Corporate - Tax credits and incentivesLast reviewed - 30 March 2023
Foreign tax credit
DTTs include provisions relating to the attribution of foreign tax credits. Such tax credits aim to limit the double taxation of profits that are subject to taxation in both member states of the treaty.
Tax credits for job creation
There is a mechanism in place for granting corporate tax credits for any salaried appointments of Gabonese personnel.
This tax credit is equal to 20% of the gross salary paid to new employees and is subject to the creation of a minimum number of jobs, according to the size of the company as follows:
- Two jobs, for companies with less than 20 employees.
- Three jobs, for companies with 20 to 50 employees.
- Five jobs, for companies with more than 50 employees.
Note that the tax credit is granted only on newly created jobs since the preceding fiscal year. Contracts concluded with the employees must also be for an undetermined duration, and the new jobs must not result from the diminution of existing jobs.
Inbound investment incentives
Due to the provisions of the Investments Law, any private investment in Gabon can benefit from:
- A common law framework.
- Privileged frameworks.
- Specifically agreed frameworks.
Depending on the frameworks it is eligible for, a company can benefit from customs privileges and tax breaks.
Industrial companies already set up in Gabon and wishing to increase their production capacity can be admitted to a preferential tariff framework. This entails the application of a global reduced rate of 5% for duties and taxes paid on imports of equipment (excluding materials, furniture, and spare parts), provided that these correspond to an investment schedule and their value is in excess of XAF 100 million.
New industrial companies can also benefit from this framework, provided they are not subject to any of the other privileged frameworks outlined by current legislation.
The granting of this privileged tariff framework occurs on the basis of a decision by the Minister of Finances, following a proposal from the Director of Customs and Indirect Taxes.
Capital investment incentive
New companies are exempt from the IMF, the minimum taxation of CIT, during the first two years of operations.
Capital investment companies
Capital investment companies are exempted from CIT on income resulting from investment products and capital gain resulting from the transfer of shares. This exemption is subject to the fulfilment of cumulative conditions.
Capital investment companies operating in the following fields are exempted from CIT during the first three years of their activity:
- Research and development in the field of the protection of biodiversity.
- Technological innovation on pharmaceutical products from traditional pharmacopoeia.
- Development of ecotourism.
- Local transformation of raw materials.
- Development and innovation in telecommunication and information technologies.
- Development of agro-industries.
Social housing incentive
There are some tax exemptions applicable exclusively to authorised companies during the performance of a social housing investment project.
Favourable measures are applicable with regards to the importations of materials, engines, and equipment destined to authorised companies. Indeed, such importations are exempt from customs duties. They can also be imported under the normal temporary admission.
The concerned companies may apply before the customs authorities in order to benefit from the above-mentioned regime.
The concerned companies are those authorised for the planning of urban lands intended for social habitat and the building of housings of a socio-economic nature and industrial units of manufacturing of materials and other inputs used for the building of social housings. The above-mentioned tax exemptions relate to CIT, VAT, and business license tax.
Companies having hotel activity in the tourism sector are exempted from CIT during the first three years of existence, provided that the amount of the investment equals or exceeds XAF 300 million. If not (i.e. investment of less than XAF 300 million), aforesaid authorised companies investing in the tourism sector can benefit, during a five-year period, from a 5% tax credit.