Equatorial Guinea

Corporate - Deductions

Last reviewed - 20 July 2021

Depreciation

A straight-line method of computation of depreciation should be applied to fixed assets according to the normal useful lives of the assets involved, as provided by the Tax Code.

Goodwill

Goodwill is, in principle, not deductible.

Start-up expenses

Start-up expenses can be amortised (regarding tangible assets) or fully deductible (regarding registration costs and fees).

Interest expenses

Interest expenses are deductible if they do not exceed the limit for loans set up by the Central Bank.

Bad debt

Bad debts are deductible, given they are supported.

Charitable contributions

Charitable contributions are deductible, given they are for philanthropic, sport, educative, scientific, social, or family purposes and do not exceed 0.5% of the turnover for the fiscal year of the company.

Fines and penalties

Fines and penalties are not deductible.

Taxes

Only professional taxes are deductible.

Net operating losses

Net operating losses can be carried forward for three years (five years for companies belonging to the oil and gas sector). Losses cannot be carried back. Losses of one entity cannot be transferred to another entity in a reorganisation.

In theory, when the results of a company, no matter the kind of company, are negative during a maximum period of three consecutive years, this company will immediately be removed from the register by the Tax Administration for the practice of the activity for which it was registered, except when the company is newly created.

Payments to foreign affiliates

The deductibility of the technical assistance made by the parent company to its subsidiary is limited to 50% of the intermediary tax result (accounting result plus potential fiscal reintegration).

In case of a deficit, the relevant basis for the evaluation of the foreign technical assistance amount to be reintegrated will be the intermediary result of the last beneficiary fiscal year.