In Gabon, employers bear significant responsibilities in terms of social security contributions on behalf of their employees.

Social Security Contributions

Employers contribute to several social security schemes:

• Retirement: Employers contribute 5% of the employee's gross salary to the National Social Security Fund (CNSS) for the employee's pension.
• Occupational Hazards: Contribution rates vary from 1% - 5% depending on the industry's risk classification. This contribution covers employees in the event of workplace accidents or work-related illnesses.
• Family Allowances: Employers contribute 8% of the employee's gross salary to support the family allowances scheme.
• Health Insurance: A compulsory health insurance contribution is shared between the employer and employee, with a small employer contribution to subsidize the cost.
• Additional Funds: Smaller contributions towards funds like medical evacuations may apply.

Payroll Tax

Employers contribute 1.2% of total payroll toward the Contribution for Vocational Training (CFP), which supports vocational training programs and initiatives in Gabon.

Calculation and Filing

All contributions are calculated as a percentage of an employee's gross salary. These taxes and contributions are withheld directly from the employee's paycheck. Employers are responsible for filing and remitting collected contributions to the appropriate authorities, usually on a monthly basis.

Importance of Compliance

Understanding and complying with responsibilities regarding social contributions and payroll taxes is crucial for employers. Non-compliance and inaccurate calculations can lead to significant fines and penalties. Employers may find it beneficial to use a payroll service provider or seek the help of a tax specialist in Gabon to ensure compliance.

In Gabon, employees are subject to a progressive Personal Income Tax (PIT) system. The tax rates range from 5% to 35%, depending on income levels.

Social Security Contributions

Gabon has a mandatory social security system to which employees contribute. For retirement, employees contribute 2.5% of their gross salary towards their pension fund through the National Social Security Fund (CNSS). For health insurance, employees contribute 1% of their gross salary to the National Health Insurance and Social Guarantee Fund (CNAMGS). This contribution covers basic health insurance. Additionally, smaller percentages may be withheld for contributions to funds supporting medical evacuations and medication distribution.

Complementary Tax on Salary (TCTS)

A Complementary Tax on Salary (TCTS) of 5% is withheld from salaries and other forms of compensation. However, incomes up to 150,000 XAF per month are exempt from this tax.

Calculation and Withholding

Employers are responsible for calculating the PIT, social security contributions, and TCTS based on an employee's gross salary. These taxes are then withheld directly from the employee's paycheck before they receive their net salary.

Understanding Your Payslip

Employees should review their payslip carefully to understand the specific deductions. If you have any questions regarding deductions on your payslip, it's advisable to reach out to your employer or consider consulting a tax advisor with expertise in Gabon's tax system.

In Gabon, the standard VAT rate is 18%, which is applied to most goods and services supplied within the country. However, there are also reduced VAT rates of 10% and 5% that apply to specific goods and services listed in the tax code.

Reduced VAT Rates

• 10%: This reduced VAT rate applies to certain goods and services as specified in the tax code.
• 5%: This further reduced VAT rate applies to a narrow range of essential goods and services also specified in the tax code.

VAT Exemptions

Certain supplies of goods and services may be exempt from VAT in Gabon. These include financial services, medical services, educational services, and specific agricultural products.

VAT Liability for Services

The place where a service is considered to take place for VAT purposes is important. Generally, services are deemed supplied where the supplier has its place of business or establishment. However, specific exceptions and rules exist depending on the type of service. For instance, services related to real property are taxed where the property is located.

B2B vs. B2C

• For B2B (business-to-business) services, the reverse charge mechanism may apply if the service recipient is a registered VAT business in Gabon.
• For B2C (business-to-consumer) services, the business generally charges VAT to the customer.

Cross-Border Service Transactions

VAT can get complicated when it comes to services provided across borders. Factors to consider include the location of the customer receiving the service and specific VAT rules for electronic services, telecommunication services, and more.

VAT Registration and Compliance

Businesses exceeding a certain turnover threshold are generally required to register for VAT in Gabon. Registered businesses must collect VAT from customers, file regular VAT returns, and remit collected VAT to the tax authorities.

Professional Advice

Due to the complexities of VAT rules, it's highly advisable to consult with a tax advisor or VAT specialist familiar with Gabon's regulations for situations involving specific services or cross-border transactions.

Gabon offers a variety of tax incentives to stimulate economic activity and attract investment in different sectors.

Special Economic Zones (SEZs)

The Nkok Special Economic Zone was established by Gabon as a prime location for industrial businesses to enjoy significant tax breaks. Companies operating within the SEZ can benefit from a 10-year corporate tax exemption for newly established businesses. They can also enjoy a 25-year exemption from various taxes, including withholding tax, property tax, and import duties.

Sector-Specific Incentives

The Gabonese government provides tax incentives tailored to promote specific industries:

• Oil & Gas and Mining: These sectors benefit from customs duty exemptions on imported equipment used for operations.
• Tourism: The Tourism Investment Code provides tax breaks to foreign investors in the tourism industry during their initial eight years of operation.
• Agriculture: The Agriculture Code offers tax and customs benefits to agricultural businesses, with a focus on small and medium-sized enterprises (SMEs). This includes exemptions from property taxes on agricultural land and customs duties on imported fertilizers and food for livestock farming.

General Tax Incentives

In addition to sector-specific benefits, Gabon offers broader tax breaks to encourage business activity:

• Job Creation Tax Credit: Businesses receive a 20% tax credit on the gross salary of newly hired Gabonese employees, subject to creating a minimum number of jobs based on company size.
• Deferred VAT Payment: Industrial and exporting companies can defer VAT payments on imported goods exceeding a specific value, provided they meet compliance requirements.
• Preferential Tariff Framework: Existing industrial companies aiming to expand production capacity can qualify for a reduced duty and tax rate on imported equipment (excluding materials, furniture, and spare parts) exceeding a set value.