Senegal legal and accounting and tax considerations in 2023
Since 2003, Healy Consultants Group assists our Clients with timely annual legal, accounting and tax obligations in Senegal.
- Standard corporate tax in Senegal is 30% on both local and international income for all tax-resident companies;
- A minimum tax of 0.5% of the turnover from the preceding year applies for companies that do not derive a taxable profit within a fiscal year;
- Capital gains in Senegal is considered ordinary business income and is subject to the standard corporate income tax rate. The tax may be deferred in the event of a merger or acquisition of another corporate entity;
- Branches of foreign companies pay 30% corporate tax, plus 10% withholding tax on branch profits remitted abroad. Under certain circumstances, 18% VAT may be imposed on branch remittances;
- Capital duty is taxed at 1% of capital exceeding XOF100 million (approximately US$180,000), otherwise the duty is US$60;
- A 1% tax applies on a capital increase and a 1% tax applies for real estate contributions;
- Transfer tax is levied at i) 10% on real property ii) 1% on shares and shareholders’ current accounts and iii) 10% on goodwill.
Value Added Tax (VAT)
- All incorporated companies must register for VAT and file returns monthly before the 15th of the following month;
- VAT is levied on the provision of goods and services at a standard rate of 18%;
- Lower rates (special tax) of i) 17% for financial activities and ii) 10% for tourism activities, are applicable.
Withholding taxes & DTTs
- A standard 10% withholding tax is levied on dividends paid to both resident and non-resident entities;
- An 8% to 16% withholding tax is applicable on interests generated on bank deposits, bonds and other revenues, such as interest on loans;
- A 20% withholding tax is applicable on i) royalties and ii) technical services fee paid to foreign entities;
- All above withholding taxes can be reduced under a double tax treaty;
- Senegal has signed double tax treaties (DTTs) with Belgium, Canada, France, Italy, Morocco, Norway, Qatar and Tunisia;
- Senegal has also signed multilateral tax treaties with member states of the West African Economic and Monetary Union (UEMOA), which includes Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, and Togo.
Filing due dates
Taxes Filing Deadline
- VAT return
- Withholding tax on service providers
- Income tax on payroll
15th of the following month
Corporate Income Tax On or before 30 April
Consequences for late/non-filing of taxes
Directorate General of Taxes and Domains (GDID) is the Senegalese government body responsible for tax administration and can impose the below penalties for late filing or payment of taxes:
- penalty of XOF200,000 (approximately US$360) for late or non-submission of returns;
- A penalty of 50% of the full amount due, for late or non-payment of taxes due.
Tax credits and incentives
- Companies with Free Exporting Enterprise status, and who export more than 80% of their products, pay 15% corporate income tax.
- The Senegal Investment Code is applicable to investments in excess of US$180,000 (XOF100million) in manufacturing, industrial, processing, agriculture, tourism and complex trade.
- Companies qualifying under the Investment Code benefit from exemption from VAT payment for three years and customs duties;
Tax reporting, accounting and auditing considerations
- The tax year in Senegal is the calendar year. Annual tax returns must be filed by 30 April of the subsequent year.
- All companies incorporated in Senegal must register for taxation, obtain a tax number and file monthly and annual returns.
- On 1 August, 2020, the Senegalese government introduced an online tax filing system, streamlining the process.
- All reporting entities must prepare their annual financial statements in accordance with the Senegalese General Tax Code.
- Audited financial statements are not required unless a company exceeds either of the following thresholds: i) US$450,000 in revenue ii) US$225,000 in assets or iii) 50 employees.
- All companies, including dormant entities, must file monthly tax returns including i) VAT ii) withholding tax on services providers and iii) income tax on payroll.
- Net operating losses can be carried forward for up to three years. Losses may be carried forward indefinitely, but only if they result from depreciation of assets.
- Companies must pay corporate income tax in two instalments (by 15 February and 30 April), each instalment equivalent to a third of the previous year’s tax.
- No instalment is due for newly-incorporated companies for the first financial year. The new entity is required to pay the full corporate income tax before 15 June of the following fiscal year.
Healy Consultants Group fees for accounting and tax support
Senegal accounting and tax task US$ Senegal active company unaudited annual tax and accounting * 3,500 Senegal dormant company unaudited annual tax and accounting 1,500 Senegal active company audited annual tax and accounting * 6,950 Senegal annual personal tax return 2,500 GDID written confirmation of legal tax exemption 1,950 Average monthly bookkeeping services 860 Monthly VAT, WHT and Payroll reporting services (active entity) 1,500 Monthly VAT, WHT and Payroll reporting services (dormant entity) 650
Note: * For an active trading company, these accounting, audit and tax fees are an estimate of Healy Consultants Group fees to efficiently and effectively discharge your annual company accounting and tax obligations. Following receipt of a set of draft accounting numbers from your company, Healy Consultants Group will more accurately advise accounting and tax fees.
Monthly bookkeeping services
Healy Consultants Group’s monthly book keeping services fee of US$860 includes i) receiving in Dropbox monthly invoices from our Client ii) labelling monthly bank statement transactions iii) preparing and submitting monthly income and expenses statements and iv) monitoring monthly profit levels to minimise annual tax.
It is important our Clients are aware of their personal and corporate tax obligations in their country of residence and domicile, and that they fulfil those obligations annually. Let us know if you need Healy Consultants Group’s help to clarify your annual reporting obligations.