Tax incentives are provided by:
- The General Tax Code.
- Petroleum agreements concluded between oil companies and the Government of Republic of Chad.
- Mine agreements concluded between oil companies and the Government of Republic of Chad.
The main tax incentives provided by the General Tax Code are as follows:
- As of 1 January 2020, new companies under corporate Chadian law that carry out activities in the sector of agriculture, farming, renewable energies, and information and communication technologies in the first five years of their exercise benefit from a reduction of 50% of the registration fee and 50% of the corporate tax base and are exempt from business tax, minimum income tax, flat rate tax, and apprenticeship tax.
- Companies may benefit from tax reductions if an investment of at least XAF 250 million has been made in the following sectors:
- Research and mining exploitation.
- Farming, agriculture, and fishing.
- Information and communication technologies.
To benefit from tax advantages, taxpayers shall make investments of at least XAF 250 million in Chad, either by creating new activities or by extending existing activities. The investments made shall take one of the following additional forms:
- Purchase of available local products or raw materials.
- Use of at least 50% of the local workforce.
- Acquisition of land for professional use.
- Acquisition of new movable property for professional use.
- Acquisition of new equipment.
The granting of tax incentives is subject to formal requirements.
Tax advantages granted in the event of approval of the application for tax incentives are as follows:
During the installation phase, which cannot exceed 24 months, taxpayers benefit from the following tax advantages:
A reduction of 50% of the amount of business tax, minimum income tax, registration fees, flat rate tax, apprenticeship tax, and tax on the rental value of business premises.
An exemption from VAT on the acquisition of production tools whose unit value, excluding taxes, is equal to or greater than XAF 50 million.
During the operating phase, which cannot exceed three years, taxpayers benefit from the following tax benefits:
A 50% reduction in the amount of the business tax.
A reduction of 50% of the corporate tax base on eligible investments and the minimum income tax base.
Exemption from specific excise duty on local production.
- Tax incentives are available, up to the amount of investment, for an investment of at least XAF 100 million in the provinces of Chad. A 50% reduction applies to:
- the minimum income tax base
- the WHT on rental for the rents sheltering these investments, and
- registration fees on rental contracts for these investments.
Furthermore, the following tax incentives apply:
an increase of 2% in the deductibility ceiling for donations, and
a 25% reduction in the fee for the use of radio-electronic frequencies.
Tax incentives provided by petroleum and mine agreements are namely:
- Corporate tax exoneration.
- VAT exemption.
- Apprenticeship tax exemption.
- Property tax exemption.
Foreign tax credit
There are no provisions for foreign tax credit in Chad.