www.pwc.com/taxsummaries Worldwide Tax Summaries Corporate Taxes 2016/17 Quick access to information about corporate tax systems in 155 countries worldwide. Africa Worldwide Tax Summaries Corporate Taxes 2016/17 All information in this book, unless otherwise stated, is up to date as of 1 June 2016. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. © 2016 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 2016/17 edition of Worldwide Tax Summaries (WWTS), one of the most comprehensive tax guides available. This year’s edition provides detailed information on corporate tax rates and rules in 155 countries worldwide. As governments across the globe are If you have any questions, or need more looking for greater transparency and detailed advice on any aspect of tax, with the increase of cross-border please get in touch with us. The PwC tax activities, tax professionals often need network has member firms throughout access to the current tax rates and other the world, and our specialist networks major tax law features in a wide range can provide both domestic and cross- of countries. The country summaries, border perspectives on today’s critical written by our local PwC tax specialists, tax challenges. A list of some of our key include recent changes in tax legislation network and industry specialists is located as well as key information about income at the back of this book. taxes, residency, income determination, deductions, group taxation, credits and I hope Worldwide Tax Summaries incentives, withholding taxes, indirect continues to be a valuable reference tool taxes, and tax administration. All in helping you manage your organisation’s information in this book, unless otherwise taxes around the world. stated, is up to date as of 1 June 2016. Our online version of the summaries is available at www.pwc.com/taxsummaries. The WWTS website is fully mobile compatible giving you quick and easy access to regularly updated information anytime on your mobile device. Some of the enhanced features available Colm Kelly online include Quick Charts to compare Global Tax Leader rates across jurisdictions, and reference PwC Ireland materials on Organisation for Economic +353 1 792 8943 Co-operation and Development (OECD), [email protected] European Union (EU), and World Trade Organisation (WTO) member countries, amongst other valuable information. www.pwc.com/taxsummaries Foreword 1 Contents Foreword ...............................................1 Global Tax Contacts Building trust in society and Country chapters solving important problems ..............390 Algeria ..................................................4 Indirect Taxes ...................................392 Angola ................................................ 13 International Tax Services ................395 Botswana ........................................... 26 Legal Services ...................................399 Cabo Verde ......................................... 34 Mergers and Acquisitions ..................402 Cameroon, Republic of ....................... 52 People and Organisation ..................406 Chad .................................................. 64 Tax Controversy and Dispute Congo, Democratic Republic of the ..... 76 Resolution ........................................409 Congo, Republic of ............................. 90 Tax Policy and Administration ..........412 Egypt ................................................110 Tax Reporting and Strategy ..............414 Equatorial Guinea ............................123 Transfer Pricing ................................418 Gabon ..............................................130 Value Chain Transformation .............421 Ghana ..............................................145 Global Tax Industry Leaders .............423 Ivory Coast (Côte d’Ivoire) ................156 Worldwide Tax Summaries Kenya ...............................................167 Editorial Team ..................................424 Madagascar ......................................181 Malawi .............................................190 Mauritius .........................................202 Morocco ...........................................218 Mozambique ....................................229 Namibia, Republic of ........................241 Nigeria .............................................256 Rwanda ............................................270 Senegal ............................................281 South Africa .....................................290 Swaziland ........................................307 Tanzania ..........................................313 Tunisia .............................................325 Uganda ............................................349 Zambia .............................................365 Zimbabwe ........................................378 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 supplementary Finance Act for 2015 introduced new provisions in terms of corporate income tax (Impôt sur le Bénéfice des Sociétés or IBS). The IBS rate is fixed at: • 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 the whole taxable profits. Taxes on corporate income Corporate entities are taxed on activities performed in Algeria via the following two regimes: Standard tax regime 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: • 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 the all of the taxable profits. Nil corporate annual tax returns include the payment of a minimum corporate tax amounting to 10,000 Algerian dinars (DZD). • 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. • Value-added tax (VAT) at the rate of 17% or 7% (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. 4 Algeria PwC Worldwide Tax Summaries Algeria Withholding tax (WHT) regime Non-resident entities performing service contracts in Algeria are subject to the WHT A 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. 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 permanent establishment (PE) concept, which can also refer to permanent place of business. 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 don’t have a separate professional personality from these companies. Based on the above, a PE is created under Algerian law if a professional activity is performed in Algeria by a foreign entity and this activity is generating a complete business cycle, or in the case whereby a foreign company is making profits in Algeria through a dependent agent. 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.