Syria Syria 1. Overview 1.1. Government and Tax System Syria is a democratic republic with an elected executive president, a Parliament which promulgates laws and an independent judiciary system. Legislation must be passed by the Parliament and approved by the President or issued (as a Legislative Decree) by the President. It becomes law once published in the Official Gazette. All tax-related issues in Syria are governed by the Ministry of Finance. The Ministry has Directorates (of Finance) located across the country; there is one Directorate for each of the 13 Governorates in Syria. The main legislative sources for the Syrian tax system are: • Law No. 24/2003 (Income Tax Law), as amended; • Law No. 25/2003 (Tax Evasion Law); • Legislative Decree No. 56/2004 (Inheritance fees); • Legislative Decree No. 56/2004 (Inheritance fees); • Legislative Decree No. 56/2004 (Inheritance fees); • Legislative Decree No. 46/2015 (Tax on Salaries and Wages); and • Law No. 15/2021 (Real Estate Sales Tax Law). 1.2. Currency The currency of Syria is the Syrian Lira (or Syrian Pound). 1.3. Membership of International Organizations Syria is a member of numerous international organizations, including the Arab Bank for Economic Development in Africa (ABEDA), Arab Fund for Economic and Social Development (AFESD), League of Arab States (LAS), Arab Monetary Fund (AMF), World Customs Organization (WCO), Group of 24 (G-24), Group of 77 (G-77), International Bank for Reconstruction and Development (IBRD), International Chamber of Commerce (ICC), International Development Association (IDA), Islamic Development Bank (IDB), International Fund for Agricultural Development (IFAD), International Finance Corporation (IFC), International Labor Organization (ILO), International Monetary Fund (IMF), Organization of Arab Petroleum Exporting Countries (OAPEC). However, most of these memberships have been suspended due to the current war in Syria. 1.4. Official Websites The following are the official relevant tax, finance, or other authority websites for Syria: • Ministry of Finance — www.syrianfinance.gov.sy • Tax Committee — www.syriantax.gov.sy • Syrian Parliament — http://parliament.gov.sy/arabic/index.php 1.5. Automatic Exchange of Information Currently, Syria is not a party to any agreements for the automatic exchange of information. 2. Corporate Tax Computation and Administration 2.1. Residence, Taxable Status, Entity Characterization 2.1.1. Residence A company is a resident of Syria if it is incorporated, established, or formed in Syria.1Legislative Decree No. 29/2011 (Companies Law), art. 10. 2.1.2. Taxable Status Companies are subject to corporate income tax on their taxable income. SeeSection 3.1.1 and Section 3.1.2. 2.1.3. Legal Classification of Nonresident Entities Income tax is levied on each and every person, natural or legal, gaining any profit or income from activities performed in Syria. 2Law No. 24/2003 (Income Tax Law), art. 3. Nonresident entities conducting activities, through a branch, office or agent, in Syria are subject to income tax on profits derived from activities conducted in Syria. 2.2. Corporate Tax Base 2.2.1. Resident Corporations Syria generally operates a territorial tax system on business income. Resident companies whose income is derived from activities carried out in Syria are subject to income tax. Business income derived from activities conducted outside Syria is generally not taxable in Syria. 3Law No. 24/2003 (Income Tax Law), art. 3. Exceptions include the tax on capital income, which is levied on qualifying foreign-source income provided the income is declared in the corporation's accounts. 4Law No. 24/2003 (Income Tax Law), arts. 84 and 98. Corporate capital gains are subject to capital gains tax (see Section 4.1 below). However, Syrian law prohibits double taxation on income/profit generated in Syria. 2.2.2. Nonresident Corporations Nonresident companies are taxable on Syrian-source income only. 5Law No. 24/2003 (Income Tax Law), art. 3. Foreign corporations with branches, offices or having an agent in Syria are treated as resident companies for tax purposes on activities conducted/performed in Syria. See alsoSection 2.1.3above. 2.2.3. Non-Corporate Business Entities 2.2.3.1. Recognition In Syria, non-corporate business entities exist, such as general partnerships, limited partnerships and sole proprietorships. Nonresidents can establish a non-corporate business entity in Syria. However, this entity must be registered at the Commercial Register and the manager must be a resident of Syria (citizen or legal resident). 2.2.3.2. Tax Status Partnerships and sole proprietorships are subject to the same tax legislation as corporate entities. 6Law No. 24/2003 (Income Tax Law). 2.2.4. Permanent Establishments 2.2.4.1. Domestic Law Definition Syrian tax law does not specifically define a permanent establishment. However, it is usually regarded as a fixed place of business, an office space or a place of management of the business. Resident companies must have a head office/headquarters in Syria. Nonresident companies are only taxed on profits arising from activities conducted in Syria and may be present in Syria through a branch, office or agent. 2.2.4.2. Treaty Definition Most Syrian treaties define a "permanent establishment" as a fixed place of business in which a business is wholly or partly carried out, including a place of management, branch, office, factory, workshop, mine and quarry, or other place of extraction of natural resources, as well as a construction site. 2.2.4.3. Creation via Performance of Services Most Syrian treaties define a "permanent establishment" as a fixed place of business in which a business is wholly or partly carried out, including a place of management, branch, office, factory, workshop, mine and quarry, or other place of extraction of natural resources, as well as a construction site. 2.2.4.4. Creation via Customer Downloads or Website Access Services provided through an online download platform (e-commerce) for the benefit of Syrian customers are not sufficient to trigger a "permanent establishment" within Syria. 2.2.4.5. Creation via Cloud Services The Syrian tax regulations and the signed tax treaties do not consider internet cloud services provided by nonresident companies as triggering the creation of a "permanent establishment". 2.3. Taxable Year 2.3.1. Default Taxable Year In Syria, "Fiscal Year" or "Business Year" is the calendar year beginning January 1 and ending on December 31. However, the Ministry of Finance may issue a decision to use a different tax year for a specific corporation, if necessitated by the nature of the business of the company. 7Law No. 24/2003 (Income tax Law), art. 5. 2.3.2. Reference Year for Computation of Tax In a given tax year, taxpayers are subject to tax on income earned in that year. Thus, returns filed in 2025, with regard to the taxpayer's liability for the 2024 tax year, will generally report income from 2024 and calculate tax on the basis of the tax laws applicable in 2024. 2.4. Computing Taxable Income 2.4.1. General In Syria, corporate taxable income is generally measured by total gross revenue reduced by expenses necessary for the normal operation of the business. 8Law No. 24/2003 (Income Tax Law), art. 7. 2.4.2. Exempt Income Certain taxpayers (e.g., some cooperative societies) are exempt from the income tax on real profits. 9Law No. 24/2003 (Income Tax Law), art. 4(a). 2.4.3. Inventory Valuation and Inventory Flow In Syria, inventory must be valued based on: • cost; • market value; or • both the cost of inventory and the market value, whichever has a lesser value. A company may, at its sole discretion, use one of these methods for inventory valuation. 2.4.4. Depreciation or Capital Allowances The following tangible assets may be depreciated using the straight-line method: •  machinery and equipment; •  furniture; •  industrial and commercial plants; •  cost of establishing the business. 10Law No. 24/2003 (Income Tax Law), art. 7. The depreciation of buildings is not permissible by law. Furthermore, intangibles are normally non-depreciable assets. Syrian law and different internal directives set out the percentage of depreciation for each asset. Depreciation rates and the estimated useful life of assets are set out both in legislation and by the tax authorities. 2.4.5. Reserves In general, mandatory reserves, optional reserves and depreciation reserves which have not been used for the purpose for which they were allocated are not deductible for tax purposes. However, qualifying reserves set aside by banks and insurance firms are deductible. 11Law No. 24/2003 (Income Tax Law), art. 7. 2.4.6. Special Allowances Philanthropic donations equivalent to up to 4 percent of net profits are deductible for income tax calculation purposes. 1Law No. 24/2003 (Income Tax Law), art. 7(b)(7), as inserted by Legislative Decree No. 30 of 2023, art. 2. 2.4.7. Special Provisions or Limits Applicable to Foreign Companies A foreign entity that operates in Syria through a branch or office is considered a resident company for tax purposes and is subject to income tax on activities conducted in Syria.12 13Law No. 34/2008, art. 3. 2.5. Intercompany Dividends Syrian law prohibits the double taxation of income and/or profit. Thus, dividends that are distributed by a Syrian corporation to another corporation, and which have been generated from previously taxed income, are not subject to tax in Syria. The same applies to dividends received by nonresident corporations subject to withholding tax. 2.6. Special Tax Regimes 2.6.1. Economic Zones In Syria, profits of a company established within in the Free Zone are exempt from tax provided that the company's products and inventory either remain in the Free Zone or are re-exported to other countries. 14Legislative Decree No. 40/2003, art. 7; Law 24/2003 (Income Tax Law), art 3. However, employees of such companies are subject to the salaries and wages tax. 15Law No. 24/2003 (Income Tax Law), art. 66. (see Section 6.3.1). 2.6.2. International Finance or Holding Companies International finance or holding companies are treated the same way as other resident companies in Syria. 2.6.3. Research and Development Companies and Activities International finance or holding companies are treated the same way as other resident companies in Syria. 2.6.4. Other Special Regimes Law 18/2021, the Investment Law, grants tax incentives for projects of national interest. Foreign investors may be granted an exemption from income tax for a period of 5 years from the investments' commencement. In addition, the Investment Law provides for the exemption of capital equipment from VAT. 16Law No. 18/2021, art. 21. Touristic, hospitality and other recreational investments are eligible for a 75 percent reduction on income tax for a period of 10 years. Some industrial projects benefit from exemptions ranging from 50 to 75 percent on income taxes, including those pertaining to technology, medicine, pharmaceuticals, renewable energy, waste recycling, and artisanal projects. 17Law No. 18/2021, art. 21. Under the Income Tax Law, certain companies and businesses within the tourism sector are subject to reduced flat rates of tax as follows: 18Legislative Decree No. 51/2006, art. 6. •  income tax — 2.5 percent of net profits; •  payroll tax (tax on salaries and wages) — 0.5 percent of net income. Special incentives, in the form of exemptions from the income tax on real profits, are available for certain industries (such as air and maritime transportation and agriculture). 19Law No. 24/2003 (Income Tax Law), art. 4. Special exemptions for specific zones Businesses and other taxpayers in the old, heritage centers of the cities of Aleppo, Homs and Deir El-Zor benefit from tax exemptions and certain debt cancellations to aid restoration of those centers. Exemptions include: 2Decree No. 13/2022. •  until December 31, 2023, all taxes, fees and other charges, including those imposed on restoration and rehabilitation works; and •  until December 31, 2027; •  income taxes on net profits from professional and artisanal business activities; •  income taxes on employee's salaries; and •  real estate taxes and stamp duty. In addition, until December 31, 2024, property owners in the earthquake-struck provinces of Aleppo, Latakia, Hama, and Idlib can benefit from various exemptions, including all taxes and various fees, for the total or partial rebuilding or rehabilitation of their properties. 3Decree No. 3/2023. 2.7. Double Taxation Protection 2.7.1. Mechanics Syrian common law prohibits double taxation. Where taxing rights have been allocated to Syria under a double taxation treaty, the provisions of the treaty will determine the mechanism by which protection from double taxation may be obtained. Generally, Syrian law focuses on revenues generated or profits generated within Syria (as opposed to revenues or profits generated outside the country). 2.7.2. Treaty or Statutory Priority Where a valid treaty exists, the priority will depend entirely on the provisions of the treaty. For treaty information, including the number of agreements signed or in force, original treaty texts, translations, and consolidations and any modifications made by the Multilateral Instrument, if applicable, see the International Tax Treaties Collection. 2.7.3. Source of Interpretation Most double taxation and tax avoidance tax treaties signed by Syria are based on the OECD model. Generally, the model treaty's provisions set the rules and guidelines for the tax authorities. 2.8. Returns and Filing Dates 2.8.1. Filing Deadline Limited liability companies, joint stock companies, holding companies, corporations, public establishments and large/major taxpayers 20The Ministry of Finance determines which specific taxpayers fall into the category of "large/major taxpayers". must submit their tax return by May 31 of the following year. All other types of companies, including sole proprietorships, must submit their tax return by March 31 of the following year. 21Law No. 24/2003 (Income Tax Law), art. 13(a), as amended by Legislative Decree No. 51/2006, art. 2. 2.8.2. Filing Method The corporate tax return must be filed on paper. Planning Point: Legislative Decree No. 30/2023, article 28 provides for the Tax Administration to introduce an electronic system for taxpayers to organize accounts and issue invoices. The provisions also provide for taxpayers to be notified of documentation related to verification and collection of taxes, which suggests electronic filing may be introduced in due course. 2.8.3. Extensions An extension for filing a tax return may only be obtained by an exclusive decision issued by the Minister of Finance. The extension period cannot exceed 60 days. 22Law No. 24/2003 (Income Tax Law), art. 13(a), as amended by Legislative Decree No. 51/2006, art. 2. 2.8.4. Penalties Noncompliance with the filing requirements can result in a penalty of up to 120 percent of the tax due for failure to file the return and any relevant attachments, and up to 200 percent of any tax amount resulting from a discrepancy found as a result of information omitted from the return or attachments. The Tax Administration has power to estimate the taxpayer's profits in the absence of a return or other information, on which it can base the penalties charged. 23Law No. 24/2003 (Income Tax Law), arts. 13 and 18, as amended by Legislative Decree No. 30/2023, art. 7. 2.9. Payment Mechanics 2.9.1. Internal Withholding on Resident Companies Syria imposes a withholding tax on qualifying capital income at a rate of 10 percent on resident companies (from September 1, 2023; previously 7.5 percent). 24Law No. 24/2003 (Income Tax Law), arts. 83, 84 (as amended by Legislative Decree No. 30/2023, art. 24), and 98. Further, qualifying income of certain companies is subject to withholding tax at various flat rates, including a 3 percent withholding tax on the value of specified construction works (see also Section 10.1 for further examples). These flat rates are levied in place of the standard progressive rates for the income tax on real profits (See Section 3.1.1) and are final. 25Law No. 60/2004, art. 1. 2.9.2. Schedule for Tax Payments or Deposits A company must file a tax return as stated in Section 2.8.1 Taxpayers with a filing deadline of March 31 (see Section 2.8.1) have a grace period until April 30, to discharge their estimated tax liability. Taxpayers with a filing deadline of May 31 (see Section 2.8.1) have a grace period until June 30, to discharge their estimated tax liability. 2626 Law No. 24/2003 (Income Tax Law), art. 14(d). After the tax return has been filed and the tax liability discharged, the Ministry of Finance audits the submitted tax return. In the event the Ministry amends the profits declared on the tax return, it will impose a "Provisional Levy" 27The "Provisional Levy" is a revised figure for the taxpayer's tax liability for the relevant tax year. on the taxpayer and issue formal written notification to the taxpayer. The "Provisional Levy" is a revised figure for the taxpayer's tax liability for the relevant tax year. If the taxpayer does not agree with the amount of the "Provisional Levy" imposed, it can withhold paying the tax and, within 30 days from the date of the formal notification, appeal the Ministry of Finance's decision to the Appeal Committee. The taxpayer may appeal the Appeal Committee's decision to the Committee of Reconsideration, whose decision is final. 28Law No. 24/2003 (Income Tax Law), arts. 24–35. 2.9.3. Electronic Payments In Syria, there is no electronic payment of taxes. 2.9.4. Interest and Penalties Nonpayment of tax may trigger imposition of a penalty at a rate of up to 30 percent. 29Law No. 24/2003 (Income Tax Law), art. 107. If a decision by the Committee of Reconsideration (see Section 2.9.2) is rendered during the months of November and December: •  companies that pay their taxes during the month of July of the following year shall be subject to a fine of 5 percent of the amount of tax paid, to be added to their tax liability; •  companies that pay their taxes during the months of August until the end of the following year shall be subject to a 1 percent per month of the amount of tax paid, to be added to their tax liability (in addition to the 5 percent for the month of July); and •  if the company pays its taxes the following year and the years thereafter, a fine of up to 20 percent will be added to the above fines. 2Law No. 2/1983, arts. 2 and 6. See also Section 2.8.4. 2.10. Statute of Limitations The general statute of limitations for the tax authorities to assert that there is a deficiency, inaccuracy or tax error with respect to the payment of tax is 15 years. 31Legislative Decree No. 84/1949 (Civil Code), art. 372. Corporations, on the other hand, must maintain their company records for five years from the date of submission of the tax return, subject to certain conditions. 32Law No. 24/2003, art. 31(e). 3. Corporate Tax Rates 3.1. National Taxes 3.1.1. Corporate Tax Rates Current rate: 20 percent standard rate (from January 1, 2024); other rates ranging from 10 percent to 25 percent. Holding companies, joint-stock companies, and limited liability companies are subject to a standard corporate income tax rate of 20 percent on their net profits Joint-stock companies that have offered at least 40 percent of their shares to the public for subscription are subject to a corporate income tax rate of 15 percent on their net profits. 33Law No. 24/2003 (Income Tax Law), art. 16(b), as amended by Legislative Decree No. 30/2023, art. 4. Other businesses (including sole proprietorships) are taxed progressively on net profits (subject to the exemption allowance for individuals; see Section 6.2.4). From January 1, 2024, the progressive tax rates on net profits are as follows: •  up to 10,000,000 lira — 10 percent; •  from 10,000,001 lira to 30,000,000 lira — 14 percent; •  from 30,000,001 lira to 100,000,000 lira — 18 percent; •  from 100,000,001 lira to 500,000,000 lira — 22 percent; and •  over 500,000,000 lira — 25 percent. 34Law No. 24/2003 (Income Tax Law), art. 16(a), as amended by Legislative Decree No. 30/2023, art. 4. Companies are also subject to a local administration fee and a reconstruction fee (see Section 9.4). For income tax rates applicable to income from rented real estate, see Section 9.3.2. For special rates applicable to the hydrocarbons and financial sectors, see Section 10.1 and Section 10.2, respectively. 3.1.2. Alternative Tax Regime In Syria, there is no alternative tax regime. 3.1.3. Special Reduced Rates or Regimes Qualifying industrial facilities operating in rural areas are eligible for a 2 percent reduction in the applicable tax rates set out in Section 3.1.1. Subject to certain conditions, the following reductions in the applicable tax rates set out in Section 3.1.1 are available for industrial facilities employing: •  25 employees or more — 1 percent reduction; •  75 employees or more — 2 percent reduction; and •  150 employees or more — 3 percent reduction. Additionally, if a decision by the Committee of Reconsideration (see Section 2.9.2) is rendered during the months of November and December, the following applies: •  companies that pay their taxes during the months of January and February of the following year will receive a 4 percent reduction on their taxes; •  companies that pay their taxes during the months of March and April of the following year will receive 3 percent reduction on their taxes; and •  companies that pay their taxes during the months of May and June of the following year will receive no reduction on their taxes. 35Law No. 2/1983, art. 6. 3.1.4. Special Additional Taxes or Levies Companies are also subject to a local administration fee and a reconstruction fee (see Section 9.4). 3.2. State, Cantonal, Provincial or Other Local Taxes 3.2.1. Main Rates In Syria, there are no local taxes on corporate profits. 3.2.2. Reduced Rates In Syria, there are no local taxes on corporate profits. 3.2.3. Income Tax Base In Syria, there are no local taxes on corporate profits. 3.2.4. Income Tax Deductions In Syria, there are no local taxes on corporate profits. 3.2.5. Incentives In Syria, there are no local taxes on corporate profits. 3.2.6. Non-Income Taxes in States In Syria, there are no such taxes. 3.3. Taxes Imposed as a Penalty In Syria, there are no taxes imposed as a penalty. 4. Corporate Tax Capital Gains, Losses, Group Treatment 4.1. Taxation of Corporate Capital Gains In Syria corporate capital gains, for both resident and nonresident companies, are included in the company's accounts (as income) and are subject to a capital gains tax which is computed based on a progressive system. 36Law No. 31/1975; Law No. 15/2021 (Real Estate Sales Tax Law). Corporate capital gains realized from the sale of real estate are subject to tax at a rate of 5 percent, subject to certain conditions. 37Law No. 24/2003 (Income Tax Law), art. 21. 4.2. Definition of Corporate Capital Gains Income is defined as the profit from operation of the business, while capital gain is the profit realized from non-operational activities, such as the disposal of assets. 38Generally implied from Law No. 24/2003 (Income Tax Law), Law No. 31/1975, and Law No. 15/2021 (Real Estate Sales Tax Law). In Syria, there is no distinction between short and long-term capital gains for tax purposes. 4.3. Computation Capital gains in Syria are calculated by deducting the acquisition costs and sale costs from the sale price. 39Law No. 31/1975; Law No. 15/2021 (Real Estate Sales Tax Law). 4.4. Corporate Combinations and Divisions 4.4.1. Mergers In Syria, there are no provisions permitting tax-free mergers of companies. 4.4.2. Transfers of Corporate Property In Syria, shareholders can transfer their property to a corporation in exchange for shares subject to certain conditions. The value of such properties is treated as a capital contribution. 40Legislative Decree No. 29/2011 (Companies Law), arts 31, 56 and 92; Law No. 24/2003 (Income Tax Law), art. 21(c). Any other transfer of corporate property is subject to the tax on real property transactions (see Section 9.3.1 and Section 9.3.2). 41Law No. 15/2021 (Real Estate Sales Tax Law). 4.4.3. Share Transfers In Syria, there are no provisions addressing share for share exchanges, aside from as stated in Section 4.4.2. 4.4.4. Divisions or Separations In Syria, there are no provisions addressing demergers. 4.5. Position of Losses From Business Operations 4.5.1. Definition In Syria, losses from the operation of a business are the reported loss that a company files and is accepted by the Ministry of Finance. Foreign income and losses are not taxed in Syria. 4.5.2. Treatment n Syria, losses from the operation of a business cannot be carried back to prior tax years. However, they can be carried forward for a period of five years, subject to approval by the Ministry of Finance. 42Law No. 24/2003 (Income Tax Law), arts. 6 and 12. 4.5.3. Losses After Change in Ownership In Syria, there are no provisions restricting the offset of losses after a change of ownership. 4.6. Group Treatment 4.6.1. General Rule Syrian law does not permit group reporting. 4.6.2. Definition of Group Syrian law does not permit group reporting. 4.6.3. Special Aspects Syrian law does not permit group reporting. 5. Corporate Withholding Taxes on Nonresident Corporations 5.1. Dividends Dividends paid to nonresident corporations will have been generated from previously taxed income, and so are not subject to withholding tax. 43Law No.24/2003 (Income Tax Law), art. 61, as amended by Law No. 60/2004, art. 9. Law No.24/2003 (Income Tax Law), art. 61, as amended by Law No. 60/2004, art. 9. 5.2. Interest A 10 percent withholding tax (from September 1, 2023; previously 7.5 percent) is levied on interest paid to nonresident companies. 44Law No. 24/2003 (Income Tax Law), art. 84, as amended by Legislative Decree No. 30/2023, art. 24. 5.3. Royalties A 5 percent withholding tax is levied on royalties paid to nonresident companies. This withholding tax is final. 45Law No. 24/2003 (Income Tax Law), art. 61, as amended by Law No. 60/2004, art. 9. Additionally, a 2 percent withholding payroll tax also applies. See Section 9.1. 5.4. Services In Syria, fees paid to nonresidents for services performed in Syria are subject to a 5 percent withholding tax in addition to a 2 percent withholding tax on salaries and wages. These withholding taxes are final. 46Law No. 24/2003 (Income Tax Law), art. 61, as amended by Law No. 60/2004, art. 9. (See also Section 10.1). 5.5. Other Withholding Taxes The only other withholding tax is the payroll tax (tax on salaries and wages), which levied at a rate of 2 percent. This is a final withholding tax. 47Law No. 24/2003 (Income Tax Law), art. 61, as amended by Law No. 60/2004, art. 9. 5.6. Special Tax Havens Rates There are no special tax haven rates in Syria. 6. Personal Taxes 6.1. Domicile and Residency Requirements An individual who acquires a formal residency card is considered a resident of Syria for tax purposes. Planning Point: Residency cards are most commonly required when a nonresident individual wishes to work in Syria. In such cases, the individual must also acquire a formal work permit, rental agreement establishing his/her address in Syria, in addition to completing other routine administrative requirements. 6.2. Income Tax Base 6.2.1. Tax Base for Residents In Syria, individuals are generally taxed only on domestic source income (income generated from activities conducted in Syria). 48Law No. 24/2003 (Income Tax Law), arts. 3 and 66. Exceptions include the tax on capital income, which is levied at a rate of 10 percent on qualifying foreign-source income (from September 1, 2023; previously 7.5 percent). 49Law No. 24/2003 (Income Tax Law), arts. 3 and 66. Further, public sector and government employees resident abroad and performing duties abroad are subject to tax in Syria, provided they receive a salary from the Syrian government for said duties. 6.2.2. Tax Base for Nonresidents Nonresident individuals are subject to withholding tax on various sources of income from Syria. See Section 5.1 6.2.3. Personal Income Subject to Income Tax All types of income and employee benefits are generally subject to tax provided such benefits are regular and continuous. Net profits/earnings from the practice of professions and trades of an industrial, commercial and/or non-commercial nature is subject to income tax at the rates and thresholds set out in Section 6.3.1. An irregular and a one-time benefit (e.g., a bonus) is subject to tax at a rate of 10 percent. 50Law No. 24/2003 (Income Tax Law), art 68, as amended by Legislative Decree No. 48/2005, art. 1. Qualifying investment income, whether Syrian- or foreign-source, is subject to tax at a rate of 10 percent (from September 1, 2023; previously 7.5 percent). 51 Law No. 24/2003 (Income Tax Law), arts. 83, 84 (as amended by Legislative Decree No. 30/2023, art. 24), and 98. 6.2.4. Deductions and Allowances From January 1, 2024, the first 3 million lira of net annual profits are exempt from the income tax on real profits (see Section 6.3.1). 52Law No. 24/2003 (Income Tax Law), art. 20, as amended by Legislative Decree No. 30/2023, art. 10. For details of the payroll tax (tax on salaries and wages) please see Section 9.1. 6.3. Main Rates and Bands 6.3.1. Individual Tax Rates Employed individuals earning income from salaries and wages are subject to progressive income tax rates. From September 1, 2023, the monthly income bands and progressive income tax rates (subject to the exemption allowance; see Section 6.2.4) are as follows: •  up to 250,000 lira — 5 percent; •  from 250,001 lira to 450,000 lira — 7 percent; •  from 450,001 lira to 650,000 lira — 9 percent; •  from 650,001 lira to 850,000 lira — 11 percent; •  from 850,001 lira to 1,100,000 lira — 13 percent; and •  above 1,100,000 lira — 13 percent. 53Law No. 24/2003 (Income Tax Law), art. 68(a), as amended by Legislative Decree No. 30/2023, art. 19. Lump sum salary and wage payments are subject to a 5 percent income tax rate. 4Law No. 24/2003 (Income Tax Law), art. 68(b), as amended by Legislative Decree No. 30/2023, art. 19. Individuals who earn income from professions, trades and other commercial activities are subject to progressive business income tax rates (see Section 3.1.1). For nonresident individuals, see Section 6.2.2. Investment income is subject to tax at a rate of 10 percent (from September 1, 2023; previously 7.5 percent), 54Law No. 24/2003 (Income Tax Law), arts. 83, 84 (as amended by Legislative Decree No. 30/2023, art. 24), and 98. subject to certain conditions and exceptions. 55Law No. 24/2003 (Income Tax Law), arts. 83–103. For income tax rates applicable to income from rented real estate, see Section 9.3.2. 6.3.2. Individual Returns, Filing Dates, and Payment Employers are required to make quarterly declarations detailing the taxes deducted at source from their employees' salaries and wages. Payment of taxes withheld must be made quarterly or monthly. The tax withheld from salaries and wages is final. 5Law No. 24/2003 (Income Tax Law), art. 77, as amended by Legislative Decree No. 30/2023, art. 22. Every individual must file a separate tax return; joint filing is not permitted in Syria. A tax return must be filed by March 31 of the following year. 56Law No. 24/2003 (Income Tax Law), art. 13(a)(2), as amended by Legislative Decree No. 51/2006, art. 2. The return must be filed in writing; electronic filing is not available. Taxes must be paid by April 30 of the following year; 57Law No. 24/2003 (Income Tax Law), art. 14(d). electronic payment is not available. Thus, an individual must file a tax return by March 31, and discharge their tax liability by April 30 of each year, with respect to income generated the previous tax year. Nonpayment of tax may trigger imposition of a penalty at a rate of up to 30 percent. 58Law No. 24/2003 (Income Tax Law), art. 107. 6.4. Dividends 6.4.1. Domestic Corporations Dividends paid by a resident corporation from previously taxed income are exempt from tax upon distribution, regardless of whether they are paid to resident or nonresident individuals. 59Based on Syrian common law, which prohibits more than one tax being levied on the same item of income. 6.4.2. Foreign Corporations Dividends paid by a nonresident company to a resident individual, and which are derived from works performed or income generated in Syria, are generally subject to a 10 percent tax (from September 1, 2023; previously 7.5 percent), subject to certain conditions. 60Law No. 24/2003 (Income Tax Law), arts. 83 and 84 (as amended by Legislative Decree No. 30/2023, art. 24). 6.5. Interest 6.5.1. Domestic Borrowers A 10 percent tax (from September 1, 2023; previously 7.5 percent) is levied on interest paid to individuals, both resident and nonresident, 61Law No. 24/2003 (Income Tax Law), arts. 83 and 84 (as amended by Legislative Decree No. 30/2023, art. 24). subject to certain exemptions. 62Law No. 24/2003 (Income Tax Law), arts. 83 and 84 (as amended by Legislative Decree No. 30/2023, art. 24). 6.5.2. Foreign Borrowers A 10 percent tax (from September 1, 2023; previously 7.5 percent) is levied on interest paid to resident individuals, 63Law No. 24/2003 (Income Tax Law), arts. 83, 84 (as amended by Legislative Decree No. 30/2023, art. 24), and 98. subject to certain exemptions. 64Law No. 24/2003 (Income Tax Law), art. 105. 6.6. Social Security/National Insurance Payments 6.6.1. Employer Tax or Contribution Under the Syrian social security system, employer contributions, based on employees' salaries, are as follows: •  old age, disability and death benefits — 14 percent; •  occupational injury insurance — 3 percent; and •  occupational injury insurance — 3 percent; and 6.6.2. Employee Tax or Contribution The employee social security contribution rate is 7 percent. 6.6.3. Employee Tax Collection Mechanism The employee social security contribution rate is 7 percent. •  allow the employer to deduct a monthly contribution from his/her salary; or •  pay the contribution directly to the proper authority. Planning point: It is advisable that the employee social security contribution be deducted directly from the employee's salary/wages and paid by the employer in order to prevent any future difficulties. 6.7. Royalties and Rents 6.7.1. Domestic Licensors As stated by different local directives issued by Syrian Municipalities and the Ministry of Finance, a 10 percent fee is levied when renting a property; the tax is collected at the time of signing the rental agreement. See also Section 9.3.2. 6.7.2. Foreign Licensors Syrian law does not distinguish between residents and nonresidents for tax purposes with respect to rental properties. See Section 6.7.1 above. 7. Transfer Pricing Policies 7.1. Application In Syria, there are no specific transfer pricing rules. However, businesses whose centre of work is located outside Syria and businesses affiliated with those located outside Syria, and whose profits are transferred indirectly to businesses outside Syria either by an increase or decrease in the sale or purchase price, or by any other method, are subject to tax after the aforementioned profits have been recorded in their accounts. If this cannot be done, then the costs are verified by benchmarking against similar firms. 65Law No. 24/2003 (Income Tax Law), art. 11. 7.2. Permissible Pricing Methods In Syria, there are no specific transfer pricing rules. 7.3. Penalties for Improper Pricing In Syria, there are no specific transfer pricing rules. 7.4. Advance Rulings or Pricing Agreements In Syria, there are no specific transfer pricing rules. 7.5. Documentation In Syria, there are no specific transfer pricing rules. 8. Anti-Avoidance Provisions 8.1. General Anti-Avoidance Provisions Law 24/2003 imposes fines and imprisonment for individuals that attempt to evade their tax liabilities. 8.2. Thin Capitalization/Other Interest Deductibility Rules In Syria, there are no thin capitalization/interest deductibility rules. 8.3. Controlled Foreign Company (CFC) Rules In Syria, there are no controlled foreign company rules. 9. Other Taxes 9.1. Payroll Taxes Aside from income taxes and social security contributions generally withheld at source by employers from their employees' salaries and wages (see Section 6.3.1 and Section 6.6), and a specific payroll tax for the oil and gas sector (see Section 10.1), there are no other payroll taxes in Syria. 9.2. Capital Taxes (Capital Duties) In Syria, there are general minimal fees, in addition to a stamp duty of 0.4 percent of a company's original contributed capital, or of any subsequent increase in its contributed capital. 69Legislative Decree No. 44/2005, Annex, Table No. 1, items 7 and 8, as amended by Legislative Decree No, 24/2011, art. 4. 9.3. Property Taxes 9.3.1. Transfer Taxes, Including Real Property Transactions In Syria, the real estate sales tax is usually paid by the seller based on the actual market value of the property (as determined in accordance with Ministry of Finance rules). The real estate sales tax rate depends on the type of property sold, as follows: 6Law No. 15/2021 (Real Estate Sales Tax Law), art. 5. •  land — 1 percent or 2 percent, depending on location; •  residential property — 1 percent; and •  nonresidential (i.e., commercial) property — 3 percent. In the event real estate is transferred as a gift to a spouse, descendants and/or ascendants, a sales tax equivalent to 15 percent of the tax rates listed above applies (e.g., 0.15 percent for residential property). Other gifts of real estate are subject to the full tax rates listed above. 7Law No. 15/2021 (Real Estate Sales Tax Law), art. 7. Planning Point: Note that a buyer of real estate in Syria must pay a deposit equivalent to 50 percent of the total amount of the purchase price, in Syrian lira, into the seller's bank account. 8Prime Ministry Decision No. 7 M.W. dated February 13, 2022; Prime Ministry Decision No. 9 M.W. dated February 1, 2023. 9.3.2. Real Property Taxes income tax regime, based on the annual rent stated in the lease agreement and the property type: 9Law No. 15/2021 (Real Estate Sales Tax Law), art. 16. •  for residential property — 5 percent, provided the income tax amount is not less than 0.03 percent of 100 percent the property's actual market value if unfurnished, or 125 percent of the actual market value if furnished; and •  for nonresident (i.e., commercial) property — 10 percent, provided the income tax amount is not less than 0.06 percent of the property's actual market value. For these purposes, actual market value is determined in accordance with Ministry of Finance rules. 9.3.3. Taxes on Movable Property Syria does not impose any taxes on movable property. 9.3.4. Fixed Asset Taxes Syria does not impose any taxes on movable property. 9.4. Miscellaneous Taxes In Syria, miscellaneous taxes include the following: •  Inheritance and Gift Tax is regulated by Legislative Decree 56/2004. •  Customs duties and fees are regulated by the Ministry of Finance. The Ministry issues the list of custom fees and taxes for each specific item. •  A local administration fee levied at a rate of 10 percent. 77The local administration fee is set annually by the local authorities. •  A reconstruction fee is levied at a rate of 10 percent. 78Law No. 13/2013, art. 1, as amended by Legislative Decree No. 3/2016, art. 1, and subsequently amended by Law No. 46/2017, art. 1. Special exemptions for specific zones 10. Special Industries 10.1. Oil, Gas and Mineral Extraction Income from Syrian resident companies operating in the oil, gas, and mineral extraction fields is generally taxed in the same way as income generated by other companies in Syria (see Section 2.1 and Section 3.1). Net profits of oil and gas investment companies are subject to an income tax rate of 35 percent. 10Law No. 24/2003 (Income Tax Law), art. 16(b), as amended by Legislative Decree No. 30/2023, art. 4. Nonresident companies operating in the oil and gas industry are subject to a withholding tax of 7 percent on income from services rendered, in addition to a 3 percent payroll withholding tax (tax on salaries and wages). Both withholding taxes are final. 80Law No. 60/2004, art. 1. 10.2. Banking and Finance The taxable income of companies operating in the banking, insurance and financial brokerage sectors is generally determined in the same way as income generated by other companies in Syria (see Section 2.1). The net profits of operating banks, insurance and reinsurance companies, and financial brokerage companies are subject to an income tax rate of 25 percent. 11Law No. 24/2003 (Income Tax Law), art. 16(b), as amended by Legislative Decree No. 30/2023, art. 4. The local administration fee also applies (see Section 9.4). However, private banking legislation provides for a reduced rate of 15 percent, and exemption from the local administration fee, if more than 50 percent of the shares in the company are publicly owned. 82Legislative Decree No. 43/2005, art. 42. 11. About the Author Georges Sioufi and George Bassous SRDB Law Firm, Paris Last reviewed/updated July 19, 2024