Chad: Business Environment

Accounting Rules

Tax Year: The tax year is the calendar year.
Accounting Standards: IFRS Standards are required for all listed companies and companies making a public call for capital. Companies with more than 100 shareholders are required to use IFRS Standards, even if their securities do not trade in a public market (according to OHADA's Uniform Act Relating to Commercial Companies and the Economic Interest Group). Chad does not apply IFRS for SMEs standards.
Accounting Regulation Bodies: Organisation for the Harmonisation of Business Law in Africa (OHADA)
Accounting Reports: According to art. 8 of the Accounting Act of the Organisation for the Harmonization of Corporate Law in Africa (OHADA), companies must publish a balance sheet, a profit and loss account, a statement of cash flows and notes to the financial statements. All listed companies and companies making a public call for capital must use IFRS standards for their financial statements.
Publication Requirements: Annual financial statements include the Balance Sheet, the Income Statement, and Cash Flows statement, as well as the Notes to the financial statements. According to art. 23 of the OHADA's Uniform Act on the organization and harmonization of corporate accounting, annual financial statements shall be adopted no later than within four months following the closing of the fiscal year.
Professional Accountancy Bodies: Ordre National des Professionnels Comptables du Tchad (ONPCT)
Certification and Auditing: According to art. 8 of the Uniform Act on Commercial Companies of the Organisation for the Harmonization of Corporate Law in Africa (OHADA), private limited companies that meet, at the end of the fiscal year, two of following conditions are required to appoint at least one auditor: the total amount of the balance sheet is greater than XAF 125 million; the annual turnover is greater than XAF 250 million; the number of permanent staff exceeds fifty people. For private limited companies that do not meet these criteria, the appointment of an auditor is optional. Nevertheless, such an appointment maybe requested in court by one or more members holding at least one-tenth of the stated capital.
In public limited companies, supervision is exercised by one or more auditors.
Accounting News

Tax Rates

Consumption Taxes

Nature of the Tax: Value Added Tax (VAT) - Taxe sur la valeur ajoutée (Local name)
Tax Rate: 18% (standard rate)
Reduced Tax Rate: A 9% reduced VAT rate applies to certain products, when produced locally (e.g. cement, sugar, oil and soap, and products of the local food industry, excluding alcohol).
Exports and their related international transportations are zero-rated. The law also provides for several exemptions, such as: sales of products that are directly made by farmers, cattle farmers, or fishermen to consumers, farming, and fishing operations; import operations and sales of newspapers and periodicals; sales of gasoil and petrol by the refining company of N’Djamena; leasing transactions, potable water, interests remunerating external loans; gambling and games of amusement; equipment and products used for the fight against HIV AIDS, malaria, tuberculosis, yellow fever, or COVID-19; interest on property loans granted by financial institutions; etc.
Other Consumption Taxes: Excise duty rates vary according to the nature of the goods, ranging from 5% to 25% of the value. They apply to several products, including cigarettes, water, beer, wine, cosmetics, and luxury goods.
A special tax applies on oil products. A fee is levied on airplane tickets for the modernisation of airport infrastructures (XAF 10,000 for economy seats, XAF 15,000 for intermediary or business class).
A levy of 0.2% applies on imports out of the African area on behalf of the African Union.
A tax applies on money transfers (not applicable to bank transfers and transfers for the settlement of taxes, duties and levies) at a rate of 0.2%. The rate is 5% for cash withdrawals made on stored communication credit.

Corporate Taxes

Company Tax
Tax Rate For Foreign Companies: Only profits generated in Chad are subject to corporate tax.
Unless a tax treaty is into force, the profits realised by branches of foreign companies are deemed distributed in respect of each fiscal year to the persons who do not have their tax residence in Chad and so are subject to withholding tax at the rate of 20%.
Withholding tax on income of non-residents is 25%, applying to income of any legal or natural person who is not resident in the CEMAC area (i.e. Cameroon, Central African Republic, Chad, Gabon, Equatorial Guinea, Republic of Congo). The income of companies whose tax residence is in the CEMAC area is subject to 7,5% WHT.
Capital Gains Taxation: Capital gains are taxed at 20%.
Main Allowable Deductions and Tax Credits: Certain expenses are deductible, including interest paid for the depositing of funds by a shareholder within the base rate of the central bank plus two points (calculated on the basis of the share capital). If duly justified, donations and liberalities are deductible up to a maximum of 0.5% of the annual turnover, net of tax. Provisions for credit customers are deductible if judicial actions have been taken against the debtor. Fines, penalties and taxes are generally not deductible. Restaurants, hotels, receptions, and related costs are deductible up to 0.5% of the turnover.
Local social security contributions are fully deductible, whereas foreign social security contributions are deductible only within 15% of the base salary of the expatriates when related to a compulsory retirement plan.
Losses arising from normal business activities can be carried forward for up to three years, whereas the carryback of losses is not allowed.
Other Corporate Taxes: A business licence tax is paid annually by any individual or company carrying on a trade, industry, or profession in Chad. Companies in their first year of activity are exempt; for other companies the base of assessment is a determined duty based on 0.35% of turnover of the fiscal year N-2.
Employers are required to make monthly contributions of 16.5% of salaries paid to their employees (capped at XAF 82,500 per month) to Social Security Funds. Contributions for the National Professional Training Funds represent 1.2% of salaries and fringe benefits.
Certain deeds are subject to registration duties, with rates varying between 0.25% and 15%. Several stamp duties also apply.
The transfer of ownership of estates, personal property, and real property is subject to a transfer tax (rates of 3%/5%/6%/10%).
Owners or tenants occupying a building must pay an accommodation tax.
A real property tax is levied at 10% in N’Djamena and 8% elsewhere for built properties, with the rates going up to 21% and 20%, respectively, for unbuilt properties (calculated on the potential revenue of the property - exemptions apply).
Other Domestic Resources: Directorate-General for Taxation; Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

	Chad	Sub-Saharan Africa	United States	Germany
Number of Payments of Taxes per Year	54.0	36.6	10.6	9.0
Time Taken For Administrative Formalities (Hours)	834.0	284.8	175.0	218.0
Total Share of Taxes (% of Profit)	63.5	47.3	36.6	48.8

Source: Doing Business - Latest available data.

Individual Taxes

Tax Rate

Personal income tax (work incomes)	Progressive rates from 0% to 30%
From XAF 0 to XAF 800,000	0%
From XAF 800,001 to XAF 2,500,000	10%
From XAF 2,500,001 to XAF 7,500,000	20%
Above XAF 7,500,000	30%
Capital gains, dividends and income from shares	20%
Rental incomes	15% for residents 20% for non-residents

Allowable Deductions and Tax Credits: Certain charges are deductible from total income, including: interest on loans and debts incurred for real estate investment, arrears of compulsory or free annuities paid, alimony paid for separation or divorce, insurance premiums (under certain conditions).
The social security contributions paid by the employee are deductible, as well as those paid by the employer (capped at 2% of the employee's gross salary).
Losses arising from an individual's normal business activities are deductible and may be carried forward for up to three years, while the carryback of losses is not permitted.
Special Expatriate Tax Regime: An individual with residence in Chad is subject to personal income tax on worldwide income. A non-resident individual in Chad is subject to personal income tax on the income originated from activities in Chad.
An individual is considered resident in Chad for taxation purposes if he/she has a main residence in Chad or is present in Chad for at least 183 days in the relevant calendar year.
Withholding tax on income of non-residents is 25%, applying to income of any legal or natural person who is not resident in the CEMAC area. The income of cnatural persons whose tax residence is in the CEMAC area is subject to WHT at the rate of 20%.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: See the list of Tax conventions signed by Chad.
Withholding Taxes: Dividends: 20%; Interest: 0 (residents)/20% (CEMAC residents)/25% (CEMAC non-residents); Royalties: 20% (residents)/7.5% (CEMAC residents)/25% (CEMAC non-residents)

Sources of Fiscal Information

Tax Authorities: Overview of Chad's tax measures in response to Covid-19
Directorate-General for Taxation
Other Domestic Resources: Ministry of Finance

Intellectual Property

Regional Organisations: Chad is a member of WIPO and of the African Intellectual Property Organization (OAPI)

Legal Framework

Independence of Justice: Although the constitution and law provide for an independent judiciary, the rule of law and judicial system remain weak as the executive power still heavily influences the courts. Furthermore, judicial authorities do not always respect court orders. According to Freedom House, security forces often do not respect constitutional protections regarding search, seizure, and detention.
Equal Treatment of Nationals and Foreigners: Foreigners cannot always expect an equal treatment. However, according to the US Bureau of Economic and Business Affairs, foreign investors using the court system are not generally subject to executive interference.
The Language of Justice: French
Recourse to an Interpreter: It is possible to have an interpreter in Chad.
Sources of the Law and Legal Similarities: Chad has a mixed legal system of civil and customary law. The main sources of the law are the Constitution, international treaties, acts of the Parliament (with a distinction between matters for which the Parliament can set the actual rules and those for which it only determines the fundamental principles that are subsequently complemented by rules and regulations taken by the executive branch), rules and regulations of the executive branch, ordinances of the government, and customary law (applicable in communities that recognize them, provided that they are not in contrast with the law).
Checking National Laws Online: Library of the U.S. Congress
Droit Afrique - Chad

Standards

National Standards Organisations: N/A
Integration in the International Standards Network: Chad does not have a legal framework for standards and technical regulations and is not a member of ISO.
Chad is a member of CEMACMET.
Classification of Standards: TCD
Online Consultation of Standards: ISO website - Chad standards consultation.
Certification Organisations: N/A

Business Practices

General Information
Opening Hours and Days: Offices: Monday to Friday 8am-1pm and 2pm-5pm
Banks: Monay to Thursday 7am-1pm; Friday 7am-10.30am

Public Holidays

New Year's Day	1 Jan
Easter Monday	22 Apr
Labour Day	1 May
Aïd el-Fitr	4 Jun
Independence Day	11 Aug
Aïd el-Kebir	11 Aug
Independence Day Holiday	12 Aug
Aïd el-Kebir Holiday	12 Aug
All Saints' Day	01 Nov
Prophet Muhammad's Birthday	09 Nov
Republic Day	28 Nov
Freedom and Democracy Day	1 Dec
Freedom and Democracy Holiday	2 Dec
Christmas Day	25 Dec

Holiday Compensation: If New Year's Day, Labour Day, Independence Day or Freedom and Democracy Day happen on Sundays, the following Monday is considered as paid holiday (Decree 97-413 1997-09-30 PR/MFPT of 1997).

Periods When Companies Usually Close

Christmas time	December
Aïd el-Fitr and Aïd el-Kebir	May vary according to lunar calendar
Ramadan	During Ramadan working hours are reduced

Any Comment About This Content? Report It to Us.