The tax year in Senegal is the calendar year.
Companies must file CIT returns, simplified TP return, LEC on added value and financial statements by 30 April of the year following the tax year.
Also, in addition to the miscellaneous annual returns (LEC on rental value, company car tax, etc.) and other monthly tax returns (VAT, payroll taxes, WHT, etc.), taxpayers must file by 31 January for the prior financial year:
- An annual recapitulative payroll tax return,
- An annual recapitulative return on payment for services,
- An annual recapitulative return on payment for rents.
Payment of tax
CIT must be paid in two instalments (each equal to one-third of the previous year’s tax) by 15 February and 30 April. The outstanding balance payment amount of the tax due must be paid by 15 June.
For the first financial year of a newly incorporated company, no instalment is due; the new company pays the whole CIT before 15 June of the following year.
In case of late payment, a 5% interest of delay on the amount due plus an additional 0.5% duty per month of delay or portion of month of delay are applicable. This late payment is due when the taxpayer’s regularisation is spontaneous.
On the other hand, if such payment is triggered by a tax audit from the authority itself after the deadline is crossed, the following penalties apply:
- 50% for any WHT and VAT.
- 25% for other taxes (CIT, business licence tax, taxes on real estate, registration duties, company car tax).
Also, the late filling of tax returns triggers an XOF 200,000 penalty per return.
Tax audit process
The tax authorities may request information, clarifications, or justification to the taxpayers. The taxpayers have 20 days to answer to those requests.
The tax authorities may also implement an inspection of the accounting documents at the premises of the taxpayer or at any place the taxpayer would consider more appropriate for material reasons upon a specific request. In such cases, a notice is sent to the taxpayer at least five days before the beginning of the inspection.
The tax authorities are not allowed to process a new tax inspection on a period already inspected by their services unless a new element or document is revealed after the first inspection was processed.
Where the tax authorities estimate that the taxpayer has not fulfilled all of one’s tax obligation, a tax reassessment shall be transmitted to the taxpayer, who has 30 days in order to answer or comment on the findings.
After the tax authorities have received those comments, they can confirm partially or totally the reassessment within a statutory delay of 60 days.
Statute of limitations
The statute of limitations is, generally speaking, four years.
Topics of focus for tax authorities
With regards to corporate tax compliance, the tax authorities are generally focusing on certain expenses with forbidden or limited deductibility, such as depreciation of assets, provisions, interest, royalties/services fees, insurance premiums, head office costs, etc., but they usually define their approach according to the business sector of the company.
Recently, tax authorities have also focused on transfer pricing issues by requiring documentation upon their tax audit. The implementation of BEPS Action 13 is likely to result in more interest on this subject.