Central African RepublicTax Obligations Detailed

In the Central African Republic, employers face various tax obligations, including social security contributions, corporate taxes, and value-added tax (VAT), among others.

Employer Tax Obligations in Central African Republic

As of today, February 5, 2025, employers in the Central African Republic have the following tax obligations:

Social Security Contributions

• Employee Contribution: 3% of the employee's gross monthly salary. The minimum monthly earnings used to calculate contributions are the legal monthly minimum wage of 35,000 CFA francs, while the maximum is 600,000 CFA francs.
• Employer Contribution: 4% of the employee's gross monthly salary. This also applies to the same minimum and maximum earning thresholds. Employers with at least 20 employees contribute monthly, while those with 1 to 19 employees contribute quarterly.
• Family Allowances: 12% of the employee's gross monthly covered earnings up to 600,000 CFA francs or 7,200,000 CFA francs annually. The employee does not make family allowance contributions.
• Work-related injury and illness insurance: Employers contribute to this insurance through the ONSS. However, the specific rate is not defined in the provided source and further investigation is required for accurate information.

Corporate Income Tax (CIT)

• Standard Rate: 30% of taxable income, calculated based on financial statements prepared according to OHADA standards.
• Agricultural Businesses: 3% of taxable income, but not less than 300,000 XAF unless exonerated. Minimum tax for all businesses is 1.85% of their turnover but not less than 1,850,000 XAF.
• Payment Schedule: Payable in three installments the following year:
  • 40% by March 31
  • 30% by June 30
  • Remaining balance by September 30

Value Added Tax (VAT)

• Standard Rate: 19% on most goods and services.
• Reduced Rate: 5% on specific goods such as wheat, flour, milk, frozen fish, and refined oils.
• Zero-Rated: Exports and international services.
• Filing Frequency: Monthly VAT returns are required.

Other Taxes and Obligations

• Minimum Tax: All businesses are subject to a minimum tax of 1.85% of turnover, but no less than 1,850,000 XAF unless specifically exonerated. Agricultural businesses have a minimum tax of 3% but no less than 300,000 XAF unless exonerated.
• Withholding Tax: 15% on royalties, technical management services, dividends, and interest paid to residents and non-residents.
• Payroll Tax: This is generally understood as the combined taxes withheld from an employee's salary, encompassing income tax and social security contributions.

General Information

• Registration: Employers must register with the Office National de Sécurité Sociale (ONSS) for social security and obtain a tax identification number (NIF) from the Direction Générale des Impôts et des Domaines (DGID). They are also required to register their employees with the CNSS and declare their hiring to the Regional Directorate of Employment.
• Tax Year: January 1 to December 31.
• Currency: Central African CFA franc (XAF).
• Statute of Limitations: Four years following the year in which the CIT was due.
• Tax Treaties: The Central African Republic has tax treaties with various countries to avoid double taxation. It is important to check for specific treaties that may apply and impact withholding tax rates.

This information is for general guidance only, and employers should consult with a local tax advisor for specific advice related to their situation. Tax laws and regulations can change, and it's crucial to stay updated on the latest requirements. This response is current as of February 5, 2025.

In the Central African Republic, employee tax deductions encompass various areas, including income tax, social security contributions, and other potential deductions.

Income Tax (PIT)

The Personal Income Tax (PIT) in the Central African Republic affects individuals with worldwide income who are tax residents. Tax residency is established if the individual has their primary residence in CAR, their principal stay is in CAR even without a permanent home, CAR is their primary place of business, or their income originates from CAR.

• Taxable Income: Calculated as the difference between gross income and deductible expenses, including gains or losses on professional assets.
• Deductions:
  • Professional expenses: 30% of gross salary (after social security deductions).
  • Abatement of XAF 600,000 for loan interest and retirement savings.
• Benefits in Kind: Taxable and valued as a percentage of their value (e.g., Accommodation - 10%, Domestic Servants - 5% per person, Utilities - 3%, Food - 25% per person (capped at XAF 60,000), Car - 10% (private trips 1% per person annually)).
• Tax Rates: Progressive rates (details were unavailable in the sources, I would advise further research to determine the most current and accurate rates for 2025).

Social Security Contributions

Both employers and employees contribute to the social security system.

• Family Allowances: 12% of the employee's salary, including benefits in kind (capped at XAF 600,000 monthly or XAF 7,200,000 annually).
• Professional Risks: 3% of the employee's salary.

Employer Obligations

Employers have certain responsibilities related to employee taxation.

• Withholding: Deduct PIT and social security contributions from employee salaries.
• Remittance: Transfer withheld amounts to the relevant authorities.
• Annual Reporting: File an annual statement of salaries, remuneration, commissions, dividends distributed, and service provider payments. Include commissions, brokerage fees, commercial or other rebates, vacations, and fees paid to third parties. Provide a separate statement for services rendered.

Employee Obligations

• Annual Return: Individuals must file an annual tax return including all received remuneration.

Additional Information:

• Tax Year: The fiscal year in the Central African Republic runs from January 1st to December 31st.
• Currency: Central African CFA franc (XAF)

Keep in mind that tax laws and regulations are subject to change. While this information is believed to be current as of today, February 5, 2025, it's always advisable to verify the latest regulations with official sources or a tax professional.

In the Central African Republic, the Value Added Tax (VAT) is a consumption tax levied on most goods and services.

VAT Rates

• Standard Rate: 19% This is the general rate applied to most goods and services.
• Reduced Rate: 5% Applies to essential goods such as basic foodstuffs (like imported meat, milk, vegetables), books, and certain agricultural products.
• Zero Rate: 0% Applies to exports and international transportation services.
• Exempt: Certain goods and services are entirely exempt from VAT, including basic foodstuffs (locally sourced), medical services, immovable property, public post services, charities, newspapers, and specific financial services. Sales of gold and diamonds are also VAT-exempt.

VAT Registration

While specific turnover thresholds for mandatory VAT registration aren't available in the provided sources, businesses and individuals carrying out taxable activities are generally subject to VAT. Companies exceeding a certain turnover (the exact figure is unavailable) might face additional requirements, such as appointing a resident representative responsible for VAT payment.

Filing and Payment

• Taxpayers must obtain a Taxpayer Identification Number (NIF) from the Direction Générale des Impôts et des Domaines. This was previously obtained at a one-stop shop prior to 2012.
• VAT returns and payments are typically filed monthly.
• Information on remote declaration and payment systems is available, with some larger companies and NGOs utilizing these platforms.

Other Taxes

Besides VAT, other taxes applicable in the Central African Republic include:

• Municipal Service Tax (ISS): Ranges from 2% to 5% and is cumulative.

Additional Considerations

• Pre-Shipment Inspection (PSI) is required for goods with a FOB value equal to or exceeding XAF 500,000 (or any FCL container), except for items such as precious stones and metals. The PSI is managed by Bureau Veritas BIVAC and covers quality, quantity, and customs valuation. A Déclaration d'Importation Commerciale (DIC) is required for imports subject to PSI.
• There is a program for the pre-verification of conformity of imported goods. Shipments below USD 1,500 (commercial) or USD 3,000 (personal) FOB are excluded.
• UN agencies are exempt from import verification and DIC requirements.
• Roughly 80% of imports transit through the port of Douala, Cameroon, and are exempt from Cameroonian customs duties and VAT if proof of arrival in CAR is provided.

Note: This overview is current as of February 5, 2025, and might change. It's essential to consult official government resources or tax professionals for the latest regulations.

The Central African Republic offers various tax incentives to attract investment and stimulate economic growth, focusing primarily on sectors like industry, mining, agriculture, and forestry.

General Tax Incentives

• Corporate Income Tax (CIT) Reduction: A 25% CIT reduction is available for enterprises in real estate, industrial, agricultural, forestry, mining, tourism, and other industries. For existing companies, the minimum investment required is 1 million XAF for most sectors and 5 million XAF for agriculture.
• Business License Exemption: Newly incorporated companies are exempt from the business license fee for the incorporation year and the following two years.
• CIT Exemption for New Businesses: Newly formed companies in industrial, agricultural, forestry, mining, tourism, and other industries may benefit from a CIT exemption for up to five years.
• Capital Gains Exemption: Capital gains are exempt from CIT if reinvested within three years.
• Tax Incentives for Large Investments: Further incentives are available for investments over 100 million XAF in inland regions and over 250 million XAF in specific sectors such as industry, tourism, energy, water, ICT, sports, and transport.

Incentives for New Companies

• Business Tax Exemption: Newly registered companies are exempt from business tax for their first five calendar years.
• Reduced Registration Duties: A 50% reduction applies to registration duties for company creation, capital increases, mergers, and share sales.
• Exemption from Minimum Tax and CIT: Under certain conditions based on location, nature, and investment amount, businesses can be exempt from the minimum tax and CIT. The minimum eligible investment amount is generally 60 million XAF.
• Deduction from Tax Base: A 40% deduction from the tax base for CIT and Personal Income Tax (PIT) may be available.

Other Tax Considerations

• VAT: The standard Value Added Tax (VAT) rate in the Central African Republic is 19%. However, the government is continually evaluating its tax policies, and changes may occur. As of today, February 5, 2025, this rate remains in effect, but future adjustments are possible.
• Customs Duties: While specific details aren't available within the given sources, it's known that the CAR applies customs duties on imported goods. It's recommended to consult with local authorities or customs experts for the most up-to-date information on current rates and exemptions.
• Application Procedures: The process of applying for tax incentives can vary depending on the specific incentive. While some are automatically granted if conditions are met, others require formal applications. Consulting with a tax professional or the relevant government agencies is essential to ensure compliance with application procedures.

It's important to note that tax regulations and incentives can change. Consulting with a tax advisor or the Central African Republic tax authorities directly for the most up-to-date information and specific guidance tailored to your situation is recommended.