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Institute of Certified Public Accountants of Somaliland
Professional Orientation Guide
Corporate & Business Law · Taxation
CPA Somaliland Membership Orientation · Section 13

Quick Reference - Tax Rates & Key Dates

13. QUICK REFERENCE - TAX RATES & KEY DATES

Domestic Tax Rate Summary

Tax Base Tax % Admin % Stamp % Effective %
Payroll (PAYE) Gross employment income 5% - 1% 6%
Rental Income (Individual) Gross rental income 10% 2% 2.5% of (tax+admin) ~12.3%
Business Income Chargeable income 10% 2% 2.5% of (tax+admin) ~12.3%
GST Taxable consideration 5% - - 5%
Withholding (non-resident) Gross international payment 10% 2% 2.5% ~12.3%
Excise (tobacco) Value of tobacco products 50% - - 50%

Key Filing Dates Summary

Tax / Obligation Due Date
Business Income Tax return (Dec year-end) 30 April
Individual Rental Income Tax 30 April
Payroll Tax (PAYE) - monthly remittance 15th of following month
GST return and payment 21st of following month
Provisional Tax - Corporate (instalment 1) 30 June
Provisional Tax - Corporate (instalment 2) 31 December
Provisional Tax - Individual (quarterly) 31 Mar / 30 Jun / 30 Sep / 31 Dec
Objection to assessment Within 30 days of notice
Penalty interest on overdue tax 2% per month from due date
Record retention minimum period 5 years from end of year of income

Capital Allowance - Initial & Annual Rate Summary

Category Initial Allowance Annual Rate & Method
Eligible plant & machinery - Hargeisa 50% of cost (yr 1 only) Reducing balance on remaining WDV
Eligible plant & machinery - Outside Hargeisa 75% of cost (yr 1 only) Reducing balance on remaining WDV
Computers & data handling (Class 1) 50%/75% if eligible 40% reducing balance
Vehicles, construction (Class 2) None (transport vehicles excluded) 35% reducing balance
Buses ≥30 seats; heavy goods; farm/mining plant (Class 3) 50%/75% if eligible plant 30% reducing balance
Office furniture; aircraft; vessels; other (Class 4) 50%/75% if eligible 20% reducing balance
Industrial Buildings - Annual N/A 5% straight-line
Industrial Buildings - Initial 20% of qualifying cost Applied in year building first in use
Small equipment (< $5,000) 100% immediate deduction No capital allowance applies
REMINDER Transport vehicles (goods vehicles, buses, passenger cars) DO NOT qualify for the initial allowance - only for annual allowances.
ICPAS Professional Orientation Guide · For IFAC Qualified Accountants Applying for Direct Admission to CPA Somaliland Membership · 2026 Edition
Professional Ethics

Ethical Theories

Before studying the fundamental principles of professional ethics, it is useful to understand the main ways people think about right and wrong. Ethical theories help professional accountants analyse difficult situations and explain the reasoning behind ethical decisions.

Why study ethical theories?

Professional accountants often face situations where the correct action is not immediately obvious. A decision may affect the employer, clients, employees, investors, creditors, regulators, and the wider public. Ethical theories provide different ways of thinking about such decisions.

In this section, we introduce three common ethical perspectives: utilitarianism, deontology, and ethical relativism. These theories are not a replacement for the IFAC/IESBA Code of Ethics, but they help learners understand the reasoning behind professional ethical judgement.

In professional accounting, ethical judgement should always be guided by recognised professional standards. Cultural practice, personal interest, or short-term benefit should not be used to justify misleading reporting, fraud, bribery, or breach of trust.

Three ethical theories

Consequences

Utilitarianism

Utilitarianism focuses on the consequences of an action. It suggests that the morally right action is the one that produces the greatest overall benefit or well-being for the greatest number of people.

Duty

Deontology

Deontology focuses on duty, rules, and moral obligations. It suggests that some actions are right or wrong in themselves, regardless of the consequences. For example, telling the truth is a duty even when lying may appear useful.

Context

Ethical Relativism

Ethical relativism suggests that ideas of right and wrong may vary between cultures, societies, or individuals. It reminds us that ethical views can differ, but it can also create risk if used to excuse improper conduct.

Comparison of ethical theories

Ethical theory Main question Strength Risk or limitation
Utilitarianism Which action produces the greatest overall benefit? Encourages accountants to consider the wider impact of decisions on stakeholders and the public interest. It may be misused to justify unethical conduct if someone argues that a bad action is acceptable because it produces a good result.
Deontology What is my duty, regardless of the outcome? Supports honesty, compliance with professional standards, and refusal to engage in fraud or misleading reporting. It may be difficult to apply when duties conflict, for example confidentiality versus public interest reporting.
Ethical Relativism How do culture, context, or local practice influence views of right and wrong? Helps accountants understand that ethical issues may be viewed differently in different environments. It can be dangerous if used to excuse bribery, fraud, weak governance, or non-compliance with professional standards.

Examples in accounting practice

Utilitarianism example: An accountant discovers financial irregularities that, if reported, may lead to job losses. A utilitarian approach considers the consequences for all stakeholders. Although reporting may have short-term negative effects, maintaining financial integrity, transparency, and public trust may produce greater long-term benefit.
Deontology example: A client asks an accountant to manipulate financial statements to secure a bank loan. A deontological approach focuses on professional duty. The accountant should refuse because falsifying financial statements is wrong, even if the client benefits in the short term.
Ethical relativism example: In some environments, offering gifts, facilitation payments, or informal commissions may be treated as normal business practice. However, professional accountants should not accept local practice as a justification for bribery, false reporting, or misuse of funds. Professional standards must guide conduct.

How these theories help professional accountants

Ethical theories help accountants ask better questions before making professional decisions. They encourage accountants to look beyond personal convenience, pressure from management, or short-term organisational benefit.

  • Utilitarianism reminds accountants to consider the wider consequences of their decisions.
  • Deontology reminds accountants that some professional duties must not be compromised.
  • Ethical relativism reminds accountants to understand context, while still respecting professional standards.
Key message: Ethical theories support professional judgement, but they do not replace the fundamental principles of the IFAC/IESBA Code. The next unit explains those principles in detail.

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