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.
Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
Circular No. (2017/77)
To all specialized lending institutions operating in Palestine
Date: Wednesday, April 12, 2017
Subject: Value Added Tax on Employees' Salaries
Attached for your information is Cabinet Decision No. (17/146/02) Cabinet Secretariat dated 03/04/2017 regarding the Value Added Tax on employees' salaries in specialized lending institutions.
Deputy Governor for Financial Stability Affairs
Ramallah - Palestine P.O. Box 452 | Tel: +970 2 2415250 | Fax: +970 2 2409922 | Phone: +970 2 2415250 | Fax: +970 2 2409922 | Ramallah - Palestine P.O. Box 452 Gaza - Palestine P.O. Box 4026 | Tel: +970 8 2825292 | Fax: +970 8 2844487 | Phone: +970 8 2825292 | Fax: +970 8 2844487 | Gaza - Palestine P.O. Box 4026 Email: info@pma.ps | Email: info@pma.ps www.pma.ps
Cabinet Secretariat CABINET SECRETARIAT
12 April 2017
To: Dr. Hani Al-Ak Shukri Bishara Minister of Finance and National Economy
Subject: Value Added Tax on Employees' Salaries in Non-Banking Lending Institutions
Greetings,
The General Secretariat of the Cabinet extends its greetings and informs you of the Cabinet Decision issued during its weekly session No. (17/146) dated 03/04/2017, regarding the rejection of the request by non-banking lending institutions to be exempted from Value Added Tax on their employees' salaries.
We kindly request taking the necessary measures to implement the decision.
Please accept our highest respect and appreciation.
Salah Aiban Secretary-General of the Cabinet
Attached: The aforementioned decision. Copy: His Excellency the Prime Minister, may God protect him Members of the committee mentioned in the decision, may God protect them
Reference/Initiation Legal Affairs / Documentation Department
State of Palestine Cabinet of Ministers
Cabinet Decision No. (17/146/C) Cabinet Secretariat for the year 2017 Value Added Tax on Employees' Salaries in Non-Banking Lending Institutions
Based on the authorities granted to us by law And based on the requirements of public interest And having reviewed the amended Basic Law of 2003 and its amendments; And upon the recommendations of the competent committee to review the Value Added Tax calculated on employees' salaries in non-banking lending institutions at its third meeting on 27/12/2016; The Cabinet decided in its session held in Ramallah on (03/04/2017) the following:
Article One Rejection of the request by non-banking lending institutions to be exempted from Value Added Tax on their employees' salaries.
Article Two The competent authorities are tasked with implementing the provisions of this decision according to their respective jurisdictions, and it shall take effect from the date of its issuance.
Issued in Ramallah on 03/04/2017.
Rami Hamdallah Prime Minister
State of Palestine Prime Minister's Office / Ministry of Finance State of Palestine