Equatorial Guinea

Equatorial Guinea law does not provide specific provisions for taxation of groups.

Transfer pricing

There are no specific rules regarding transfer pricing, even if there are indirect references in the Tax Code.

Indeed, according to the Tax Code, in order to determine the CIT liability of entities under dependence and control of companies located outside of Equatorial Guinea, any transfer of profits shall be recorded in the accounting’s profits and losses.

Furthermore, the Economic and Monetary Community of Central Africa (CEMAC) Directive related to CIT states that head office costs are fully deductible if they correspond to real operations, and they are neither unusual nor exaggerated.

However, there is no regulation in force providing a definition of ‘transfer of profits’ and neither any criterion that would allow the determination of the ‘exaggerated’ nature of costs.

Finally, the new foreign exchange regulations applicable within the CEMAC Zone since 1 March 2019 provides the following requirements for inter-group services: requirement to respect the arm's-length principle, requirement of effective service delivery and that they correspond to real needs, and requirement for the payment of a fair price.

Thin capitalisation

According to the Tax Code:

“Interest paid to the partners for amounts made available to the company, in addition to their capital contributions, no matter the form of the company, will be admitted (for deduction) within the limits established for the advances of the Central Bank.

In incorporated or limited companies, the deduction of interest will not be allowed for partners or shareholders that have the right to hold, or actually hold, the company management except to the extent that the amounts deposited do not exceed the combination of the contributions of these partners or shareholders."

Controlled foreign companies (CFCs)

According to the Tax Code:

“Regarding legal entities located outside of Equatorial Guinea and which have subsidiary or interdependence ties with other legal entities or companies located in Equatorial Guinea, the place of their taxation will be the same as that of the legal entities or companies with which it maintains those ties (i.e. Equatorial Guinea). These latter are jointly and severally liable for the payment of the tax owed by the legal entities located outside of Equatorial Guinea.”