Ivory Coast Fiscal Guide 2019

March 2020 KPMG.com Country Highlights

Name : Côte d’Ivoire Area : 322 462 km Area code : + 225 : UTC Population : 25,82 million (2019) Political capital : Economic capital : Neighbouring countries : , , , , Currency : XOF : French

Official holidays (14) — New year’s Day –January 1st — Easter Monday – (variable) — Labour day – May 1st — Ascencion – (Variable) — Whit Monday – (variable) — Independence day – August 7th — Assumption – August 15th — All Saints’ Day – November 1st — National Peace Day – November 15th — Christmas Day – December 25th — LaïlatoulKadr – Day after the Night of Destiny — Aïd el Fitr – End of — Tabaski – Feast of sacrifice — Maouloud – Birth of the Prophet

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Corporate Income Tax (CIT) The income tax in , which is imposed under the General Tax Code (GTC) and applies to both resident and non-resident companies, is divided into a series of scheduler taxes, with each particular category of income (or schedule) being computed and taxed according to different rules. The main categories comprise industrial and commercial profits, non-commercial profits, wages and salaries, income from transferable securities (i.e. dividends, interest), income from land and agricultural income. The regular corporate income tax rate is 25%. The minimum tax is 0.5% of turnover. For oil-producing, electricity and water-producing companies, the rate is reduced to 0.1%. The rate is reduced to 0.15% for banks and financial companies and for insurance companies. The minimum tax may not be less than XOF3 million or more than XOF35 million. New corporations are exempt from the minimum tax for their first fiscal year.

Rates : Resident companies Corporation Tax

- Resident 25%

- Resident telecommunication company 30%

Non-commercial income 25%

Capital gains Part of business income

Dividends 2%,10%,15%

Interest Between 1% and 18%

Royalties 20%

Management fees 20%

Withholding tax (local transactions) 5% & 7,5%

Tax on salaries for local employees 2,8%

Tax on salaries for expatriate employees 12%

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Rates (cont.)

Resident individuals

Progressive: Personal Income tax between 9.5% and 37.5%. 20% for business income

Non-commercial income 25%

Capital gains Part of personal income

Dividends 2%,10%,15%

Dividends 2%,10%,15%

Interest 1%,5%,10%,13,5%,16,5%, 18%

Employment income 1.5%

National contribution Between 1,5% and 10%

Non residents

Income tax (individuals) 25%

Corporation tax (companies) 25%, 30%

Capital gains (individuals and companies) Part of personal/business income

Dividends 15%*

Interest 18%*

Non-commercial income 20%

Management or consultancy fees 20%*

Leasing equipment from non-residents 20%*

*Final tax withheld at source (rate may vary based on the tax treaty)

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Transfer pricing and thin capitalization rules In the framework of the fight against fraud and international tax evasion launched by the OECD since 2013, the 2017 financial law, has provided for a reinforcement of its rules on international intragroup transactions. As such, the Tax Authorities requires Ivorian companies belonging to multinational groups or companies that have control of companies located outside Côte d'Ivoire to include in their financial statements documentation on intragroup transactions. There is no specific thin capitalization rule. However, interest paid by a company to its shareholders is deductible only when the following conditions are met : — the loan is to be reimbursed within 5 years; — the company is not under a liquidation procedure during the same period; — the interest rate does not exceed the Central Bank interest rate by more than 2 percentage points; — the sums made available to the company must not exceed the amount of the share capital; — the amount of interest must not exceed 30% of the company's income; — company's share capital must have been fully paid up.

Other taxes

Any company, whether domestic or foreign, which carries on a trade, business or profession not included in the list of exemptions Business license duty set out in the GTC is liable to business license duty on each of its premises. Reduced rates are provided in specific cases. Real estate tax on developed properties Tax levied on rental value of various types of properties. and on undeveloped properties Rate is 15%.

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Type of Canad WAEMU UK Germany Portu Norway income a * gal

Dividends 15% 15% 15% 15% 15% 15% 15% 10% 10% 10% 15% 10%

Interest 15% 15% 15% 15% 15% 16% 15% 10% 10% 10% 16% 15%

Royalties 10% 10% 10% 10% 10% 10% 10% 10% 5% 10% 10% 15%

*WAEMU: West African Economic and Monetary Union (, Burkina Faso, Guinea-, Mali, , , ) *There is a bilateral tax treaty between and Ivory Coast which is not in force yet.

Transaction taxes Value added tax (VAT) is levied on transactions carried out in Ivory Coast by individuals or companies who, either regularly or occasionally, purchase goods for resale or render services, other than as employees or farming workers. VAT is levied only in respect of business activities that are carried on Ivory Coast . — Standard rate :18%. — Reduced rates at 9%: milk, products or wheat pasta. — Zero Rate: 0% for exportation sales. — Certain specified supplies are exempt from tax.

Customs duty As a member state of the West African Economic and Monetary Union (WAEMU), Ivory Coast applies the customs rates specified in the community regulations. New rates came in force in 2015 related to the ECOWAS Common External Tariff (TEC). Customs duties are levied on the customs value of imported goods at rates of 0%, 5%, 10%, 20% and 35%, depending on their classification and category 0 to 5.

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Stamp and transfer duty Stamp duties are levied on documents drawn up in Ivory Coast and on those drawn up abroad where they might be produced as evidence in legal proceedings in Ivory Coast. Fixed fees apply for paper documents and a percentage rate for negotiable and non-negotiable instruments. Transfer duty applies to the sale of immovable property located in Ivory Coast at a rate of 6% of the price indicated in the transfer deed. The transfer of shares and other securities is exempt from registration fees if certain conditions are met, in particular if the transfer is executed in the form of a deed.

Accounting rules From an accounting perspective, like other OHADA member countries, Ivory Coast has adopted, the OHADA accounting system (SYSCOA) provided for by the OHADA Uniform Act Relating to Accounting. Under this Act, companies operating in Ivory Coast are required to keep their local accounts and prepare their domestic corporate income tax returns according to the OHADA Generally Admitted Accounting Principles (GAAP). The revised SYSCOHADA was put in place in 2017 to include IFRS rules and the revised system is applicable since January 1st, 2018.

Investment information Ivory Coast is a country with strong growth with a real GDP of about 9% pursuant to preface of the National Development Plan (2016 - 2020) Ivory Coast has an agricultural-based economy, with roughly two-thirds of the population dependent on this sector for employment. The country is the 's top cocoa producer and is also 's leading grower of natural rubber. In addition to agriculture, the Ivory Coast government is planning significant expansion in the energy and mining sectors. The National Development Plan (2016-2020) aims to achieve emergence by 2020.

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Investment incentives The 2018 new Investment Code grants investment incentives for companies, domestic or foreign, resident or non-resident, in respect of their business activities carried on in the Ivory Coast. The new investment code now classifies eligible activities into two categories: Category 1: agriculture, agro-industry, hotels, health, and higher education; Category 2: all other sectors and grants exemptions from 5 to 15 years depending on the place of the investment. (Zone A; B and C) The following sectors are excluded from the benefit of this code : — trade sector; — banking and financial sector; — real estate sector; — tobacco processing sector; — liberal profession. The exemptions are granted by Zone : – Zone A Abidjan district: 5 years reduced rate of 50%. – Zone B Agglomeration with a population of 60,000 or more inhabitants: 10 years. Total exemption over the first 5 years and 50% over the last 5 years. – Zone C Agglomeration with a population of less than 60,000 inhabitants: 15 years. Total exemption over the first 10 years and 75% over the last years. The new Code provides exemption on corporate income, business license duty, VAT and reduction on customs duty for investments realized under category 1. Exemptions granted for category 1 are related to the following taxes : — Corporate income tax; — Business license duty and trading license duty; — Real estate tax; — Registration duty on increase of capital.

Theses exemptions are granted at the rate of 50% for zone A and B, and of 60% for zone C. For category 2, the benefits are granted in the form of a tax credit without time limit. Certain tax incentives are available to investments that must amount to at least XOF 500 million. As part of the improvement of the business environment, the State of Cote d'Ivoire has instituted a unique identification number.

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Oil & Gas / Mining Tax incentives are granted under the Petroleum Code and the Mining Code for enterprises involved in mining and petroleum activities. These Codes provide exemption from VAT and additional taxes on imports and purchases to companies involved in exploration or production of oil, gas or minerals through the means of an agreement with the Government. This exemption from VAT is extend to subcontractors of companies holding a service contract classified as mining or oil & gas.

Housing sector Finance Law 2004 introduced a special regime for companies approved as major investors in the construction sector. The benefits under this regime are granted to enable the production of inputs necessary for the construction of housing units or industrial facilities. Several exemptions are granted such as corporate income tax, business license duty, VAT, etc. Currency Exchange controls and rates The XOF is linked to the (€) at a current fixed exchange rate of 1€ / 655.957 FCFA. Transfers within the CFA zone are not restricted. Dividends out of revenue and capital on disinvestment maybe remitted. Communauté Financière Africaine (XOF) is currently used in 8 West African States (CFA) listed besides: — Benin, — Burkina Faso, — Cote d’Ivoire, — Guinea Bissau, — Niger, — Senegal, — Mali, — Togo.

Residence and work permit A visa is required to work in Côte d’Ivoire and is valid for a maximum of three months. An extension is required to stay longer. Beyond three months any non-ECOWAS national living regularly in Côte d'Ivoire for more than three months from the date of entry into Côte d'Ivoire must hold a biometric resident card. The cost of issuing the residency card is between XOF 35,000 and XOF 300,000. To get a visa, a company letter (stating a specific mission), and a confirmation of itinerary from a travel agent, must be provided. For expatriates, a local employment contract is also required.

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Residence and work permit (cont.) The amount of the costs for the employment contract visa fees is determined taking into account the nationality and duration of the applicant's employment contract into the country. For fixed-term contracts : — Non-African: one (1) month's salary per worker (basic salary + extra salary); — African: half (½) of the salary per worker concerned (basic salary + extra salary). For permanent employment contracts: — Non-African: one (1) month and a half of salary per worker concerned (basic salary + extra salary); — African: Three-quarters (¾) of the salary, per worker concerned (basic salary + extra salary). According to article 1 of the Order n°6421 of June 15th 2004 amending Order n° 1437 of February 19th 2004 on the regulation of the recruitment and visa fees of non-national staff employment contracts natives from an ECOWAS member state do not need a visa to work in the country. Pursuant to article 5 of the social security code, it is mandatory for all employers to be registered with the national social security fund (CNPS). In accordance with article 21 of the Social Security Code, the employer must register his employees with the National Social Security Fund (CNPS) and pay a monthly social contribution for them. This contribution must be paid within 15 days following the previous month and the employer is required to pay penalties determined by the CNPS, when contributions are not paid on time. In accordance with article 26 of the Social Security Code, the employer must submit an annual individual wage declaration each year called DISA. Since March 24th 2014, Côte d'Ivoire has adopted through Act 2014-131 a compulsory national social protection system against disease risk by establishing a universal health coverage (CMU). Access to universal coverage is open to all populations living in Côte d'Ivoire.

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Jean-Luc Ruelle Laetitia Monnet Regional Senior Partner Manager T: + 225 20 22 57 53 T: + 225 20 22 57 53 E: [email protected] E: [email protected]

Stéphanie Ouaffo Manager T: + 225 20 22 57 53 E: [email protected]

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