Togo legal and accounting and tax considerations in 2023
Corporate income tax regime
- From 1 January 2019 the Government of Togo reduced standard corporate income tax from 28% to 27% for all Togo tax-resident companies;
- In addition to 27% corporate income tax, branches of foreign companies are also subject to 13% withholding tax on overseas remittances of branch profits;
- Value Added Tax (VAT) is levied at 18%. Companies engaged in services such as financial, insurance, medical, and transport services are VAT-exempt;
- Capital gains received from the sale of bonds or shares in tax-resident companies is subject to 3% to 5% withholding tax respectively.
Withholding and other corporate taxes
- A 13% withholding tax is applicable on dividends paid to resident and non-resident companies. Listed companies within WAEMU are subject to 7% withholding tax;
- Interests paid to resident and non-resident entities is subject to 6% withholding tax if paid to companies, and 13% if paid to individuals;
- Withholding tax is applicable on royalties at i) 5% if paid to a resident company with a tax number ii) 10% if paid to a resident company without a tax number and iii) 20% if paid to a non-resident entity;
- Employers in Togo must withhold 15% of their employees’ gross salary and pay as social security contribution to the National Social Security Fund (CNSS);
- Other applicable taxes in Togo include i) 3% payroll tax on gross salaries ii) 15% property tax on the rental value of real property and iii) 5% tax on transfer of immovable property.
Compliance and other tax considerations
- All registered entities must register for tax with the Togolese Tax Authority and file annual returns by 31 March following the end of the fiscal year;
- Togo has, to date, signed only two double tax treaties, with France and Tunisia;
- Healy Consultants Group will assist our Client with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts, budgets and performing sensitivity analysis.