and
Tax forms, guides and assistance are available from the
records of the taxpayer and those of associated persons
Ministry of Finance, Afghanistan Revenue Department,
(Article 96).
Individual Tax Unit or phone 0752015016. Also, additional
information and a copy of the Income Tax Law is available
Method of Accounting
on the Ministry of Finance “Tax Information Page” at –
The 10% Business Receipts Tax is based on income
www.mof.gov.af/tax
derived from the services provided by a legal or natural
person. The term ‘income derived’ means income derived
Enforcement Provisions
under an accruals method of accounting.
Failure to comply with the requirements of the Income
Tax Law may result in the Ministry of Finance using ad-
The Tax Form
ministrative powers within the tax law to ensure compli-
ance. These provisions are contained in Chapters XIV &
The Business Receipts Tax form is a four part form which
XVI and include fines, penalties and imprisonment.
requires your identifying information (name, address,
taxpayer identification number – TIN, etc.) your business
type, gross receipts, and total tax. You will provide one Islamic Republic of Afghanistan
copy to the cashier at Da Afghanistan Bank when you pay Ministry of Finance
your tax. The bank will also keep two additional copies, Afghanistan Revenue Department
which they will forward to the Ministry of Finance. You will
receive one copy for your records.

Example:
1385
Waheed Nasri operates a guesthouse, which also includes
a restaurant, as a limited liability company. During the first
quarter of 1384 he had gross guest-house receipts of
400,000Afs for Saratan, 300,000 Afs for Asad, and
350,000Afs for Sunbala. He also had restaurant receipts of
120,000Afs, 90,000Afs and 110,000Afs for the same three
months. He would report this income by 10 Mizan 1384 as
follows: Saratan Asad Sunbala

- Hotel Services 400,000 300,000 350,000

- Restaurant 120,000 90,000 110,000
Services
- Telecommunication Nil Nil Nil
Services
- Airline Services Nil Nil Nil
______ ______ ______
Monthly Total 520,000 390,000 460,000

Calculation of Tax
Once the 100,000Afs threshold is exceeded the 10% tax
rate is calculated on the entire amount. For example in a
month where the sales are under 100,000Afs no 10% BRT
is payable, but in a month where the gross receipts are
over 100,000Afs, it is the entire amount on which the 10%
BRT is payable, not just the amount that exceeds the
100,000Afs.
Note: Limited liability companies, corporations, general
partnerships and organizations will be liable for the 2%
BRT on gross receipts when the total is under the
100,000Afs threshold.

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