Senegal: Business Environment

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 (limited to 15% of the ordinary profits, increased by the depreciation and provisions and the concerned interests).
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 are listed in the balance sheet, companies are not liable for 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 leased 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 of 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.
Export duty of 4% applies to 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.

Tax Rate

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.

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.