Equatorial Guinea Personal Income Tax Rates

Equatorial Guinea individual income tax rates are progressive to 35%.

Basis - Resident individuals are assessed on their worldwide income and nonresidents on transactions carried out in Equatorial Guinea, from the first day of work performed in country.

Residence - Any person operating in Equatorial Guinea and staying more than 3 months in 1 calendar year or 6 months in 2 years is considered resident. In the oil and gas sector, individuals operating in Equatorial Guinea and staying more than 3 months in 1 calendar year are considered resident.

Absences of less than 30 days are not taken into account in computing the period of residence.

Tax Filing status - The head of a family is subject to personal income tax both on his/her own income and on the income of his/her dependent children and spouse, subject to the individual's right to elect to be assessed separately. A married woman is assessed separately if she is separated from her husband or if her husband is not subject to tax in Equatorial Guinea.

Taxable income - Income from salaries, wages, pensions, annuities and per diems for attending meetings of boards of directors is taxable, excluding special allowances to cover expenses relating to the position to the extent the expenses are effectively used for their objective and not excessive. Benefits in kind and cash allowances are taxable at specific rates.

Capital gains - Capital gains include proceeds from the sale of stock and options, income from securities, bonds, loans, deposits or from the sale of real estate assets. Capital gains accruing to individuals as a result of company mergers are not subject to personal income tax if the new company has its registered office in Equatorial Guinea or another CEMAC state.

The standard tax rate on such income is the same as for the other categories. Capital gains are subject to the general tax rate, except for nonresidents who are subject to 25% withholding tax.

Tax Deductions and tax allowances - The extent to which a deduction from income will be allowed depends on the category of income. Allowable tax deductions include business expenses, contributions to pension funds (under specific conditions), interest on loans taken out to build or repair the taxpayer's first house in Equatorial Guinea, alimony and payments made to the welfare fund on behalf of domestic employees. For salaries, wages, pensions and annuities, allowable deductions for business expenses amount to 20% of income but cannot exceed XAF 1 million.

Tax Rates - Equatorial Guinea tax rates are progressive to 35%. Additionally, benefits in kind and cash allowances are taxable at the following rates on gross salary: housing - 15%; water, electricity, housekeeping and service or office car - 5%; food - 20% (again, imposed on gross salary with a maximum XAF 150,000).

Other taxes on individuals:

Capital duty - No

Stamp duty - Stamp duty is levied on the execution of various documents at rates ranging from 1% to 10%.

Capital acquisitions tax - See "Transfer tax" under "Corporate taxation".

Real property tax - See under "Corporate taxation".

Inheritance/estate tax - A tax on "mortis causa" applies for all kinds of hereditary successions (10%), donations (5%) and life insurance (10%).

Net wealth/net worth tax - No

Social security - Employees contribute monthly to the National Social Security Fund (INSESO) and the Work Protection Fund. Employee contributions are 0.5% of net salary to the Work Protection Fund and 4.5% of gross salary to INSESO.

Administration and compliance:

Tax year - Calendar year

Tax Filing and tax payment - Tax payments on income from salaries and wages are withheld by companies or other entities at source before the 15th of the month following payment.

Tax Penalties - The same penalties apply as for corporate income tax. Additionally, failing to withhold is subject to a 25% penalty and a failure/delay in paying personal income tax withheld is subject to a 25% + 10% interest per month penalty, capped at 100% of the total tax withheld.

Equatorial Guinea Corporate Income Tax Rates

Rate of corporate income tax in Equatorial Guinea is 35%.

Residence - A commercial entity operating in Equatorial Guinea for more than 3 months in 1 calendar year or for 6 months within a 2-year period is considered resident. In the oil and gas sector, companies operating in Equatorial Guinea for more than 3 months in 1 calendar year are considered resident.

Absences of less than 30 days are not taken into account when computing the period of residence.

Basis - Resident entities are assessed on their worldwide income. Nonresident entities are subject to a 10% withholding tax on gross income derived from sources in Equatorial Guinea.

Taxable income - Taxable income is a company's income, less allowable deductions and losses. Income of a capital nature is not included in taxable income.

Taxation of dividends - All dividends received by a resident company are subject to corporate income tax. However, a recipient company may offset any domestic tax withheld from dividends against its company tax liability. A participation exemption applies so that only 10% of net dividends received by a corporate shareholder is subject to tax provided such shareholder holds at least 25% of the shares in the payer and the shares remain registered in the name of the shareholder for at least 2 consecutive years.

Dividends received by foreign shareholders are subject to a 25% tax.

Capital gains - Capital gains are treated as ordinary business income and taxed at the standard corporate income tax rate. However, capital gains realised on the disposal of fixed assets in the course of trading are excluded from income for a 3-year period if the taxpayer reinvests the gain in new fixed assets for the business. Capital gains arising from a gratuitous allocation of shares, founders' shares or debentures on the merger of limited liability companies or limited partnerships with share capital are also excluded, provided the company resulting from the merger has its registered office in Equatorial Guinea. Net capital gains arising on the assignment, transfer or cessation of a company within 5 years following its creation or purchase will be assessed at only half their value. If such an event takes place more than 5 years after the company is formed or purchased, net capital gains will be assessed at 1/3 of their value.

Losses - Losses may be carried forward for up to 3 years (5 years for companies in the oil and gas industry) but may not be carried back. Losses of one entity may not be transferred to another entity in the case of a corporate reorganisation. After 3 consecutive years of losses, companies will be deregistered from the Tax Registry (except new companies).

Tax Rate - 35%
Surtax - No

Alternative minimum tax - The minimum company tax is 1% of the previous year's turnover. The Alternative minimum tax is payable when the operations of the company result in a taxable loss or when the minimum tax is more than 35% of the taxable profits.

Foreign tax credit - No
Participation exemption - A partial tax exemption on dividends applies to CEMAC groups. See also under "Taxation of dividends".
Holding company regime - No
Incentives - No

Withholding tax:

Dividends - Dividends paid to nonresident entities are subject to 25% withholding tax.

Interest - Interest paid to nonresident entities is subject to a 10% withholding tax on the gross amount.

Royalties - Royalties paid to nonresident entities are subject to a 10% withholding tax on the gross amount. See "Other", below, for oil and gas companies.

Branch remittance tax - No

Other taxes on corporations:

Capital duty - No

Payroll tax - There is no payroll tax. Salaries are only subject to the Work Protection fund and INSESO contribution (see under "Social security").

Real property tax - Rural property tax of XAF 100 is levied for each hectare or fraction thereof of the surface area of the property.

An urban property tax is imposed equal to 1% of 40% of the sum of the value of the land and the buildings constructed on it.

Social security - Employers contribute monthly to the National Social Security Fund (INSESO) and the Work Protection Fund. Employer contributions are 1% of the gross salary to the Work Protection Fund and 21.5% to INSESO.

Stamp duty - Stamp duty is payable on a variety of instruments and transactions such as the creation or increase of capital, stock transfers of unquoted companies, property transfers, etc.

Transfer tax - Rates are 3% for the transfer of goods and chattels for valuable consideration (between residents and nonresidents and between nonresidents); 5% on transfers of real estate for valuable consideration between residents and 25% between residents and nonresidents; and 5% on transfers for valuable consideration of goods and chattels and livestock, credits and rights not expressly specified.

Other - All payments made by companies in the oil and gas sector are subject to withholding tax at the following rates: 10% on EG gross income of nonresidents obtained from commercial or industrial activities or services (6.25% for EG residents); and 5% on mobilisation, demobilisation and transportation services in Equatorial Guinea. Other potential taxes include property taxes; the tax on vehicle and boat ownership and use; and the tax on the screening and distribution of image and audio recordings.

Anti-avoidance rules:

Transfer pricing - No
Thin capitalisation - No
Disclosure requirements - No

Controlled foreign companies - Controlled foreign company provisions apply where at least 35% of the share capital is held by
nationals.

Administration and compliance:

Tax year - Tax year in Equatorial Guinea is the calendar year. A company's financial year must correspond to the tax year. A tax return showing the company's results for the fiscal year must be filed by the following 30 April.

Consolidated returns - No

Tax Filing requirements - A minimum company tax equal to 1% of the previous year's turnover is payable annually before 31 March. The final instalment is paid on 30 April.

Tax Penalties - A fine of XAF 200,000 per month is payable for late filing, capped at 75% of the tax due. The penalty for understatement of tax liability ranges from 50% (when the amount is 10% higher than the taxpayer's profits) to 100% (bad faith). The authorities also may impose a "best judgement" assessment: from 50% to 100% (bad faith). A 50% penalty is imposed for failure to pay the minimum income.

Equatorial Guinea VAT (Value-added Tax) Rates

The standard VAT rate is 15% in Equatorial Guinea. A zero VAT rate applies to exports and similar transactions. Some products are subject to a reduced rate of 6%, others are exempt and others are assessed a special duty tax at a rate of 30%.

Registration - Resident VAT payers must be registered. Nonresident VAT payers must appoint a solvent resident representative to be jointly responsible for the payment of VAT and the discharge of other VAT obligations.

VAT Filing and payment - Registered VAT vendors are required to file monthly VAT returns within 15 days of the end of the month. The tax due must be paid within 15 days following the filing of the VAT return.