Region

Jurisdiction

Regulator

2014-01-01

Circular No. 68: Decree-Law No. 4 of 2014

The Palestine Monetary Authority and the Ministry of Finance’s Directorate General of Income Tax issued Circular No. 68/2014 and related directives to enforce Decree-Law No. 4 of 2014, which amends the Palestinian Income Tax Law. The amended law mandates a 10% withholding tax on cash profit distributions and interest from small business programs, applying to income accrued from January 1, 2014, with operational implementation commencing in 2015. Licensed financial institutions and companies are directed to deduct this tax at source prior to distributing any dividends or cash allocations.

Palestine

Palestine Monetary Authority

Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (68 / 2014)

To all banks operating in Palestine
Date: Monday, May 12, 2014

Subject: Decree-Law No. (4) of 2014

Attached for your action is Decree-Law No. (4) of 2014, issued on 11/03/2014, concerning the amendment of Decree-Law No. (8) of 2011 regarding Income Tax, published in the Palestinian Official Gazette No. (106) on 10/04/2014, along with two letters from Mr. Hamza Zloum, Director General of Income Tax, dated 23/03/2014 and 11/05/2014.

Specifically:
We reiterate the application of this decree to income accrued as of 01/01/2014, in accordance with Article (5) thereof.

Supervision and Inspection Department
Palestine Monetary Authority

Copy: Mr. Hamza Zloum, Director General of Income Tax, Respected.

www.pma.ps

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.B. 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.B. 4026
Email: info@pma.ps | Email: info@pma.ps

State of Palestine

Ministry of Finance

Directorate General of Income Tax

In the Name of Allah, the Most Gracious, the Most Merciful

State Of Palestine
Ministry of Finance
Directorate General Of Income Tax

Date: 11/05/2014
No.: 100/10/14

Mr. Ayad Nasser, Respected
Palestine Monetary Authority.

Greetings,

Subject: Amendment of Law No. 8 of 2011 pursuant to Decree-Law No. 4 of 2014.

With reference to the above subject, and based on your inquiry, and since the amended decree was published in the Official Gazette in its issue No. (106) dated 10/04/2014, I hereby affirm the contents of the aforementioned decree and its application from the beginning of the year 2014, as stated in Article (5) thereof. Furthermore, the 10% withholding on distributed income applies to income accrued in the year 2014 and will be implemented from the beginning of the year 2015 in due course.

Please accept my highest regards,

Hamza Zloum
Director General of Income Tax

Copy: His Excellency the Minister of Finance, Khalaf Allah
Respected Senior Taxpayers - Income Tax Department.

Tel.: 02-2978792
Fax: 02-2978793
P.O.BOX 795 - Ramallah
Tel: 02-2978777
P.O.B.: 795 - Ramallah

State of Palestine

Ministry of Finance

Directorate General of Income Tax

In the Name of Allah, the Most Gracious, the Most Merciful

State Of Palestine
Ministry of Finance
Directorate General Of Income Tax

Date: 12/05/2014
No.: 100/10/14

To the Respected Palestine Monetary Authority.

Greetings,

Subject: 10% Income Tax on Distributed Profits (Cash or Distributed Shares).

With reference to the above subject, and to the amendment of Decree-Law No. 8 of 2011 regarding Income Tax (attached), I request that you urgently issue a circular to the banks and companies licensed by you, requiring that before distributing any profits, whether in the form of dividend shares or cash distributions, a 10% withholding be deducted from those distributions for income tax purposes.

Please accept my highest regards,

Hamza Zloum
Director General of Income Tax

Copy: His Excellency the Minister of Finance, Khalaf Allah
Respected Senior Taxpayers - Income Tax Department.

Tel.: 02-2978792
Fax: 02-2978793
P.O.BOX 795 - Ramallah
Tel: 02-2978777
P.O.B.: 795 - Ramallah

State of Palestine

Ministry of Finance

Directorate General of Income Tax

In the Name of Allah, the Most Gracious, the Most Merciful

Decree-Law No. ( ) of 2014
Concerning the Amendment of Decree-Law No. (8) of 2011 Regarding Income Tax

President of the State of Palestine
Chairman of the Executive Committee of the Palestine Liberation Organization
Having reviewed the Amended Basic Law of 2003 and its amendments, particularly Article (43) thereof,
and Decree-Law No. (8) of 2011 Regarding Income Tax,
and based on the appointment of the Council of Ministers dated 04/03/2014,
and based on the powers delegated to us,
and in pursuit of the public interest,
and in the name of the Palestinian Arab people,

We have issued the following Decree-Law:

Article (1)

Decree-Law No. (8) of 2011 Regarding Income Tax is referred to as amended by this Decree-Law.

Article (2)

Paragraph (14) is repealed and Paragraph (16) of Article (7) of the original Law is amended to read as follows:

Capital gains arising from the sale of securities from investment portfolios.

Article (3)

Article (16) of the original Law is amended as follows:

Paragraph (5) is amended to read as follows:
Tax shall be levied at a rate of (10%) on profits, whether in the form of cash distributions, to be withheld at source.
A new paragraph bearing number (6) is added to read as follows:
Tax shall be levied at a rate of (10%) on interest arising from small business programs.

Presidential Court
12-03-2014
767

Minister's Office
Ministry of Finance
16.3.2014
Date: 13-03-2014
Signature: Minister's Office

Funding for Service Improvement
Ministry of Finance
13-03-2014
Minister's Office

Palestine Ministry
Ministry of Finance
12-03-2014
3090

State of Palestine

Ministry of Finance

Directorate General of Income Tax

In the Name of Allah, the Most Gracious, the Most Merciful

13.MAR.2014 13:24
#5871

Article (4)

Article (31) of the original Law is amended by repealing Paragraph (8) thereof.

Article (5)

Income tax shall be levied and collected on income accrued in the year 2014 and subsequent years in accordance with the provisions of this Decree-Law.

Article (6)

All provisions conflicting with the provisions of this Decree-Law are repealed.

Article (7)

This Decree-Law shall be submitted to the Legislative Council at its first session for ratification.

Article (8)

The competent authorities shall execute this Decree-Law according to their respective responsibilities, and it shall take effect from the date of its publication in the Official Gazette.

Issued in the city of Ramallah on: 11/03/2014

Mahmoud Abbas
President of the State of Palestine
Chairman of the Executive Committee of the Palestine Liberation Organization

Presidential Court
12-03-2014
767