Confirmed directly from the Somalia Ministry of Finance / Revenue Directorate's own Income Tax Manual for the Income Tax Act 2025 (ITA 2025, effective May 11, 2025, replacing the prior 1966 Direct Taxation Law). Corporate Income Tax for resident corporations is tiered by sales, not a single flat rate: a flat USD 150 for annual sales under USD 10,000; 1.5% of sales between USD 10,000 and USD 50,000; and 15% of taxable profit for sales above USD 50,000 (Large and Medium Taxpayers). Non-resident corporations pay a flat 18% rate. Tax is charged on taxable profit (sales less legitimate business expenses), not on gross sales, except at the lowest tier.
Confirmed directly from the same primary source. Personal Income Tax (PIT) for resident individuals is progressive on annual chargeable income: 0% on the first USD 1,200, 6% on the next band up to USD 6,000, 12% up to USD 18,000, and 18% on income above USD 18,000. Non-resident individuals pay a flat 18% rate; resident individuals under age 18 pay a flat 20% rate. Employers withhold PIT monthly from salaried employees using equivalent monthly bands (0% up to USD 100/month, 6% up to USD 500, 12% up to USD 1,500, 18% above that), and remit by the 15th of the following month - no deductions are allowed against salaried employment income.
5% sales tax (reduced from a prior 10% rate around 2025-2026 per Ministry of Finance and Planning data).
Per Article 77 of the ITA 2025, an individual is resident in Somalia for a year of assessment if any of the following applies: they have a permanent home in Somalia; they are a Somali citizen (unless they have a permanent home outside Somalia available for the whole year); they are present in Somalia for 183 days or more (aggregate) in any 12-month period commencing or ending during the year; or they are a Federal or State Government employee posted abroad. A corporation is resident if incorporated, formed, or established in Somalia, or if its effective management is in Somalia at any time during the year. Resident persons are taxed on worldwide income from employment, business, and investment; non-residents are taxed on Somalia-source income, plus the worldwide income of any Somali permanent establishment (a fixed place of business maintained for 90+ days in any 12-month period).
No Controlled Foreign Company regime was identified in the ITA 2025 provisions reviewed this session. Given Somalia's tax system was comprehensively rebuilt in 2025, this reflects the current law reviewed rather than an assumption carried over from the old 1966 framework, but a dedicated section-by-section search for CFC-specific provisions was not exhaustively completed - flagged as a gap rather than a confirmed absence.
No statutory thin capitalization ratio was identified in the ITA 2025 provisions reviewed this session.
No domestic FBAR/Form 8938-equivalent requiring Somalia residents to self-report their own foreign accounts was identified. Institutional-level CRS/FATCA participation status was not independently confirmed this session. Separately and independently of Somali law, US citizens and Green Card holders with Somalia accounts remain obligated to file FinCEN Form 114 (FBAR) once aggregate foreign accounts exceed USD 10,000, and potentially Form 8938, regardless of Somalia's own domestic requirements. Note the ITA 2025 does provide a foreign tax credit mechanism (Article 9) for resident persons other than partnerships, for foreign income tax paid on assessable foreign income.
No comprehensive double tax agreement network was identified for Somalia, including after checking the Ministry of Finance Income Tax Manual directly, which does not reference any treaty network. Given the very recent (May 2025) overhaul of the domestic tax system under the ITA 2025, this is a genuinely evolving area of Somali tax policy rather than a settled zero - treat it as likely to develop further.