Accounting and tax
Corporate income tax regime
- Standard corporate tax in Senegal is 30% on both local and international income for all tax-resident companies in Senegal;
- Companies with Free Exporting Enterprise status, and who export more than 80% of their products, pay 15% corporate income tax. 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 tax rate. The tax may be deferred in the event of a merger or acquisition of another corporate entity;
- Value Added Tax (VAT) on the provision of goods and services is 18%. Lower rates of i) 17% for financial activities and ii) 10% for tourism activities, are applicable;
- 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.
Withholding tax and DTTs
- A standard 10% withholding tax is levied on dividends paid to both resident and non-resident entities, unless reduced under a double tax treaty;
- Withholding tax is applicable at 8% to 16% on interests generated on bank deposits, bonds and other revenues, such as interest on loans;
- 20% withholding tax is applicable on i) royalties paid to foreign entities and ii) technical services fees, unless rates are reduced under a tax treaty;
- Employers must submit i) 3% payroll tax on taxable gross salary ii) social security tax at 1% to 7% depending on the line of business, and iii) 8% for national retirement fund contributions;
- Senegal has 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;
- Senegal has also signed double tax treaties (DTTs) with other nations including Belgium, Canada, France, Italy, Mauritius, Morocco, Norway, Qatar and Tunisia.
Compliance and other tax considerations
- The tax year in Senegal is the calendar year. Annual tax returns must be filed by 30th April of the subsequent year;
- VAT, payroll taxes and withholding tax returns must be submitted monthly by the 15th of the following month;
- 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;
- Capital duty is taxed at 1% of capital exceeding XOF100 million (approximately US$170,000), 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;
- Exchange-control regulations exist in Senegal for financial remittances outside the Economic Community of West African States (ECOWAS);
- Healy Consultants Group’s Compliance Department will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records and iv) preparing forecasts, budget and sensitivity analysis;
- 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’ help to clarify your annual reporting obligations.