Capital Gains Taxation in Comoros
Definition of Capital Gains
In Comoros, capital gains are defined as profits or gains derived from the disposal of capital assets. Capital assets include:
- Real estate properties
- Stocks and shares
- Bonds and other securities
- Business assets
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains in Comoros are taxed at a flat rate of 15%. However, certain capital gains may be exempt from taxation, such as gains derived from the sale of a principal residence or gains realized by non-residents on the disposal of assets located outside of Comoros.
Legal Framework
The taxation of capital gains in Comoros is governed by the following laws:
- Tax Code of the Union of the Comoros (Article 10)
- Decree No. 08-043/PR of 2008 (Article 10)
These laws outline the definition of capital gains, the methodology for calculating taxable capital gains, and the applicable tax rates.
Policy Objectives
The capital gains tax system in Comoros aims to:
- Generate revenue for the government
- Encourage investment and economic growth
- Ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals
Conclusion
The capital gains tax system in Comoros is relatively straightforward, with a flat tax rate of 15% applied to most capital gains. However, certain exemptions and deductions may apply, and it is important to consult with a tax professional to ensure that you are meeting your tax obligations.
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