Africa Tax In Brief

Author:Ms Celia Becker

BENIN: Public procurement holders to benefit from a tax regime derogating from indirect taxation

The 2017 budget law introduced a derogatory tax regime from which certain public procurement holders may benefit by the Benin tax authorities, assuming indirect taxation. This includes customs duties, internal taxes on turnover (mainly value-added tax ("VAT")) on prices and values of goods and supplies acquired or incorporated into the realisation of the contract. The effective date of the relevant measures have not yet been announced.

CAMEROON: New rates of special tax on income received by non-resident companies

Law No. 2016/018 of 14 December 2016 on the Finance Act of the Republic of Cameroon for financial year 2017 introduced the following new rates of special tax on income by public partnership contractors or service providers that are not resident in Cameroon:

a reduced rate of 5% on remuneration paid in the context of public contracts whose contractors are not resident in Cameroon; and a 10% average rate on the remuneration of punctual provisions paid to companies that are not resident in Cameroon. The general rate of 15% continues to apply to all other remuneration for services and royalties paid to non-residents, subject to the provisions of relevant double tax agreements.

CENTRAL AFRICAN REPUBLIC: Tax ruling procedure introduced

Law 16-007 of 31 December 2016, which adopted the Budget for 2017, introduced the possibility for taxpayers to apply for tax rulings from the tax authority prior to the conclusion of any contract, legal act or project.

Taxpayers requesting such rulings must provide all information necessary to determine the scope of the transaction in question. The position taken by the tax authorities constitutes a guarantee for the taxpayer against any change in subsequent interpretation.

GABON: Implementation of country-by-country report and transfer pricing regulations

Law No. 026/2016 of 6 January 2017 introduced an obligation to file a country-by-country report ("CbC report") and provided further details regarding the transfer pricing documentary obligation.

Parent or ultimate parent companies are required to file a CbC report within 12 months after the end of the fiscal year if the consolidated annual turnover excluding tax is at least FCFA491 967 750 000 for fiscal years beginning on or after 1 January 2017.

Failure to comply with this obligation will lead to a penalty equal to 0.5% of consolidated turnover excluding taxes, capped at FCFA100-million per fiscal year.

Article P-831 of the General Tax Code provides for an annual obligation for Gabonese companies that have commercial relations with associated foreign companies to transmit transfer pricing documentation in the modified format introduced by Finance law, 2017. The documentation must include a main and local file in French which must include:

an analysis of the functions performed; the assets used and the risks assumed; and an explanation concerning the selection and application of the method(s) used. Failure to comply with the transfer pricing documentary requirement exposes the company to a penalty equal to 5% of the company's total intercompany trading volume, with a minimum of FCFA65-million per fiscal year.

With effect from 1 January 2017, companies with a turnover of at least FCFA1.5-billion must report their results electronically.

GHANA: Revenue Administration Act 2016 entered into effect

The Revenue Administration Act, 2016 (Act 915) ("RAA"), which had been assented to by the President and gazetted on 10 August 2016, entered into effect on 1 January 2017, repealing the Petroleum Income Tax Act, 1989 (PNDCL 188) and the Taxpayer Identification Numbering System Act, 2002 (Act 632). The RAA provides for the administration and collection of revenue by the Ghana Revenue Authority.

GHANA: Tax Amendment Acts gazetted

The following four tax amendment Acts were assented to by the President and published in the government gazette on 15 March 2017:

Income Tax Amendment Act, 2017\Special Petroleum Tax (Amendment) Act 2017; Special Import Levy (Amendment) Act 2017; and Customs and Excise (Petroleum Taxes and Petroleum Related Levies) (Repeal) Act 2017. GHANA: VAT flat rate scheme introduced

On 24 April 2017, the Ghana Revenue Authority ("GRA") issued a public notice announcing the enactment of the Value-Added Tax (Amendment) Act, 2017, which provides for the introduction of the VAT flat rate scheme with respect to VAT and the National Health Insurance Levy ("NHIL") with effect from 7 April 2017 (the date of gazette notification) as follows:

the standard tax rate 17.5% (comprising VAT at 15% and NHIL at 2.5%), has been reduced to a flat rate of 3% with respect to retailers and wholesalers of goods, whereas the standard rate remains applicable to imports; a taxable person accounting for the value of taxable supplies under the VAT flat rate scheme is not eligible for an input tax deduction; the supply of domestic air transport, immovable property, including land to be used for, or intended to be used for, a dwelling, financial services and crude oil and residual fuel oil are exempt from VAT/NHIL: GHANA: Various practice notes now available

The following practice notes, issued by the GRA on 6 October 2016, recently become available:

Taxation of employment income (Practice Note No. DT/2016/011)

The practice note provides the following guidance on the taxation of gains and profits from employment:

gifts (eg tips, awards, appreciation, end of service benefit, ex-gratia payments etc) received in respect of an employment are taxable as part of employment income; reimbursement of the cost of passage incurred in respect of the family members of an employee are...

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