Corporate - Income determinationLast reviewed - 30 March 2023
Stocks are estimated at cost price. If the market price is lower than the cost price, the company has to make provisions for depreciation of inventory.
Capital gains arising from the transfer of assets must be used for the calculation of taxable profits. However, the tax on capital gains can be deferred if a company reinvests an amount equal to the capital gain and the sale price of the transferred asset back into its fixed assets within three years.
Capital gains realised on the transfer of legal rights of persons or entities, whose asset is, in its majority, constituted of such rights or rights directly or indirectly owned in a company located in Gabon, are subject to CIT in Gabon. In this context, the Gabonese company must collect and remit to the tax administration a discharge levy of 20% made on the capital gains of the transfer of legal right within one month from the date of transfer.
The rate of transferable securities income tax (Impôt sur le Revenu des Capitaux Mobiliers or IRCM) is 20% on distributed dividends.
IRCM charged on the beneficiaries of the earnings is withheld at source by the distributing company. It is paid over to the Registration Officer within 30 days from the payment of the dividends.
Inter-company dividends are taxed at a reduced rate in full discharge of the 20% WHT if paid and received by or from companies with their registered office in a CEMAC country, shares were allotted at the time of issue or kept for two years, and the Gabonese company owns more than 25% of the share capital of the subsidiary.
Interest income paid to companies is subject to a 20% WHT in Gabon. When paid in respect of bonds of five years or more, it is subject to a 10% WHT.
Royalty income is subject to CIT at a rate of 30% (35% for companies operating in the oil and mining sectors).
Foreign interest, royalties, and dividends are included in taxable income, subject to international tax treaties. Note that tax treaties provide that certain/all types of income are not includable in Gabon taxable income. Gabon has tax treaties with Belgium, France, the other countries of CEMAC, and some countries that continue to apply the provisions of the African and Malagasy Common Organisation (OCAM) tax treaty.
The concept of deferred tax is not applicable in Gabon.