On 19 October 2021, the Ministry of Finance, issued Interpretive Circular no. 54 (“Circular”), which concern of imposition of 10% additional tax for employees with income other than employment income.

The circular reference to the provisions of article 26 of the Assessment and Collection of Taxes Law and article 24 of the Assessment and Collection of Taxes Law which provides:

There are cases of employees that they have other income (e.g, rental income) then their employment salary and declare other income to their employer through Form TD59. Employer calculates it with the salary and withholds the total amount of tax and not only that which corresponds to the salary that concerns. Therefore, in such a case, there may be no tax payable or the amount of tax withheld is proportional to income that is at least 75% of the taxable amount. When the individual did not declare the estimation of his chargeable income and did not pay any temporary tax, as provided by the provisions of the Assessment and Collection of Taxes Law then a 10% additional tax has been imposed.

Accordingly, when the tax amount corresponding to that other income exceeds 75% of the tax attributable to that item and is paid by the employer in the form of withholding tax on income, then an additional tax of 10% is not imposed.

In cases where the taxpayer has paid, through deduction, the tax that concerns at least 75% of the total income, then: