ComorosTax Obligations Detailed

In Comoros, employers face specific tax obligations and legal considerations regarding payroll and employee management.

Employer Taxes

• Corporate Income Tax (CIT): The standard corporate income tax rate in Comoros is 35%. Certain investment incentives can reduce this rate to 10% for the first five years and 15% for the following ten years. A minimum lump-sum tax of 1.5% of the previous year's turnover also applies.
• Withholding Tax: A 10% withholding tax applies to dividends, interest, and royalties paid to non-residents. This rate can be reduced by double tax agreements. A 15% non-final withholding tax applies to payments to Comorian companies for rights to natural resources.
• Social Security Contributions: Both employers and employees contribute 2.5% of the employee's gross monthly salary to the National Social Security Fund (CNSPS).
• Payroll Tax: There is no separate payroll tax in Comoros.
• VAT: While not directly an employer tax, businesses should be aware that there is no Value Added Tax (VAT) in Comoros.

Employee Taxes

• Income Tax: Comoros has a progressive income tax system for resident individuals, with rates ranging from 5% to 30% based on income brackets.
• Social Security Contributions: As mentioned above, employees contribute 2.5% of their gross monthly salary to the CNSPS.

Other Tax Considerations

• Transfer Pricing: Transactions between related parties (resident and non-resident) must adhere to arm's length principles.
• Interest Deductibility: Interest on shareholder loans exceeding their contributions is deductible only up to the Central Bank interest rate plus two percentage points, provided the company's capital is fully paid up. The deductible interest cannot exceed 15% of gross operating profits. This restriction doesn't apply to banks and financial institutions.
• Loss Carryforward: Losses can be carried forward for three years.
• Tax Incentives: Generous tax incentives are available for investments exceeding KMF 10 billion in priority sectors, including reduced CIT rates, unlimited loss carryforward, and exemptions from customs duties.

Payroll and Employment

• Employment Contracts: While no specific format is required by law, it's best practice to create a written contract in a language understood by both parties, outlining the terms of employment.
• Probationary Period: The maximum probationary period is six months.
• Paid Time Off: Employees are generally entitled to 22 days of paid annual leave.
• Sick Leave: Employees can take up to six months of sick leave with a medical certificate.

Additional Information

• The official currency is the Comorian franc (KMF).
• The primary economic sectors are agriculture, fishing, and forestry.
• There are no exchange control restrictions, but all taxes must be settled before repatriating funds.

This information is current as of February 5, 2025, and may be subject to change. Consulting with a local tax advisor is always recommended for the most up-to-date information and specific guidance.

Employee tax deductions in Comoros are governed by the country's labor laws and tax regulations, which are subject to change. As of February 5, 2025, the available information on Comorian tax deductions for employees is limited. However, some general principles and potential deductions can be outlined based on common practices and available information regarding other countries and regions, with the caveat that specifics for Comoros require further localized research.

Income Tax

• General Income Tax: Comoros, like most countries, likely has a general income tax system where employees pay a percentage of their earnings to the government. The specific rates and brackets are not readily available and require further research specific to Comoros.

Social Security and Healthcare Contributions

• Social Security: It's common for countries to have social security contributions deducted from employee salaries to fund retirement, disability, and other social welfare programs. Specific contribution amounts and details for Comoros aren't easily accessible and necessitate targeted inquiry.

• Healthcare: Healthcare contributions are another typical deduction, often funding a national healthcare system or providing access to subsidized healthcare. Specific details regarding these contributions in Comoros require further exploration.

Other Potential Deductions

• Union Dues: If an employee belongs to a trade union, union dues may be deducted directly from their wages. The legality and prevalence of this practice in Comoros need to be verified.

• Pension Contributions: Beyond government-mandated social security, some employers might offer private pension schemes where employees can make voluntary contributions via payroll deductions. The specifics of such arrangements within Comoros require further investigation.

• Wage Garnishments and Court Orders: In cases of debt or legal obligations, deductions may be mandated by court order, such as wage garnishments for child support. This requires further understanding of the legal framework of Comoros.

It's important to consult official government resources or seek professional legal and tax advice in Comoros for precise details on employee tax deductions and regulations applicable to the specific situation. This information serves as a general overview and should not be considered definitive tax advice.

In Comoros, businesses face a consumption tax, similar to VAT/GST, levied on imported goods and certain services.

Consumption Tax in Comoros

The consumption tax in Comoros is applied to imported goods and specific services, including production activities and commercial and non-commercial services. It differs from a traditional VAT system and is not applied on the sale of goods within Comoros (except for petroleum, medical services and publishing, which may have different turnover thresholds than other businesses).

Tax Rates

Comoros applies a consumption tax rather than a VAT or GST. This tax is applied at varying rates ranging from 0% to 25% on imported goods and services depending on the product or service and its use. The standard rate on imports appears to be 10%.

Registration Threshold

Businesses operating in Comoros generally must register for consumption tax if their annual turnover exceeds KMF 20 million. Companies primarily engaged in importing with an annual turnover between KMF 15 million and KMF 20 million may also be required to register.

Filing Requirements and Deadlines

Companies registered for consumption tax must file annual tax returns, along with accompanying financial statements. These statements should detail income sources and demonstrate tax compliance.

Exempt Goods and Services

Some goods and services may be exempt from consumption tax. More information on specific exemptions would need to be obtained from the Comorian tax authorities.

Trade Facilitation Agreement (TFA)

Comoros ratified the WTO Trade Facilitation Agreement (TFA). The country has been working on meeting its notification deadlines for the agreement, aiming to streamline trade procedures and reduce costs for businesses engaged in international trade.

Additional Information

Comoros operates a source-based tax system, meaning residents and non-residents are taxed on income derived within the country. No payroll tax exists in Comoros. Property tax is levied at a rate of 9%, while a property registration duty of 2% applies to transfers of immovable property. For companies operating exclusively outside Comoros, no corporate or income taxes are imposed, but individuals may be subject to tax obligations in their country of residence.

Comoros offers tax incentives to attract investment and stimulate economic growth.

Investment Code Incentives

The Investment Code of Comoros provides several incentives, particularly for large investments and job creation.

• Reduced Corporate Income Tax: Investments exceeding KMF 10 billion in priority sectors and creating between 150 and 500 jobs may qualify for a reduced corporate income tax rate. This reduced rate is 10% for the first five years and 15% for the subsequent ten years. Creating at least 350 jobs before the fifth year may further reduce the rate.
• Unlimited Loss Carry Forward: Eligible investments under the code benefit from unlimited loss carry forward.
• Customs Duty and Tax Exemptions/Suspensions: Qualifying investments under the Code may be exempt from or benefit from a suspension of certain customs duties and import taxes on equipment and materials.

Eligibility: Incentives under the Investment Code require prior approval from the Minister in charge of Investments, based on the advice of the National Agency for the Promotion of Investments (ANPI). Specific conditions apply based on investment size, sector, and job creation commitments.

Application: Investors must submit an application to ANPI outlining their proposed investment project, demonstrating how it meets the eligibility criteria for the desired incentives.

General Tax Framework

Outside the specific Investment Code, the general tax framework includes the following:

• Standard Corporate Income Tax Rate: The standard corporate income tax rate is 50%.
• Value Added Tax (VAT): A standard VAT rate of 10% applies to most goods and services.
• Minimum Lump-Sum Tax: A minimum lump-sum tax of 1.5% of the previous year's turnover applies to certain businesses.
• Withholding Tax: A 15% non-final withholding tax applies to dividends paid by Comorian companies and certain natural resource-related rights.
• Tax Registration: All taxpayers must register with the General Tax Administration (AGID) and obtain a professional license (patente).

Double Tax Agreements: Comoros has a Double Taxation Agreement (DTA) in force with the United Arab Emirates, which may reduce withholding tax rates on certain cross-border payments.

Other Licenses/Registrations: Businesses may require additional licenses and registrations depending on their sector of activity. For example, employers must register with the National Solidarity and Social Welfare Fund (CNSPS) for social security.

As of February 5, 2025. Tax laws and regulations can change, so staying up-to-date with the latest legislation is crucial. Consulting with a tax advisor is advisable for accurate and tailored guidance.