GabonTax Obligations Detailed

Employers in Gabon have various tax obligations related to their employees' salaries and benefits.

Employer Obligations

• Personal Income Tax (PIT): Employers must withhold PIT from employees' salaries based on a progressive tax rate ranging from 5% to 35% of the employee's income. The withheld amount should be remitted to the tax authorities by the 15th of the following month. A detailed statement of wages paid to each employee during the previous fiscal year must be submitted to the tax authorities before April 30th.
• Complementary Tax on Salary (TCTS): A 5% TCTS is withheld from salaries and other forms of compensation and remitted to the Public Treasury before the 15th of the following month.
• Social Security Contributions: Employers contribute 20.1% of the employee's gross salary to the National Social Security Fund (CNSS) and the National Disease Insurance and Social Guarantee Fund (CNAMGS). The CNSS has an annual taxable basis ceiling of XAF 18 million, while the CNAMGS has a monthly ceiling of XAF 2.5 million.
• Withholding Tax: A 20% withholding tax applies to payments made to non-resident businesses or individuals, such as dividends, interest, and royalties.

Employee Obligations

• Personal Income Tax (PIT): Employees are subject to PIT based on their income level, with rates ranging from 5% to 35%. Employees must file their personal tax return by March 1st each year.
• Social Security Contributions: Employees contribute 2.5% of their gross salary towards the social security system.

Tax Year and Filing

The tax year in Gabon follows the calendar year. Employers are responsible for calculating, withholding, and remitting PIT, TCTS, and social security contributions to the tax authorities. Payslips should clearly detail all deductions for employee transparency.

Employee tax deductions in Gabon consist of several components, including income tax, social security contributions, and other levies.

Income Tax (IRPP)

• Progressive Rates: Income tax rates are progressive, ranging from 5% to 35%, and determined by income brackets and family status (number of dependents up to six). The tax rate for business income is a flat 30%.
• Tax Year: The tax year is the calendar year.
• Tax Return Deadline: Employers must submit a detailed statement of employee wages for the previous fiscal year by April 30th. Employees should file their individual tax return by March 1st of each year. Married couples can file jointly or separately.

Social Security Contributions

• Employee Contributions: Employees contribute 2.5% for retirement insurance (CNSS) and 1% for health insurance (CNAMGS).
• Employer Contributions: Employers contribute 20.1% of the employee's taxable salary, covering family allowances (8%), retirement (5%), work injury (3%), health sanitary evacuations (0.6%), medicines (2%), and hospitalizations (1.5%).
• Contribution Base: The contribution base is the gross salary up to a ceiling of XAF 18 million annually (XAF 1.5 million monthly). Professional expense allowances, if used appropriately, are excluded.
• Payment: Employers deduct employee contributions from salaries and remit the total contribution (employee and employer portions) to the National Social Security Fund (CNSS) monthly.

Other Taxes and Deductions

• Complementary Tax on Salaries (TCS): 5% of the employment income is deducted as TCS.
• National Housing Fund: A 2% levy is applied to salary for this fund.
• Training Levy: There is a 0.5% levy on salary for training.
• Capital Gains Tax: A final tax of 20% applies to capital gains, payable by April 30th of the following year.
• Professional Expense Deduction: Employees can deduct 20% of their gross salary (after social security deductions) for professional expenses, up to a maximum of XAF 10 million annually.
• Withholding Tax for Foreigners: A 20% withholding tax is applied to remuneration paid to foreigners working in Gabon.

General Information about Gabon Taxes

Gabon's tax system is based on the Central African CFA franc (XAF). Value Added Tax (VAT) is 18% and applies to most goods and services. The tax authority in Gabon is the Directorate General of Taxes and Domains (Direction Générale des Impôts et des Domaines or DGID). Double taxation treaties are in place with several countries to mitigate or eliminate double taxation for international workers and businesses. It is important to consult official government sources or tax professionals for the most up-to-date information on tax regulations, as these are subject to change.

In Gabon, the Value Added Tax (VAT) is a consumption tax applied to most goods and services.

VAT Rates

• Standard Rate: 18% (applies to most transactions)
• Reduced Rate: 10% (specific goods like cement, fishing equipment, and imported meat/poultry)
• Super Reduced Rate: 5% (mineral water, canned goods, and computer hardware)
• Zero Rate: 0% (exports, international transport)
• Exempt: Certain essential goods and services determined by the Gabonese Tax Code are exempt from VAT. Some examples include gambling, financial, medical, construction, educational, and charitable services are exempt. Hydrocarbon activities are also exempt.

VAT Registration

• Mandatory Registration: Businesses with an annual turnover of at least XAF 60 million (approximately USD 100,349 as of 2024) must register for VAT. Forestry companies have a higher threshold of XAF 500 million.
• Voluntary Registration: Businesses below this threshold can register voluntarily.
• Non-Resident Companies: Foreign companies without a permanent establishment in Gabon but conducting VAT-liable transactions must appoint a VAT-registered representative in Gabon.

VAT Filing and Payment

• Monthly Returns: VAT returns and payments are typically due by the 20th of the following month.
• Nil Declarations: If there's no VAT activity in a given month, a nil declaration must be submitted.
• Input VAT Deduction: Businesses can deduct input VAT incurred on purchases related to their business activities, provided they hold a Tax Identification Number (NIF). There are some exceptions for specific expenses, such as those related to housing, accommodation, restaurants, or passenger vehicles with less than ten seats.

Invoicing Requirements

• Invoices must include details such as the business name, dates, product/service descriptions, applicable VAT rate, and total amount due.
• E-invoicing is not currently mandatory but is becoming more common.

Special VAT Regimes

• Real Estate: The standard 18% VAT rate applies to real estate transactions.
• Second-hand Goods: Sales of second-hand goods by non-traders are exempt.

Other Indirect Taxes

• The Special Solidarity Contribution (SSC) is levied on businesses exceeding a certain turnover threshold. Please consult official sources for more information.

Note: This information is current as of February 5, 2025, and may be subject to change. Consult with a tax professional for personalized advice.

Gabon offers various tax incentives to attract investment and stimulate economic growth.

General Tax Incentives

• Investment Code: Guarantees freedom of enterprise, property ownership, transparency of business and social law, non-discrimination between nationals and foreigners, free conversion of local currency, and free transfer of profits in accordance with CEMAC foreign exchange regulations, and taxation at international standards. Incentives include exemptions from corporate income tax, business license duty, trading license duty, VAT, and reductions on customs duties.
• Exemption from Minimum Tax: Newly registered companies can be exempt from the lump-sum minimum tax of XAF 1 million and the flat-rate tax for up to two years, subject to restrictions related to the type of activity and investments made.
• VAT Exemption for Investments: Investments in sectors like tourism and construction are VAT-exempt for investments exceeding XAF 300 million.

Special Economic Zones (SEZs)

• Corporate Income Tax (CIT) Exemption: New companies in SEZs like Mandji Island and Nkok can enjoy a 10-year CIT exemption and a reduced rate of 10% from the 11th year onwards.
• Exemption from Other Taxes: A 25-year exemption from withholding tax, VAT, property tax, and import duties is available.
• Free Recruitment of Foreign Employees: Companies in SEZs can freely recruit foreign employees.

Sector-Specific Incentives

• Oil and Gas: The hydrocarbon code offers a revised framework with lower tax rates, a minimum royalty rate (varying based on location and resource type), and the elimination of corporate income tax.
• Mining: Companies in the mining sector benefit from exemptions from distribution taxes, business licenses, and property taxes.

Tax Credits

• Job Creation: Companies can receive a tax credit equal to 20% of the gross salary paid to new Gabonese employees. Specific requirements regarding the number of jobs created (based on company size) and contract type apply.

Other Provisions

• Deferred VAT Payment on Imports: Industrial and exporting companies importing goods (materials, equipment, machinery, and spare parts) exceeding XAF 100 million can defer VAT payment if they meet specific compliance requirements.

Additional Information:

• While the information above reflects the situation as of today, February 5, 2025, tax laws and regulations are subject to change. It is essential to consult the latest official sources for up-to-date details.
• The specific eligibility criteria, application procedures, and required documentation for each incentive may vary. Detailed information can be found on the websites of the relevant Gabonese government agencies or through consultation with tax professionals specializing in Gabonese regulations.
• The government has expressed intentions to shift towards performance-based incentives and encourage reinvestment by established businesses, but implementation details need further clarification.