You’ve finally completed the feasibility study for your commercial, industrial, artisanal, agricultural, maritime, or service-based project.

The question of the taxation that your business will be subject to arises.

Indeed, every professional activity is subject:

• to a tax on profits,
• and to a value-added tax (VAT) on its commercial operations.

Tax on Profits

Companies, public establishments, associations, funds, coordination centers.

With the exception of a limited list, the choice of the company’s form entails mandatory liability to corporate tax (CT).

The amount of this tax results from the application of a progressive rate ranging from 10 to 31% on the amount of the taxable profit.

The following types of businesses are excluded from the CT regime:

• General partnership, Limited partnership, or de facto companies formed between natural persons (except by choice)
• Partnership Company (except by choice)
• Economic Interest Group
• Certain real estate companies

Natural persons, partnerships, or partnerships

The individual exercise of a profession entails mandatory liability to income tax (IT).

The amount of this tax results from the application of a progressive rate ranging from 10 to 38% on the taxable income.

Income derived from a profession is subject to IT according to the real net profit (RNP) regime determined through accounting kept in accordance with the provisions of Accounting Law 9-88.

However, the entrepreneur can opt in writing for the derogatory regimes of:

• Simplified net income (SNI)
• Flat-rate taxation
• Self-employed regime

This option is valid only when the annual turnover does not exceed the following limits:

Value Added Tax (VAT)

With the exception of legally listed situations, operations carried out within the national territory or on importation are subject to VAT.

The standard rate is 20%.

Specific rates of 7%, 10%, 14% also apply to certain operations.

At the start, every business must choose either the cash receipt regime or the debit regime.

The cash receipt regime involves payment to the Treasury of the invoiced VAT after its effective receipt, reduced by the VAT actually paid upstream.

The debit regime involves payment to the Treasury of VAT upon invoicing to customers, reduced by the VAT paid upstream.

This regime is notably adopted by exporting companies or those exempt from VAT on their transactions, with the right to deduction or reimbursement.

To optimize the choice of your tax regime, seek advice from our team of specialists.