Syria Tax & Business Guide - Deloitte

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Basic facts
Population 19.5m Inflation 8.4% (2006)*
Main languages Arabic (official), English, French GDP per head US$1,460 (2006)*
Currency Syrian pound (SYP) GDP growth 3.5% (2006)*
GDP sources 21% agriculture, 33% industry, 46% services
*Economist Intelligence Unit estimates.
Political environment

Syria is a republic. The 250-member Majlis al-Shaab (People's Assembly) is directly elected for a four-year term. The president, currently Bashar al-Assad, is head of state and is elected for a seven-year term.

The next legislative and presidential elections are due in 2007.
Foreign trade and investment
Exports US$8.2bn (2006)* Imports US$8.9bn (2006)*
*Economist Intelligence Unit estimates.

Leading export markets: Germany, Italy, France, the UAE, Lebanon, Turkey and Iraq.

Major exports: Oil and refined petroleum products, and food, vegetables, livestock, beverages and tobacco.

Oil accounts for 15Ò20% of GDP, and two-thirds of export revenue.

Nearly all sectors of the economy are open to foreign direct investment (FDI), except for power generation and distribution, air transport, port operation, water bottling, telephony, and oil and gas production and refining.
Business and financing
Business forms Limited liability company, joint stock company, branch

Other forms of business organisation include a general partnership, limited partnership, company limited by shares and joint venture.

In general, foreigners may only own up to 49% of a Syrian-registered company. However, under the Investment Law, foreign investors may increase their shareholding in a limited liability company up to 100% in respect of certain activities.
Labour environment
Unemployment rate 8.5% (2006)* Minimum wage SYP 5,880
*Economist Intelligence Unit estimate.

In February the public-sector minimum wage increased from SYP 4,800 to SYP 5,880 per month, and in May the private-sector minimum wage is also set to increase to SYP 5,880 per month.
Taxation
Corporate tax
Main rate Progressive rates to 28%

Corporate tax is charged only on income sourced in Syria. Income tax applies to the profits of companies and individuals from business income, including the disposal of business assets. The tax rates apply on a marginal basis from 10% for income up to SYP 200,000 to 28% on income exceeding SYP 3m.

The rates may be reduced in respect of income derived by certain companies: joint stock companies headquartered in Syria with 50% of their shares offered to the public (14%); companies operating under investment legislation (22%); and private banks (25%). The rate for newly established private insurance companies is 25% of net profits in the case of closed shareholding companies compared with 15% imposed on public companies.

Income from movable property is subject to tax at 7.5%; this includes dividends, interest, prizes and similar payments whether in cash or kind, including bonus share distributions.

Dividends paid by a Syrian company out of income that already has been taxed are not taxable in the hands of the recipient company; dividends paid by a non-resident company are subject to tax as movable income at a rate of 7.5%.

Income from real property is taxed at rates ranging from 14% to 60%. The tax base is an estimated rental value taking into account, among others, the propertyÌs construction, location and total surface.
Individual tax
Marginal rates to 20% on salaries

An individual is subject to the same income tax as a company in respect of business income, income from movable property and real property. Both resident and non-resident individuals are further subject to tax on their Syrian-source salary and wages. Salary and wages are taxed at marginal rates of 0% on income below SYP 5,000, and up to 20% on income over SYP 30,000.
Capital gains
Company gains taxed as income

Capital gains of companies and individuals are included in taxable income and taxed at the normal rates.
Indirect tax
No consumption taxes

There is no value-added tax (VAT) in Syria, although consumption taxes are imposed on certain luxury goods and services, including services of hotels, clubs, and international and first-class restaurants (10%); night club services, including food, drink and entertainment (30%); first-class air travel abroad (3%); private tourist vehicles (15%); gold jewellery (10%); precious stone jewellery (15%); marble (15%); weapons (15%); alcoholic drinks (35%) and carbonated drinks (10%).
Tax administration and compliance
Tax year Companies: calendar year; Individuals: not taxed

Tax is generally payable by May 31st for joint stock and limited liability companies, and March 31st for all other taxpayers. In some cases, an extension of the filing or payment date of up to 60 days may be obtained.
Additional tax information
Withholding taxes Royalties 5% + 2%; payments for goods and services 3% + 1%; payments for services 5% + 2% (company/individual); petroleum-related services 7% + 3%.
Tax treaties Syria has concluded more than 20 tax treaties.
Dividends Dividends from Syrian companies are not taxable if the profits from which they are paid have already been subject to tax. Dividends received from non-resident companies are taxable at 7.5%.
Revenue protection There are no transfer-pricing or anti-haven (CFC) legislation.
Groups There is no provision for group taxation.
Incentives Investment law; tourism incentives; free zones; investment protection.
Other taxes Stamp duty, Local administration fees, Defence surcharge, Property registration fees.