Ivory Coast (Côte d'Ivoire)

Inventory valuation

Inventory is generally stated at the lower of cost or market value. Last in first out (LIFO) and first in first out (FIFO) methods are permitted. Book and tax conformity is required.

Capital gains

Capital gains are normally taxed at full corporate rates. However, the tax on capital gains, exclusive of recaptured depreciation, can be deferred if the gain is reinvested within three years.

Capital gains from direct sales of shares are subject to IRVM (i.e. securities income tax).

Dividend income

Dividends are brought into taxable income at 50% of the net amount earned by the company (after 15% WHT).

The exemption is increased to 95% for dividends received from a subsidiary if a parent company domiciled in Côte d’Ivoire owns 10% of the subsidiary.

Stock dividends

Stock dividends are unusual, but in the event they are declared, they are not taxable to the recipient.

Interest income

Interest from loans is brought into taxable income at 50% of the net amount earned by the company (after 18% WHT).

Royalty income

Royalty income received by a local taxpayer is included in its annual revenue and subject to corporate income tax (CIT).

Royalty income paid by a local taxpayer to a non-resident is subject to a 20% WHT, subject to the existence of a DTT between Côte d’Ivoire and the country of the effective recipient of the royalties.

Most DTTs will provide a reduced rate of 10% or 5% for WHT on royalties.

Royalties are defined by tax treaties.

In the absence of a DTT, the 20% WHT applies to all services payments to non-residents, including royalties.

Foreign income

Resident corporations are taxed on their worldwide income, except for profits derived from business conducted through a PE outside Côte d’Ivoire. Since income derived from business conducted outside Côte d’Ivoire is not taxable, no tax credit is allowed.

Interest and dividends from foreign sources are entitled to certain deductions to alleviate instances of double taxation. Subject to provisions of tax treaties, no deductions or tax credits are allowed for revenue from royalties and services.