Depreciation and depletion
The rates of depreciation are not provided by the law. The rate is determined on the normal and predictable duration of use of the asset by taking into account normal wear and tear. In practice, there are standard rates for common assets. Accelerated depreciation can be applicable, subject to conditions.
There are no provisions in Senegal for goodwill.
Start-up expenses are deductible if justified and approved by the shareholders.
Interests on current account advances or loans from a shareholder (directly or indirectly) or a related party are subject to restrictions as to their deduction from taxable income:
The share capital of the company receiving the loan or advance shall be, beforehand, fully paid.
The amount of the loan or advance shall not exceed the share capital of the company receiving it. It is not an individual but an overall ceiling on the total amount of loans and advances of all shareholders and seniors.
- The rate of interest shall not exceed the rate of advance of the Institute of Emissions plus 3 points. The rate published by the Ministry of Economy and Finance for 2017 is 3.5437%.
There are no provisions in Senegal for bad debt.
Only payments made to specific chartered organisations are deductible, at a rate of up to 0.5/100 of turnover. On the contrary, payments made to non-chartered organisations are not deductible.
Fines and penalties
Fines and penalties are not deductible for CIT purposes.
CIT and the company tax on vehicles are not deductible.
Other significant items
Provisions are deductible if they correspond to a risk or a probable cost that is more than possible and leads to a decrease in the assets. Provisions for paid holidays and retirement compensation are not deductible.
Net operating losses
Tax losses may be carried forward to the next three years. Losses corresponding to the depreciation of assets can be carried forward indefinitely. The carryback of losses is not allowed.
Payments to foreign affiliates
Reasonable royalties, interest, and management service fees paid to foreign parent companies are deductible. Supporting documents (e.g. invoices, contracts) will be necessary to prove that these expenses are justified.