Regulatory Alerts2017-01-01
Microfinance-2017- Circular No. 77 Value Added Tax on Employees' Salaries
The Palestine Monetary Authority issued Circular No. 77 on April 12, 2017, to notify specialized lending institutions of Cabinet Decision No. 17/146 rejecting their request for a Value Added Tax exemption on employee salaries. The Cabinet, acting on legal authority and public interest considerations, formally denied the exemption after reviewing recommendations from a specialized committee convened in December 2016. Financial stability authorities are directed to enforce the decision immediately, ensuring non-banking lending institutions remain subject to VAT on staff compensation effective from the ruling's issuance date.
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