Ivory Coast (Côte d'Ivoire)
Foreign tax credit
Since income derived from business conducted outside Côte d’Ivoire is not taxable, no tax credit is allowed.
A new Investment Code was enforced in October 2018, the aim of which is to favour:
- sustainable development by producing socially responsible investments in Côte d’Ivoire
- local and regional development
- local content (employment of nationals), and
- competitiveness of companies.
The Investment Code regimes involve the creation of three zones (A, B, and C), which will be defined by an Order issued by the government.
The duration for the granted tax benefit is:
- 5 years for Zone A.
- 10 years for Zone B.
- 15 years for Zone C.
The Investment Code includes two specific tax incentive regimes: the Investment Declaration Regime and the Investment Approval Regime. Both regimes apply to all economic activities, excluding finance and banking, non-industrial buildings builders, liberal activities (e.g. lawyer, notary), and commerce activities. However, investment related to the creation or the development of important shopping centres could qualify for the exemptions if certain conditions are met.
The new Code has also created priority economic sectors (Category 1), as opposed to non-priority economic sectors.
Category 1 includes:
- Agriculture and agro-industrial activities.
- Hotels for projects from XOF 5 billion in Zone A and from XOF 2 billion in Zones B and C.
- Private investment in high and specialised education.
Category 2 includes all other economic sectors (except those excluded from the benefit from the Investment Code) and hotel projects that do not reach the thresholds for Category 1.
A company eligible for Category 1 can take a definitive option for Category 2 when submitting one's demands for the investments approval regime in Category 1.
The Investment Declaration Regime has no minimum investment threshold, but has special requirements related to the activities of the company.
For the Investment Approval Regime, the minimum investment cost is:
- XOF 200 million (VAT and working capital exclusive) for large companies (with more than XOF 1 billion turnover).
- XOF 50 million (VAT and working capital exclusive) for SMEs.
- For shopping centres: XOF 10 billion in Zone A and XOF 5 billion in Zones B and C.
- For Category 1 hotels: XOF 5 billion in Zone A and XOF 2 billion in Zones B and C.
- For Category 2 hotels: Less than XOF 5 billion in Zone A and less than XOF 2 billion in Zones B and C.
- For major structuring investments: XOF 100 billion in Zone A, XOF 50 billion in Zone B, and XOF 15 billion in Zone C.
The benefit from the Investment Code is granted by the Centre for the Promotion of Investments (named CEPICI), after an application is filed by the requestor.
During the investment period, the beneficiary enjoys the following:
- Exemption from customs duties (excluding statistic fee and community levies).
- Temporary suspension of VAT on acquisition of equipment, goods, and service for activities subject to VAT.
- Exemption of VAT for activities exempted.
After the completion of the investment, the beneficiary enjoys the following exemptions during a period that depends on the Category of activity and Zone the company is located in.
The investments companies approved for developing activities are not concerned by the below exemptions.
- 50% CIT exemption during five years for large companies and 75% CIT exemption for five years for SMEs.
- 50% CIT exemption from business licence tax for five years for large companies and 75% exemption for five years for SMEs.
- 50% exemption from real estate tax for five years for large companies and 75% exemption for five years for SMEs.
- 50% exemption from employer contribution on salary for five years for large companies and 75% exemption for five years for SMEs.
- 100% exemption for CIT, business licence tax, real estate tax, employer contribution on salary, and dividend tax for five years.
- 50% exemption for the same taxes for large companies and 75% exemption for SMEs for the last five years.
- 100% exemption for CIT, business licence tax, real estate tax, employer contribution on salary, and dividend tax for ten years, and 50% exemption for the same taxes for large companies for the last five years.
- 100% exemption for CIT, business licence tax, real estate tax, employer contribution on salary, and dividend tax for 15 years for SMEs.
Category 2 investments enjoy:
- 25% CIT credit for Zone A for large companies and 37.5% for SMEs.
- 35% CIT credit for Zone B for large companies and 52.5% for SMEs.
- 50% CIT credit for Zone C for large companies and 75% for SMEs.
These incentives may not be combined with sector-specific investment programs, such as those for mining and hydrocarbons.
Capital investment incentives
With prior approval of the tax authorities and varying with geographical location, 35% to 40% of the total investment in fixed assets related to commercial, industrial, or agricultural activity may be deducted from taxable income. The deduction is limited to 50% of taxable profits. The balance of deduction of the first year may be carried forward over the three following years.
The minimum investment threshold required to benefit from the tax reduction measure is XOF 100 million. This amount is reduced to XOF 25 million for small and medium-sized enterprises (SMEs).
Tax credit for waste recycling business
A tax credit is granted to waste recycling business for the four years following the end of the investment.
This tax credit is equal to 10% of the investment amount but cannot exceed 50% of the taxable profits.
Special incentive tax measures for investments in agro industry
Special incentive tax measures are granted for investments made in cashew and rubber processing under the approval investments regime of the Investment Code.
The specific incentive measures provide additional tax credits and exemptions regarding companies operating in Category 1.
Tax credit for hiring and training
Tax credits are available for small and medium enterprises (SMEs) and large companies for hiring local individuals and interns for degree validation internships.
No VAT is levied on export sales.
Export incentives for the mining industry
During the exploration phase, investments may be exempt from payroll tax; VAT on goods and services; additional tax (on the sale of goods) on imports and purchases; all import taxes and duties, including VAT on materials, machines, and equipment used in research activities; registration duties applicable to in-kind or cash share-capital contributions; real estate tax; CIT; and minimum tax.
In the exploration phase, mining subcontractors can benefit from the same import VAT and customs exemptions granted to mining title holders.
Under the FY21 Financial Law, mining activities can no longer benefit from the corporate tax five-years exemption. However, they remain exempted from all import duties, including VAT on recovered investment necessary for operation, special equipment tax, business franchise tax, etc. In addition, they may be granted temporary admission of machines and equipment that facilitate research and exploitation. Mining subcontractors are exempt from customs duties, including VAT on importing of liquid or gas fuels, lubricants, and chemical or organic products intended for the treatment of minerals, for the whole duration of the mine.
A tax on profit is levied as soon as investment funds are recovered. Mining enterprises may not combine these incentives with those of the Investment Code.
Export incentives for petroleum service contractors
A special and optional tax treatment applies to petroleum service contractors that meet established criteria. The FY21 Financial Law provides for two rates as follows:
- 6% for service providers to oil companies in the exploration phase.
- 2.17% for service providers to oil companies in the exploitation phase.
The above-mentioned rates are applicable on all tax-free turnover made in Côte d'Ivoire (FY22 Financial Law).
This optional simplified tax regime covers dividend tax and payroll tax.
CIT and the tax on insurance premiums are exempted.
Standard rates apply for business franchise tax and social security contributions for local personnel. The exemption from customs duties and VAT for oil companies is extended to petroleum service contractors.
Favourable tax regime for investment companies with fixed capital
The 2022 tax schedule provides for a favourable tax regime for the benefit of fixed capital investment companies. This regime results in exemptions, particularly in terms of income tax and IRVM, for a period of 15 years from the date of creation of the company. They also benefit from exemptions on capital gains from the sale of securities as well as in terms of registration fees.
Favourable tax measures for microinsurance companies
Microinsurance companies and operations have benefited from the following tax advantages since the entry into force of the 2022 tax schedule:
- Reduction in the tax rate on insurance contracts for microinsurance contracts.
- Reduction of the registration fee on microinsurance agreements.
- Reduction of the TOB rate on bank charges for loans granted to microinsurance companies.