Senegal flag Senegal: Business Environment

Tax rates in Senegal

Tax Rates

Consumption Taxes

Nature of the Tax
Value Added Tax (VAT)
Tax Rate
18%
Reduced Tax Rate
The reduced rate is 10% and only applies to tourism services. A 17% special tax rate applies to financial activities (replacing the VAT).
Other Consumption Taxes
Excise taxes exist on beverages (50% for beverages containing alcohol plus an additional tax ranging from XOF 1,500 to XOF 5,000 per litre, and 5% for sparkling beverages), tobacco (65%), coffee (5%), tea (5%), fat (rate varies from 10% to 15%), private cars with a horsepower higher than 13CV (10%), cosmetic products (15%), oil products, plastic bags (XOF 300 per kg).
Owners of motor vehicles (car, truck, or motorbike) must pay an annual tax of XOF 1,000 per hectolitre. Companies owning or renting vehicles for more than 15 days a year are liable to an annual tax with rates ranging from XOF 50,000 to XOF 200,000.
Imports are subject to customs duties, as well as to: a statistical import charge of 1%; a community solidarity levy of 0.8%; the Economic Community of West African States (ECOWAS) levy of 0.5% (only applicable to products originating from non-ECOWAS countries; and the Senegalese Shippers Council (COSEC) royalty of 0.4% (only applicable on importation by sea).
Industrial operators are subject to an Industry Energy Tax at the rate of 2.5%, applied to the pre-tax price of electricity consumed.
An export duty of 4% applies on the customs value of non-monetary gold.
 
Find out more about Taxes and Accounting in Senegal on GlobalTrade.net, the Directory for International Trade Service Providers.
 

Return to top

Corporate Taxes

Company Tax
30%
Tax Rate For Foreign Companies
Resident entities are taxed upon their worldwide income, whereas non-residents are generally taxed via the existence of a permanent establishment (determined in accordance with OECD's standards).
Companies are considered Senegalese residents if they have a registered fixed establishment.
As a general rule, branches are taxed in a similar way to that of corporate income. Nonetheless, a 10% duty is automatically applied to profits generated after corporate income tax (automatic application of the 10% tax on payment on dividends).
Capital Gains Taxation
Capital gains are considered business income and taxed at the ordinary corporate tax rate of 30%. Sales of stocks by a non-resident are also subject to a 30% rate.
Main Allowable Deductions and Tax Credits
Depreciation of tangible and intangible assets is tax-deductible. On the other hand, their rates are not set forth by the Senegalese tax code, but rather are calculated according to the potential obsolescence of assets. Goodwill cannot be amortised for tax purposes.
Start-up expenses can be deducted if they are justified and approved by the shareholders.
Interest charges may be deducted under certain conditions: the interest rate may not exceed the rate of advance of the Institute of Emissions plus 3 points, the share capital is fully paid and the amount of the loan or advance shall not exceed the share capital of the company which receives it.
Bad debts are not tax-deductible, the same as fines and penalties. Donations to recognised charities may be deductible up to 0.5% of turnover. Donations to the COVID-19 Response Fund are also tax-deductible.
Tax losses can be carried forward for up to three years. Losses from asset depreciation can be carried forward indefinitely. The carryback of losses is not permitted.
Reasonable royalties, interest, and management service fees paid to foreign parent companies are generally deductible, provided they are documented.
Other Corporate Taxes
The tax on the built property is levied at a rate of 5% (of the rental value) for buildings other than factories. If the properties listed in the balance sheet, companies are not liable to the tax. The tax on unbuilt land is 5% of the rental value of the land.
Stamp and registration fees are levied on many commercial transactions at rates varying between 1% and 5% of the relevant act.
Employers are subject to a 3% payroll tax (on gross wage). In addition to this payroll tax, employer contributions amount to 7% of salary for family benefits (capped at XOF 63,000 per month) and 1%, 3% or 5% for work-related accidents (capped at XOF 63,000 per month), 8.4% for old-age pensions (capped at XOF 360,000 per month) and 3.6% for supplementary old-age pension insurance (for executive employees, capped at XOF 1.08 million per month). Contributions for health insurance amount to 15% of salary, up to XOF 250,000.
The Local Economic Contribution is payable by any person carrying on a trade or an industry and consists of two different taxes: the company’s properties contribution (15% for leases premises and 20% for owned premises, lands, and installations, calculated on the 7% of the cost price), and the company value-added contribution (1% on the added value produced in the previous year, capped at 70% of turnover).
The tax on telecommunication services is 5%. Insurance companies must pay a levy on 1% of their turnover. Companies owning or renting vehicles are subject to a tax ranging from XOF 50,000 to XOF 200,000, depending on the type and horsepower of the vehicle.
Industrial operators are subject to an Industry Energy Tax at the rate of 2.5%, applied to the pre-tax price of electricity consumed.
An export duty of 4% applies on the customs value of non-monetary gold.
Other Domestic Resources
General Tax Directorate
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Senegal Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 53.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 416.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 44.8 47.3 36.6 48.8

Source: Doing Business, Latest available data.

Return to top

Individual Taxes

Tax Rate

Individual income tax Progressive rate from 0 to 40%
CFA 0 - 630,000 0%
CFA 630,001 - 1,500,000 20%
CFA 1,500,001 - 4,000,000 30%
CFA 4,000,001 - 8,000,000 35%
CFA 8,000,001 - 13,500,000 37%
Above CFA 13,500,000 40%
Minimum personal income tax (MPIT) (for employees)
CFA 0 - 599,999 CFA 900
CFA 600,000 - 999,999 CFA 3,600
CFA 1,000,000 - 1,999,999 CFA 4,800
CFA 2,000,000 - 6,999,999 CFA 12,000
CFA 7,000,000 - 11,999,999 CFA 18,000
CFA 12,000,000 and above CFA 36,000
Allowable Deductions and Tax Credits
Different abatements and allowable deductions apply to each category of income. By splitting one's income into shares (personal allowances), the taxpayer benefits from the progressive rates for each share.
Certain incomes are not subject to personal income tax, including: severance and retirement allowance; the statutory travel allowance; one trip per year to one’s home country for expatriates and their dependent family; lump-sum for reimbursements of documented professional expenses.
A lump-sum deduction of 30% of earnings is available when determining the taxable base for employment income tax purposes, capped at XOF 900,000.
Donations to the COVID-19 Response Fund are also tax deductible.
Special Expatriate Tax Regime
Senegalese tax residents are taxable on their worldwide income. However, salary income is taxable in Senegal, provided that the work is performed in the country or the employer is established there.
There is no special expatriate tax regime.

Return to top

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of double tax treaties signed by Senegal and applicable withholding tax rates
Withholding Taxes
Dividends: 10%; Interest: 8% (on deposits or guaranteed interest on accounts with a bank)/13% (on bond interest)/16%; Royalties: 20%
Bilateral Agreement
The United Kingdom and Senegal are bound by a double-taxation treaty.
The 2015 treaty provides for withholding tax rates of 5-15% on dividends, 10% on interest and 10% on royalties (on 100% or 60% of the gross amount, depending on the condition).

Return to top

Find out more about Taxes and Accounting in Senegal on GlobalTrade.net, the Directory for International Trade Service Providers.

Return to top

Any Comment About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Latest Update: April 2022

Return to top