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Africa Worldwide Tax Summaries Corporate Taxes 2017/18 www.pwc.com/taxsummaries Worldwide Tax Summaries Corporate Taxes 2017/18 Quick access to information about corporate tax systems in 157 countries worldwide. Africa Worldwide Tax Summaries Corporate Taxes 2017/18 All information in this book, unless otherwise stated, is up to date as of 1 June 2017. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. © 2017 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. Foreword Welcome to the 2017/18 edition of Worldwide Tax Summaries – Corporate Taxes, one of the most comprehensive tax guides available. This year’s edition provides detailed information on corporate tax rates and rules in 157 countries worldwide. As governments across the globe are Some of the enhanced features available looking for greater transparency and online include Quick Charts to compare with the increase of cross-border rates across jurisdictions. You may also activities, tax professionals often need access WWTS content through Tax access to the current tax rates and other Analysts at www.taxnotes.com. major tax law features in a wide range of countries. The country summaries, If you have any questions, or need more written by our local PwC tax specialists, detailed advice on any aspect of tax, include recent changes in tax legislation please get in touch with us. The PwC tax as well as key information about income network has member firms throughout taxes, residency, income determination, the world, and our specialist networks deductions, group taxation, credits and can provide both domestic and cross- incentives, withholding taxes, indirect border perspectives on today’s critical taxes, and tax administration. All tax challenges. information in this book, unless otherwise stated, is up to date as of 1 June 2017. Our online version of the summaries is available at www.pwc.com/taxsummaries. The Worldwide Tax Summaries (WWTS) website also covers the taxation of individuals and is fully mobile compatible, Colm Kelly giving you quick and easy access to Global Tax & regularly updated information anytime on Legal Services Leader your mobile device. PwC Ireland www.pwc.com/taxsummaries Foreword 1 Contents Foreword ...............................................1 Country chapters Algeria ..................................................4 Angola .................................................14 Botswana ............................................27 Cabo Verde ..........................................36 Cameroon, Republic of ........................55 Chad ...................................................69 Congo, Democratic Republic of the ......83 Congo, Republic of ..............................99 Egypt .................................................120 Equatorial Guinea .............................135 Gabon ...............................................142 Ghana ...............................................158 Ivory Coast (Côte d’Ivoire) .................172 Kenya ................................................185 Madagascar .......................................203 Malawi ..............................................213 Mauritius ..........................................226 Morocco ............................................244 Mozambique .....................................256 Namibia, Republic of .........................270 Nigeria ..............................................287 Rwanda .............................................303 Senegal ............................................. 316 South Africa ......................................326 Swaziland .........................................345 Tanzania ...........................................351 Tunisia ..............................................365 Uganda .............................................392 Zambia .............................................. 413 Zimbabwe .........................................428 Worldwide Tax Summaries Editorial Team ...................................441 2 Contents PwC Worldwide Tax Summaries Country chapters Africa Algeria PwC contact Lazhar Sahbani PricewaterhouseCoopers Algérie 5 rue Raoul Payen - Hydra 16 035, Alger Tel: +213 21 98 21 47 Email: [email protected] Significant developments The Finance Law for 2017 introduced a wide range of tax measures dedicated to increase the state’s revenues, as well as other provisions intended to stimulate the investment dynamic in the country. These include, notably, the following measures: • Upward revision of value-added tax (VAT) rates: The standard VAT rate is increased from 17% to 19%, while the reduced VAT rate grows from 7% to 9%. • Establishment of an obligation for companies carrying out transactions with related companies to keep analytical accounting. • Increasing from 500,000 Algerian dinars (DZD) to DZD 2 million the penalty amount relating to a failure to provide or an incomplete production of transfer pricing documentation. • Application of VAT under the self-assessment regime on the remunerations paid offshore and subject to a reduced withholding tax (WHT) rate by application either of domestic law such as international lease agreement and software remuneration or the double taxation provisions. • Introduction of an energy efficiency tax. • Removal of the obligation to pay imports via the documentary credit. Taxes on corporate income Corporate entities are taxed on activities performed in Algeria via the following two regimes: Standard tax regime Resident companies The standard tax regime is applicable for all tax resident companies, which are taxed in Algeria on their worldwide income. The standard tax regime includes the following taxes: • Impôt sur le Bénéfice des Sociétés(IBS) at the rate of: • 19% for manufacturing activities. • 23% for building activities, public works, and hydraulics, as well as tourist and thermal activities, excluding travel agencies. • 26% for all other activities not mentioned above. For mixed activities, companies should keep management accounts to determine the portion of each activity performed. Failing this, the highest rate (i.e. 26%) will be applicable for all of the taxable profits. www.pwc.com/taxsummaries Algeria 4 Algeria Nil corporate annual tax returns include the payment of a minimum corporate tax amounting to DZD 10,000. • Tax on business activity (TAP) at the rate of 1% for manufacturing activities, without any reduction. However, this tax is fixed at 2% for all other activities, with a reduction of 25% for some activities and locations, and computed based on the invoiced turnover. • VAT at the rate of 19% or 9% (except any specific exemption). See VAT in the Other taxes section for more information. • Branch tax set at the rate of 15% calculated on net profits after IBS.See the Branch income section for more information. Non-resident companies In the absence of a double tax treaty (DTT), the basic principle that governs taxation of non-resident entities is that such entities are taxable in Algeria on their Algerian-source income whatever the way and wherever the location the work is carried out, provided only that the same are rendered or used in Algeria. As a consequence, an entity will be liable for IBS via the WHT regime (see below) in Algeria through the execution of a related contract (services contract) to be performed in Algeria. From an Algerian point of view, such a contract is not an investment and is, by nature, temporary. Note that it is possible to execute several contracts under the same permanent establishment (PE). In the presence of a DTT, a foreign company will be taxed in Algeria if it has a PE only. Withholding tax (WHT) regime Non-resident entities performing service contracts in Algeria are subject to the WHT regime. The 24% WHT, which encompasses the IBS, the TAP, and the VAT, is required to be levied on services only. The calculation base is the gross amount of the services invoiced. Please note that Finance Law for 2017 subjects contracts that had been taxed under the 24% WHT to the Algerian VAT when its basis of calculation benefited from a reduction in the rate or rebates as provided for by the local tax legislation or the DTTs. Local income taxes There are no local or provincial taxes on income in Algeria. The TAP is being distributed for each district/location where there is a principal or secondary establishment. Corporate residence According to the provisions of Article 137 of the Algerian Tax Code, a company is considered as an Algerian tax resident entity in cases where it is incorporated under the Algerian law and is realising (i) commercial, industrial, or agricultural activities (physical presence obligation) or (ii) taxable profits through dependent agents. However, please note the existence of the PE concept, which can also refer to permanent place of business. 5 Algeria PwC Worldwide Tax Summaries Algeria Permanent establishment (PE) The Algerian legislation introduces the PE concept in Article 137 of the Algerian Tax Code, relating to territoriality rules of IBS. This Article provides that IBS is due in Algeria on: • Profits made by companies, which, without owning in Algeria an establishment or designated representatives, directly or indirectly perform an activity in Algeria resulting in a complete cycle of commercial operations. • Profits made by companies using the assistance of representatives in Algeria that
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