Burkina Faso: Business Environment

Company Tax

27.5%

Tax Rate For Foreign Companies

A resident corporation is subject to tax on income from movable capital on a worldwide basis. Other types of taxable income are taxed at source. Non-residents are taxed only on Burkina Faso-source income.
An entity incorporated in Burkina Faso is considered resident for tax purposes.
The Burkina Faso-source income of branches of foreign companies is subject to a branch withholding tax rate of 12.5%. The taxable base applies to 75% of the annual income of the branch.

Capital Gains Taxation

Capital gains arising from the disposal of fixed assets and shares normally are included in taxable income, but only at half of the total amount. Capital gains resulting from mergers for companies and asset contributions are exempt from corporate income tax. Capital gains derived from the sale of mining licenses are taxed at a rate of 20%.
Gains from the sale of real properties are taxed separately at a rate of 10%.

Main Allowable Deductions and Tax Credits

Business costs and expenses are deductible if they are strictly related to the business. Losses may be carried forward four years following the year of the losses.
The deduction of royalties paid to related parties for licenses, patents, trademarks, manufacturing processes or formulas, and other similar rights is limited to 3.5% of turnover (excluding VAT) from goods or services, the production or marketing of which gives rise to the royalty fees.
Provisions are only deductible when the company demonstrates that the asset has become entirely unrecoverable. Self-insurance provisions made by a company are non-deductible, same as for the provision for paid leave and for retirement pay. Head office costs are deductible up to 10% of the overheads from the taxable profit. Furthermore, payments made in foreign countries are deductible within the dual limit of 5% of the turnover excluding taxes and 20% of the overheads of the paying company, providing they correspond to actual operations.

Other Corporate Taxes

Other corporate taxes include: stamp duties for administrative acts (at a fixed or variable rate according to the type of document), a business transfer tax at 10%, a real property tax at 0.1% of the taxable amount, a business license duty, a real estate transfer tax at 8%.
Social security contributions paid by the employer amount to 16% of salaries paid (3.5% for occupational accident contribution; 7% for family allowance; and 5.5% for old age pension). The contribution may not exceed XOF 33,000/month. The contribution is paid to the national social security fund every month by companies with at least 20 employees, or quarterly in other cases.

Other Domestic Resources

Directorate-General for Taxation, in French

Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

Several deductions are provided, including transport allowances, family allowances, civil and military pensions and severance pay.
The amount due is reduced as follows:
- 8% in case of one dependent
- 10% in case of two dependents
- 12% in case of three dependents
- 14% in case of four dependents.

Individuals above the age of 60 who receive a pension are exempted from residence tax.

Special Expatriate Tax Regime

Residents are taxable on a worldwide basis, whereas non-residents are subject to tax on Burkina Faso-source employment income provided the activities are carried out in Burkina Faso and the employer is located in the country.