Benefits related to specific sectors
STRUCTURING PROJECTS REGIME
A special tax regime has been instituted for structuring projects implemented by Small and medium-Sized Enterprises (SMEs).
Major enterprises are those whose turnover is more than or equal to 1 billion CFA Francs.
Small and medium-Sized Enterprises (SMEs) are those whose turnover is less than 1 billion CFA Francs.
Scope of Application:
Social Housing sector
Major Enterprises Regime
I.1. Conditions of Eligibility
To be eligible for the specific tax regime of structuring projects, Major Enterprises must fulfil all of the following conditions:
Be an economic and social development pole
Be job generating
Entail investments of at least 5 (five) billion CFA Francs
Fall within the agriculture, industry, energy, tourism and social housing sectors
The conditions mentioned above shall be specified by regulations.
I.2. Tax Benefits
Major Enterprises eligible for the special structuring projects regime shall be granted the following tax benefits:
Exemption from payment of the business licence tax during the first two years of operation
Fixed registration fees of 50,000 CFA Francs for instruments of incorporation, extension and increase of share capital and transfers of real estate which directly concern the establishment of the project
Exemption from payment of the VAT on local purchases of construction material and on imports intended for the project
Application of an accelerated depreciation rate of 1.25% of the normal rate for specific fixed assets acquired during the installation phase
Extension of the carry over period for deficits from 4 to 5 years
II. Small and Medium-Sized Enterprises Regime
All conditions and benefits referred to above equally apply to Small and Medium-Sized Enterprises, except that the amount of investments must be at least 500 million CFA Francs.
TAX REGIME FOR PUBLIC SERVICE CONCESSIONS
In accordance with the provisions of articles 248 and 261 of the General Tax Code, companies authorized to carry out public service benefit from tax arrangements in determining their taxable products and deductible charges.
In fact, the assessment of taxable products and the deduction of operating charges is done in accordance with the accounting plan applicable to public service concessions.
1. Regime for Taxable Products
Taxable products of licensed companies are determined as follows:
Termination penalty paid by the licensee to the license holder is considered taxable products only in as much as it is not a repayment of expenses or investment
Deficiency subsidies as well as operating and working capital subsidies are taxable under conditions defined by common law.
2. Rules Peculiar to charges
For public service licensed companies, charges payable may be transferred temporarily into an account for fixed charges to the tune of the surplus where, during the first 3 financial years, they are in excess of production sold.
As from the 4th year, the fixed charges payable may be considered as depreciation over the next six financial years.
The concession holder may, over a period of 10 years or during the concession period, where such duration is less than ten years, pay entry fees, if need be, to the conceding authority.
The concession holder may equally deduct from his taxable profits, a lapse amortization for renewable depreciable property conceded by the concession holder. Such must be returned for free to the conceding authority at the end of the concession.
However, the amortization of temporarily fixed charges may not benefit from the tax regime for deferred amortizations during a deficit period.
Besides, during the concession period, where the concession holder is bound to carry out a new investment or restructuring programme involving huge expenditures, he may benefit from this regime upon presentation of a file to the tax administration including agreements between him and the conceding authority and defining in a detailed manner the nature and amount of investments as well as the expenditures considered in order to be eligible.