Senegal

Group taxation is not permitted in Senegal.

Transfer pricing

The transfer pricing regulations globally correspond to the OECD requirements standards (i.e. identifying related-party transactions, choosing the suitable transfer pricing method, and preparing documentation to support the selection of such method).

Companies with an annual turnover or amount of gross assets of at least XOF 5 billion are required to make available documentation upon a tax audit. This applies when the company directly or indirectly owns more than 50% of the share capital or more than 50% of the voting rights in another company.

An annual transfer pricing tax return shall also be provided with CIT filing (by April 30). This is a kind of simplified transfer pricing documentation, which includes information such as the description of the related companies and activities performed, group transfer pricing policy, intra-group flows, etc.

Country-by-country (CbC) reporting

Companies with group revenues exceeding XOF 492 billion must file a CbC report showing the allocation of revenues, profits, and taxes paid. The company shall prepare consolidated financial statements, and own directly or indirectly one or more legal entities located in Senegal.

Also, the article 31 ter of the GTC sets out other series of criteria for a Senegalese entity to be required to file the CbCR, and article 667 of the GTC provides the application of a fine amounting XOF 25,000,000 in case of failure.

As a result, the CbCR must be:

• Filed electronically within 12 months of the end of the fiscal year ;
• Specifically in the format provided by the tax authorities; 
• Including the country-by-country profit breakdown of the multinational enterprise group to which the Senegalese entity belongs;
• Including tax and accounting data and information on the place of business of the group's companies.

Automatic exchange of the CbC report will take place between the Senegalese tax administration and other tax authorities of the jurisdictions in which the group operates and which have concluded a tax treaty providing such exchange with Senegal.

Thin capitalisation

There are no specific rules regarding thin capitalisation in Senegal. Nonetheless, the following tax and legal rules should be known:

• From a legal point of view (corporate law), the net assets must be equal to at least half of the share capital of the company. In case the net assets are lower than this threshold, the situation should be regularised by any lawful means within a period of two years following the financial year it has appeared. Otherwise, any third party could request the closing of the entity before the courts. 
• The deductibility of interest paid to a shareholder upon a loan or an advance in general is limited to a maximum rate calculated on the Central Bank legal interest rate (currently fixed at 3.5%) plus 3 points, calculated on the amount of the share capital (see Interest expenses in the Deductions section for more information). Portions exceeding this limit are not deductible for CIT purpose.

Controlled foreign companies (CFCs)

There are no provisions in Senegal for CFCs.