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Burkina Faso Taxes fact sheet

Taxation of companies in Burkina Faso is governed by the following pieces of legislation:

§ Act No. 008-2010 / AN of 29 January 2010 regarding the creation of a corporate income tax.

§ Act No. 006-2010 / AN of 28 January 2010 regarding a change in law No. 6-6. / AN of 26/05/1965, establishing the code of direct and indirect taxes and the tobacco monopoly, all its amendments.

§ Act No. 038/98 / AN regarding a change to the tax code relating to the tax on industrial profits, commercial and agricultural, with the minimum tax on industrial and commercial professions and recovery procedures.

§ Act No. 6/6. / AN of 1. May 196. regarding the creation of direct and indirect taxes and code of the tobacco monopoly

Incentives for small industries and small businesses

Small industries and new small businesses are exempt from business tax for two years from the effective start of their activities, duly noted by the tax authorities.

Small industries and small businesses adhering to approved management centres benefit from the tax advantages below:

- A 30% reduction on tax on profits;

- A reduction of 50% of the fixed minimum charge;

- A reduction of 20% of the employer's and learning tax

 

Table 1: Corporate taxes

 

Corporate taxes

 

Taxable persons

Are liable to corporate tax because of their form:

a) capital or equity investments companies, regardless of their purpose: public limited companies and limited liability partnerships including those with only one single partner;

b) partnerships, limited partnerships, joint ventures and Economic Interest Groups (EIG);

c) cooperative societies and their unions, legally assimilated associations and organizations

 

Are taxable because of their activities:

a) public institutions, state agencies or local authorities, which enjoy financial autonomy and indulge in an activity in industrial or commercial or profit-making activities;

b) funds established by law or regulation not enjoying legal entity status and whose management is entrusted to public or private organizations, where such funds are not specifically exempted by a legislative provision;

c) civil societies which:

is engaged in business, industrial, craft, agricultural or commercial operations, including:

- When they engage in intermediate operations for the purchase or sale of real estate or business,

- Real estate companies shares or when they normally buy in their own name the same goods for resale;

- When performing the subdivision and sale, after execution of development works and servicing of land acquired for valuable consideration;

- When they give for rent a commercial or industrial facility equipped with the furniture and equipment necessary for its operation, as rental includes or not all or part of intangible assets of the business or industry.

- Include among their members one or more capital companies or have opted for this tax system.

d) individual companies;

e) any other legal entities carrying on a business or profit-making activities, or who would not be subject to another tax on income.

Are taxable on option:

a) financial unions;

b) professional civil societies.

The option is irrevocable and may be exercised by the partnership from the previous transformation of stock companies.

To be valid, the option must be signed by all partners and notified the service of the place of taxation within three months of the beginning of the fiscal year.

Taxable products

Taxable products include:

- Sales and revenues;

- Miscellaneous or extraordinary income ;

- Income or ancillary benefits;

- Financial income and gross income from investments ;

- Income from the rental of developed and undeveloped properties, including ancillary revenue;

- The bonus on recovery and disposals of packaging;

- The work done by the company itself;

- Operating subsidies and balancing subsidies;

- Work in progress valued at cost;

- Reversals and expense transfers;

- Rebates obtained from the administration for deductible taxes;

- Gains on disposals of items of fixed assets.

Exemption

Are exempt from tax:

1. Consumer Cooperatives Companies that simply group the orders of their members and to distribute their consignment stores foodstuffs, products or goods which have been the subject of such orders;

2. public institutions of the State or local authorities not having an industrial or commercial character;

3. Agricultural credit unions operating in accordance with the legal provisions governing them;

4. mutual or cooperative institutions of savings and credit constituted in accordance with Law No. 59-9. / ADP of 15/12/199. concerning regulation of mutual or cooperative savings and credit;

5. Central Bank of the West African States

6. agricultural cooperatives, agricultural associations of general interest, insurance companies and agricultural mutual reinsurance operating in accordance with the legal provisions governing them;

7. fraternal benefit societies;

8. Professional civil companies

9. approved management centres;

10. associations or non-profit organizations subject to full respect of their object;

11. investment companies and securities management and holding company for the portion of the profits from the net proceeds of their portfolio or capital gains they realize on the sale of securities or shares part this portfolio.

Rate

The corporate tax rate is 27.5%. It is without deduction to taxable income of companies.

Any fraction of taxable income less than one thousand  (1,000) CFA francs is neglected.

Fixed minimum charge

 

There shall be a minimum fee of perception of corporation tax in respect to a given year, depending on the turnover excluding tax of the period.

  • Taxable persons

It is owed by the loss-making companies or whose taxable income does not generate a tax on companies higher than a rounded amount to the lower one hundred thousand (100,000) CFA francs.

  • Tax rate

A rate of 0.5% is applied, the amount can not be less than

- One million (1,000,000) CFA francs for taxpayers under the normal tax real earnings regime

- Three hundred thousand (300,000) CFA francs for taxpayers under the simplified tax real earnings system.

  • Discount

Adherents of approved management centres receive a discount of 50% of the fixed minimum charge.

  • Exemption

New companies are exempt from the minimum fee for their first year of operations.

Instalments

 

The corporate tax gives rise, under the current financial year, to the payment of three equal instalments calculated on the basis of 75% of the amount of tax due for the last financial year, called " reference year ".

 

When the reference year is of a length greater than one year, the amount of payments is calculated on the tax due for that year reported on a twelve-month period.

 

The newly established companies or newly subject to corporate tax are exempt from payment by instalments during their first year or the first tax period.

 

Payments must be made spontaneously at the latest on July 20, October 20 and January 20 each year to the headquarter's tax collector

Collection and withholding tax as interim profits

 

Taxable persons/activities

Are subject to withholding imports of goods, regardless of their situation with regard to import duties and taxes, sales by any importer, manufacturer or merchant to any natural or legal person liable to tax companies, the income tax or contribution of the informal sector.

Sales of goods by importers, manufacturers and wholesale traders and semi-bulk, except those they carry in their stores exclusively at retail, are deemed to be granted the benefit natural or legal persons facing the withholding tax as a deposit on income taxes.

This destination presumption is irrefragable.

· Levy Base

It consists of:

1. for imports, the value of the goods as defined in Article 1. of Regulation No 05/1999 / CM / UEMOA of 06/08/1999 concerning customs value of the goods, plus duties and taxes collected by the customs service, including excise duties and VAT;

2. for sales, the price charged to the customer or any monies, securities, goods or services received or receivable consideration, including excise duties and VAT. The base thus defined includes all charges and taxes.

Rebates, discounts and reductions granted through asset notes to manufacturers, importers and bulk and semi-bulk traders are deemed net of the levy. They can not give rise to correction, as assets, of the levy which was initially billed.

· Levy rate

The levy rate is as follows:

1. for imports, the rate is 5%. It is reduced to 1% for imports by taxpayers under the effective tax regime;

2. for sales, the rate is 2%. However, this rate is reduced to:

- 1% for hydraulic cement, sugar, wheat flour, kola nuts.

- 0.2% for hydrocarbons.

 

 

 

Table 2 : Tax on Industrial, Commercial and Agricultural Profits (RPIC BA)

 

Tax on industrial, commercial and agricultural profits (RPIC BA)

Taxable persons

Are also liable to that tax:

 

1. individuals who usually buy on their behalf, in order to resell them, buildings or businesses;

2. individuals who usually buy on their behalf, shares of real estate companies or subscribe for resale;

3. individuals who usually subscribe to shares issued by real estate companies in order to sell them;

4. individuals ordinarily engaged in intermediate operations for the purchase, subscription or sale of the property referred to in points 1,. and 3;

5. individuals who make capital gains in respect to the disposal of mining permits and quarrying  authorization  and assignment of rights on the license;

6. individuals who carry the subdivision and sale of land belonging to them;

7. individuals who rent a commercial or industrial facility equipped with the furniture and equipment necessary for its operation, as rental includes or not all or part of intangible assets of the business or industry;

8. contractors, dealers and farmers communal rights;

9. founders of educational institutions;

10. furnished apartment renters. However, are not taxable individuals who simply rent a room integral to their apartment;

11. any other individuals engaged in any business or industrial or commercial operations.

Taxable products

Excluding income from movable capital and product leasing of developed and undeveloped properties that are not listed on the balance sheet, taxable products are:

- Sales and revenues;

- Miscellaneous or extraordinary income ;

- Income or ancillary benefits;

- Financial income and gross income from investments ;

- Income from the rental of developed and undeveloped properties, including ancillary revenue;

- The bonus on recovery and disposals of packaging;

- The work done by the company itself;

- Operating subsidies and balancing subsidies;

- Work in progress valued at cost;

- Reversals and expense transfers;

- Rebates obtained from the administration for deductible taxes;

- Gains on disposals of items of fixed assets.

Rate

The following progressive rates for each income is applied:

 

Income bracket

 

Rate

 

0 to 500 000

 

10%

 

500 001 to 1000 000

 

20%

 

More tha 1 000 001

 

27,5%

 

 

Any fraction of taxable income less than one thousand  (1,000) CFA francs is neglected.

Adherents of approved management centres have a 30% reduction of income tax.

Fixed minimum charge

 

There shall be a minimum fee of tax collection on the industrial, commercial and agricultural purposes in a given year, based on revenue excluding taxes of the period.

For the calculation of minimum revenue referred to above shall be rounded to one hundred thousand (100,000) CFA francs lower.

  • Tax rate

A rate of 0.5% is applied, the amount can not be less than

- One million (1,000,000) CFA francs for taxpayers under the normal tax real earnings regime

- Three hundred thousand (300,000) CFA francs for taxpayers under the simplified tax real earnings system.

  • Exemption

New businesses are exempt from fixed minimum charge for their first year of operations.

 

 

 

 

 

 

 

Table 3 : Income tax for non-commercial professions

 

Income tax for non-commercial professions (BNC)

 

Taxable Persons

For the benefit of the state budget an annual income tax is established:

 

- Liberal professions. A liberal profession is understood to be that in which intellectual activity is the main role and which consists in the personal independent practice of a science of art. Liberal professionals which help colleagues without being subordinate to them are considered to be practising a liberal profession ;

- And from offices whose holders do not have the quality merchants;

- All other occupations, lucrative operations and  sources of profit not subject to a special tax on income.

- Professional civil companies

Taxable income

Taxable income

In addition to the revenues derived directly from the practice of professions taxable persons, taxable income also includes:

- Proceeds from stock transactions by individuals;

- Copyright products perceived by artists, writers and composers or other beneficiaries and their heirs or legatees;

- Non-wage income of athletes;

- Income received by the inventors under either of the concession to exploit their patent licenses, or the assignment or licensing of trademarks, manufacturing processes or formulas;

- Income received by event organizers;

- Any other income from the ancillary operation of a non commercial activity by non registered persons.

Rate

On taxable income shall be applied the following progressive rates for each income:

 

 

 

Income bracket

 

Rate

 

0 to 500 000

 

10%

 

500 001 to 1000 000

 

20%

 

More than 1 000 001

 

27,5%

 

 

Any portion of the taxable income of less than 1,000 francs is neglected

Adherents of approved management centres benefit from a 30% tax reduction.

The due income tax amount may not be below the following amount, even in case of losses being registered:

- Fifty thousand (50,000) CFA francs for private practice nursing authorized and carrying out their activities in accordance with the laws in force;

- Two hundred thousand (200,000) CFA francs for the birthing clinic properly authorized and carrying out their activities in accordance with the legislation in force.

Fixed minimum charge

 

For all other professions, the minimum charge is:

- One million (1,000,000) CFA francs for those covered by the benefit of sustainable effective tax system

- Three hundred thousand (300,000) CFA francs for those under the real earnings of the simplified tax system

 

 

Table 4: Employer tax and learning

 

 

Employer tax and learning

 

Taxable Persons

It is for the benefit of the state budget that an employer and learning tax was established at the expense of natural and legal persons and organizations that pay salaries as salaries, allowances, emoluments and salaries, and if necessary, that provide benefits in kind.

Exemption

- State and local governments and public institutions not having an industrial or commercial character;

- Diplomatic missions, international and inter-organizations;

- Private education and health care businesses;

- Non-profit associations or organizations, subject to full respect for their object;

- The agricultural mutual credit unions operating in accordance with the legal provisions governing them.

Rate

The rate of the tax is set at 3% of the tax base.

Adherents of approved management centres benefit from a reduction of 20% on the amounts and benefits granted to their employees.

 

Table 5: Value Added Tax.

 

 

 

Value Added Tax.

 

Taxable business

· Imports.

. Sales

- Water supply, electricity, gas and telecommunications;

- Instalment sales;

- Delivery of property made pursuant to a commission contract for purchase or sale.

· Construction works. By construction works, is understood:

- All work performed by the various trades involved in the construction, renovation, maintenance and repair of buildings and real estate books;

- Public works;

- The buildings boiler and metal buildings works;

- Demolition/ removal works

- All accessory work or preliminary to construction work.

· The services

- intangible assets concession;

- Business funds management ;

- Leases of personal property;

- Rentals of buildings;

- Mediation and brokerage ;

- Banking operations, insurance and reinsurance;

- The contract work not covered by the acts of production;

- The maintenance and repair of furniture;

- Sales for consumption on the premises;

-the operations of tourism, hospitality and catering;

- Activities of shows and entertainment;

- Transport operations;

- Operations carried out by the liberal professions.

Exemptions

· Transactions by taxpayers under the contribution of the informal sector;

· Sales by farmers, growers, ranchers and fishermen unprocessed products of their culture, their livestock or their fisheries;

·         the entries in a warehouse following a suspensive customs procedure subject to actual exports of the goods involved.

· Direct exports of goods, services, assimilated to exports and re-exports following suspensive customs procedure. The following are also treated as exports:

-ground transportation for the part carried out abroad when benefits are made from Burkina Faso to abroad;

- Warehouse entries following a suspensive customs procedure subject to actual export of the goods;

- Services related to exports as recognized by law;

· International air transport and international removals by air;

·         the fuelling and provisioning of aircraft abroad;

·         business sales, repair, transformation and maintenance of aircraft for the aviation companies whose services to abroad represent at least 50% of all of the lines they operate;

·         sales, assignments, or performed by the State, local authorities and public institutions that do not have an industrial or commercial character;

· Sales of used goods excluding sales of depreciable property that entitled to deduction made by taxpayers and those by dealers in used goods;

· Sales by the artist of his works of art with the exception of items of jewellery, and articles manufactured by craftsmen and industrial art;

· Imports of goods benefiting from the exemption from customs duties and charges under Article 16. of Regulation No 05/1999 / CM / UEMOA of 06/08/1999 concerning customs value of goods and personal effects recognized as such by the customs services;

·         dividends, interest arrears, income and other products of the shares of any kind and of founders of companies, etc., referred to in article 65. of the registration code of the stamp and the tax on the income of securities;

· Imports and sales of unprocessed fresh and frozen food products for consumption, including meat and fish;

·         other goods and exempt services

Rate

18 %

0% for imports of goods