Cote d'Ivoire (Ivory Coast) Income Tax

Tax Rates - Non-commercial profits (fees) are generally subject to withholding tax at an effective rate of 7.5%. Withholding tax is applied to Ivory Coast-source investment income at the rates described under "Withholding tax". Additionally, 80% of employment income, including fringe benefits, is taxed at 1.5%. A national contribution is also charged at effective rates up to 8%. The general income tax is imposed at schedular rates ranging from 2% to 36%.

An individual in business may opt to be taxed at a flat rate of 25% and become exempt from the general income tax.

Basis - Habitual residents are taxable on worldwide income. Nonresidents are subject to tax only on Ivory Coast-source income.

Residence - Habitual residents are individuals with a permanent home available for their use in the Ivory Coast or who are employed by a resident corporation.

Tax Filing status - Spouses are generally taxed separately. Children are usually taxed with one of their parents but may be taxed separately if they have employment income.

Taxable income - Individuals are taxable on the same schedules of income as companies, and on employment income. All income is pooled and subject to a general income tax.

Capital gains - Capital gains from the disposal of assets are exempt from tax. Capital gains from the disposal of shares are taxable only where the individual had a longterm significant shareholding and was employed in the business.

Tax Deductions and allowances - Expenses deductible from general income include life assurance premiums (subject to certain limits and conditions), loan interest, subsistence allowances paid to dependent parents or a spouse and the general income tax itself.

Other taxes on individuals:

Capital duty - Capital contributions are subject to duty at 0.6% (0.2% on amounts over XOF 5 billion), or 6% where derived from the capitalisation of reserves.

Stamp duty - Stamp duty is generally charged at 1% on negotiable and nonnegotiable instruments; flat rate charges apply to various legal documents.

Real property tax - Property taxes are charged on the actual or potential rental income of landlords (11%) and their ownership interests (4%).

Capital acquisitions tax - No
Inheritance/estate tax - No
Net wealth/net worth tax - No

Social security - Social security contributions payable by the employees are withheld by the employer at a rate of 3.2% of gross salary. A national tax for reconstruction is also withheld (1%-2.5% on a progressive scale).

Tax year - Calendar year

Filing and payment - Personal income tax returns are due by 30 April. An individual receiving employment income from only one employer is not required to file a tax return, unless eligible for a refund. Payments of tax relating to a business are due as described for companies, above. Tax is normally withheld at source for other sources of income.

Penalties - Tax penalties are charged at varying rates for late tax returns, failure to pay tax due and for errors and mistakes.

Cote d'Ivoire (Ivory Coast) Corporate Tax Rates

The standard rate of company tax (Tax benefits industrial and commercial - BIC) in Cote d'Ivoire is 25%. For a company that performs sales less than 1 million CFA francs, the corporate tax rate is 20%.

The tax rate for foreign companies is 20% (adopted at the source).

Residence - An entity incorporated in the Ivory Coast is resident for tax purposes.

Basis - A resident corporation is subject to tax on income from movable capital on a worldwide basis. Other types of taxable income are taxed at source.

Taxable income - Income is taxed under separate schedules for industrial and commercial profits, non-commercial profits and income from movable capital, land and agriculture. A non-commercial schedule is mainly used for professional income, royalties and know-how and for nonresident corporations. Business costs and expenses are deductible if they are strictly related to the business. Management fees, royalties and similar payments are deductible if they are reasonable and in total do not exceed 5% of turnover or 20% of general expenses.

Taxation of dividends - Dividends received are subject to the 25% corporate income tax rate, but only on 50% of the total amount received if tax has been previously withheld on the dividends. However, subject to certain conditions, dividends received by a parent company are taxed at a rate of 5%.

Capital gains - Capital gains arising from the disposal of fixed assets and shares are normally included in taxable income. Rollover relief for gains is granted where the taxpayer invests a sum equal to the amount of the gain in the acquisition of a similar asset within 3 years of the sale. For shares, the relief applies only to significant long-term holdings.

Subject to certain conditions, capital gains arising from a merger or partial business transfer are exempt.

Losses - Losses generally may be carried forward 5 years; losses may be carried forward indefinitely to the extent they arise from capital allowances. The carryback of losses is not permitted.

Tax Rate - The corporate tax rate is 25%.

Taxpayers also must pay a minimum tax of 0.5% (reduced for financial institutions, insurance and petroleum companies) of the previous year's turnover. The minimum tax must fall between XOF 2 million and XOF 15 million.

Surtax - No
Alternative minimum tax - No
Foreign tax credit - No, unless a tax treaty provides otherwise.
Participation exemption - No

Holding company regime - Subject to certain conditions, dividends received by a parent company are taxed at a rate of 5% and reduced rates apply to capital gains derived from the disposal of shares and for withholding tax on interest.

Incentives - Plant, machinery and equipment that are used exclusively in manufacturing, agriculture, transportation or storage and that have an expected life of more than 5 years may be granted capital allowances at up to twice the normal rates. Enterprises investing at least XOF 10 million may apply for a reduction in the tax on industrial and commercial profits. Other incentives include a 5 to 8-year exemption from the tax on industrial or commercial profits, business licence duty, property tax and import tax, depending on the location of the investment.

Special tax incentives may be granted to enterprises involved in mining (a 5-year tax exemption) petroleum and certain construction activities.

Withholding tax:

Dividends - Dividends paid to residents and nonresidents are taxed at a rate of 10% for distributions paid by listed companies and 18% on distributions that are exempt from the tax on industrial and commercial profits; otherwise, the rate is 12%.

Interest - Interest paid to residents and nonresidents is 25% on bearer bonds, 6% on long-term government bonds and 15% on other bonds. The rate applicable to other interest and similar payments is normally 18%.

Royalties - Royalties paid to residents and nonresidents are subject to a 20% withholding tax based on a 25% tax on 80% of the gross income.

Branch remittance tax - A branch of a foreign company is subject to a remittance tax regardless of actual amounts transferred. Fifty percent of the branch's profits are treated as though they had been remitted as a dividend (subject to a 6% rate).

Other taxes on corporations:

Capital duty - Capital contributions are subject to duty at 0.6% (0.2% on amounts over XOF 5 billion), or 6% where derived from the capitalisation of reserves.

Payroll tax - Employers must pay 12% of expatriate staff gross payroll and 2.8% of local staff payroll.

Real property tax - Property taxes are charged on the actual or potential rental income of landlords (11%) and their ownership interests (4%). Property owned and used by the same legal entity pay an ownership charge based on 15% of the market rental value. The charge is reduced for unoccupied or undeveloped property.

Social security - Employers are required to make social security contributions based on an employee's gross wages (pension benefits (4.8%)); family allowance (5.75%); and work injuries (2%-5%).

Stamp duty - Stamp duty is generally charged at 1% on negotiable and nonnegotiable instruments; flat rate charges apply to various legal documents.

Transfer tax - No stamp duty is charged on the transfer of shares. A transfer tax of 10% is applicable to real property (7.5% if the transferee is a taxable person). Business transfers are also charged at 10%. Registration fees may apply.

Other - A company or individual carrying on a trade in the Ivory Coast also must pay a business licence duty, subject to certain exemptions. The duty is based on 0.5%-0.7% of turnover, plus 16%-18.5% of the rental value of the professional premises, depending on the location. Insurance premiums are subject to a levy at rates from 0.1% (export credit) to 25% (fire).

Anti-avoidance rules:

Transfer pricing - Profit transfers included in payments between resident corporations and nonresident affiliates may be adjusted so that arm's length conditions apply for tax purposes.
Thin capitalisation - Interest expense may be disallowed where it arises on shareholder loans in excess of fixed capital.
Controlled foreign companies - No
Disclosure requirements - No

Administration and compliance:

Tax year - Calendar year

Consolidated tax returns - Consolidated returns are not permitted; each company must file a separate tax return.

Tax Filing requirements - The tax return is due by 30 April, together with the balance of tax. The tax is payable in advance in equal instalments on 20 April, 20 June and 20 September, based on the prior year's tax liability.

Penalties - Penalties are charged at varying rates for late tax returns, failure to pay tax due and for errors and mistakes.

Rulings - A taxpayer may seek clarification from the tax authorities on the interpretation of provisions in the tax legislation.

Cote d'Ivoire (Ivory Coast) Value Added Tax

The standard rate of Value Added Tax (Taxe sur la Valeur Ajoutée) in Cote d'Ivoire is 18%. The reduced tax rate is 11% for certain operations.

Those goods and services are exempt from Value Added Tax in Cote d'Ivoire: Water and electricity, food base, medical and pharmaceutical, banking services and insurance, a few international trade, fertilizers, pesticides, operations and the feedingstuffs and animal of domestic goods.

Taxable transactions - VAT is chargeable on production activities, the distribution of goods and the rendering of services in the Ivory Coast. VAT is applied to imported goods and services.

VAT Rates - The standard rate is 18% and 10% for fees and commissions charged by financial institutions (interest is exempt).

VAT Registration - Taxpayers must register with the local tax authorities.

Filing and payment - Monthly returns and payment, if any, are due by the 15th of the following month.