Gabon

Depreciation

The straight-line method and an accelerated depreciation method are permitted in Gabon. Tax and book conformity is obligatory (i.e. annual depreciation must be booked to preserve tax deductibility).

The main depreciation rates provided by the Gabonese Tax Code are the following:

Goodwill

There is no provision in the Gabonese Tax Code concerning the tax treatment of goodwill.

Start-up expenses

During the first five years of activity, a start-up can use an accelerated depreciation method on the acquired equipment goods under certain conditions and subject to specific provisions of the Gabonese Tax Code applicable to start-ups. Applicability of these provisions must be requested from the General Tax Manager prior to the incorporation of the company.

Interest expenses

Interest paid directly or indirectly to shareholders with respect to the sums made available by them to the company is only deductible within the limit of those calculated on the intervention rate on invitation to tender (TIAO) of the Bank of the Central African States (BEAC) raised by 2%, provided that the share capital is fully paid up in case of incorporation of the company as well as in case of increase of the said share capital.

Concerning corporations or limited liability companies, the deduction is only allowed with regard to the sums made available by partners or shareholders assuming in right or in fact the management of the company, only for the part of these sums that does not exceed, for the whole partners and shareholders, one and a half of the share capital fully paid up.

The interests on loans granted in view of the production of fixed assets are included into the cost of acquisition of these assets and are not admitted as deductible expenses. 

Bad debt

Bad debt can be deducted from the result of the fiscal year during which the debt became completely unrecoverable, subject to the irrecoverable character of the compromised debt being justified due to the situation of the debtor.

Provisions

To be tax deductible, provisions must relate to existing liability or loss. General provisions are not deductible.

Expenditures on rent

The amount of the rentals granted to a company is allowed as a deductible expense under the condition that it does not exceed the average rentals applied for similar buildings and amenities.

However, an exception is provided with regard to the renting of premises by a shareholder directly or indirectly owning at least 10% of the shares of the company.

Charitable contributions

Charitable contributions do not, in principle, constitute expenses deductible from the taxable result. However, contributions for charity can be deducted, provided that the donation is made to the profit of organisms of public interest located in Gabon and that the donation is justified.

The deduction is limited to 1/1,000 of the company’s turnover for the considered fiscal year.

Fines and penalties

Fines and third-party taxes borne by companies are not tax deductible.

Social security contributions paid to foreign retirement funds

The deductibility of social security contributions paid by the employer to foreign retirement funds are only allowed when paid to the benefit of employees in secondment and within a limit of 15% of the gross salary paid to these employees.

Taxes

Only professional taxes for which the recovery proceeding has started in the current fiscal year and for which the company is effectively liable due to operations carried out in Gabon can be deducted.

Net operating losses

The Gabonese Tax Code does not provide the possibility to carry back losses. It does, however, provide for a five-year carryforward for net operating losses.

Regarding depreciation deferred in the accounts, they can be carried forward indefinitely.

Payments to foreign affiliates

Management fees paid to a foreign parent company are deductible if they meet all of the following conditions:

• They reflect real transactions.
• They do not present an abnormal characteristic.
• They are not exaggerated.

Management fees determined on a lump sum basis are not deductible.

Management fees exceeding 5% of the taxable profit before deduction of the said fees are not deductible.

Fees for the use of patents, licences, trademarks, manufacturing processes, and analogous rights exceeding 5% of the taxable profit before deduction of the said fees are not deductible.

Interest paid to shareholders is deductible only within the limit of the BEAC’s normal rate for advances plus 2%, on the condition that the registered capital is entirely paid. The portion exceeding the ceiling is not deductible and is thus subject to taxation.

Concerning corporations or limited liability companies, the deduction is only allowed with regard to the sums made available by partners or shareholders assuming in right or in fact the management of the company, only for the part of these sums that does not exceed, for the whole partners and shareholders, one and a half of the share capital fully paid up.