MauritaniaTax Obligations Detailed

In Mauritania, employers face various tax obligations related to payroll, corporate income, and other levies.

Payroll Taxes

• Employee Income Tax: Mauritania uses a progressive tax system for employee income tax:
  • 15% for monthly income between 6,000 and 9,000 MRU
  • 25% for monthly income between 9,000 and 21,000 MRU
  • 40% for monthly income exceeding 21,000 MRU
• Social Security Contributions: Employers contribute 15% of an employee's gross salary up to a maximum of 15,000 MRU per month to the Caisse Nationale de Sécurité Sociale (CNSS). Employees also contribute 1% for social security and an additional 4% to the Caisse Nationale d'Assurance Maladie. This brings the total employee contribution to 5%.

Corporate Income Tax

• Standard Regime: The corporate income tax rate is generally 30% of profits or 2.5% of taxable income (whichever is higher), with a minimum tax of 125,000 MRU. Variations exist for intermediate and flat-rate regimes.
• Subcontractors in Oil Industry: Subcontractors working with oil companies on contracts shorter than 12 months benefit from a simplified tax regime with a 4% corporate income tax.
• Branch Withholding Tax: For foreign companies with branches in Mauritania, a 10% branch withholding tax applies to after-tax income.
• Payment Schedule: Corporate income tax is typically paid in installments every four months: April 30th, August 31st, and December 21st. Exceptions and deferrals may apply in specific situations.

Value Added Tax (VAT)

• Standard Rate: The standard VAT rate is 16%.
• Zero-Rated Exports: Exports of goods and services are typically zero-rated.
• Specific Rates: Higher VAT rates apply to certain goods and services. Telecommunications services are taxed at 18%, and petroleum products at 20%.

Other Taxes

Besides the above, several other taxes are relevant for businesses in Mauritania:

• Property Tax: Levied on rental value, determined by the municipal council with rates generally between 3% and 10%. A common rate is 8%.
• Business Activity Tax: Calculated based on turnover up to 500,000 MRU.
• Registration Duties: Applies to real property or business transfers with variable rates.

This information is current as of February 4, 2025, and might change due to legislative updates or adjustments in tax regulations. Always verify the latest regulations with official Mauritanian government sources or consult with a tax advisor for the most up-to-date information.

Employee tax deductions in Mauritania consist of several components, including income tax, social security contributions, and other taxes like the business activity tax.

Income Tax

Income tax is levied on all employment income earned in Mauritania, regardless of the employee's residency or the employer's location. The tax is progressive, with rates varying depending on income levels.

• Up to 9,000 MRU: 15%
• 9,001 to 21,000 MRU: 25%
• Above 21,000 MRU: 40%

A 2.5% withholding tax is also applicable to Mauritanian residents providing services for which they are liable under the personal business income tax regulations. Non-residents providing services in Mauritania are subject to a 15% withholding tax.

Social Security Contributions

Employees contribute 1% of their salary towards social security. Employers contribute 15% of the employee's monthly salary, capped at 7,000 MRU. New hires who meet certain criteria may qualify for a social security contribution reduction for employers. This means the employer can reduce their contribution base by the amount of the minimum wage for up to one year, and by 50% of the minimum wage for a further six months. This is available for new employees who have worked no more than three months for another employer in the past year.

Other Taxes

• Business Activity Tax (BAT): The BAT applies to individuals conducting commercial activities and is calculated based on turnover. The specific rates vary.
• Other Deductions: While the gross salary is generally the basis for income tax, certain deductions might be applicable for business expenses, similar to those allowed for corporate income tax. Losses can be carried forward for up to five years to offset future profits, following the rules for corporate income tax.

Important Considerations

Tax regulations and rates are subject to change. The information provided here reflects the available information as of February 4, 2025. For the most up-to-date and detailed information, consulting with a tax advisor or referring to official government resources is essential.

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

VAT Rates

• Standard Rate: 16% applies to most goods and services.
• Petroleum Products: 20%
• Telecommunications Services: 18%
• Exports: 0%

VAT Registration

While the sources do not explicitly mention the current VAT registration threshold in Mauritania, they indicate that businesses exceeding a certain annual turnover must register. Businesses involved in import or export activities must register regardless of turnover. At one point, it was businesses with turnover greater than 10 million MRU. Those with turnover between 5 and 10 million MRU could register voluntarily but were then committed for two years.

Filing and Payment

• VAT returns and payments are typically due monthly. Some sources state submissions are due by the 25th day of the following month or the 15th of the following month.
• Withholding taxes (WHT) are generally due by the 15th of the month following the withholding month.
• For annual taxes (CIT, PIT) the filing deadline is March 31st of the following year. Payment is then done in three installments: 40% by March 31st, 30% by June 30th, and the remaining balance by September 30th.

Exempt Goods and Services

Some goods and services may be exempt from VAT or subject to a reduced rate. While the sources did not confirm any specific exemptions for 2025, some past examples included basic foodstuffs, certain medical supplies, and exports. Public passenger transport and some freight transport may also be exempt.

E-Invoicing

As of October 2023, Mauritania has started implementing e-invoicing regulations. Initially, businesses with a turnover exceeding 100 million MRU are mandated to comply, with a phased rollout planned. This involves a pre-clearance system where invoices are first sent to the tax authority via an Electronic Billing System before being issued to customers.

Other Relevant Taxes

• Customs Duties: Varying rates (0%, 5%, 13%, 20%, 22%) apply to imports depending on the nature of the goods.
• Excise Taxes: Levied on the production and import of specific goods, including petroleum products, alcoholic beverages, tobacco, and certain other items.
• Business Licence Tax: Payable based on annual turnover, with rates varying from 30,000 MRU to over 300,000 MRU for the highest turnover bracket (exceeding 400,000,000 MRU).

It is essential to note that tax regulations are subject to change, and this information is current as of February 4, 2025. Consulting with a local tax advisor is highly recommended for the most up-to-date and specific guidance.

Mauritania offers various tax incentives to attract investment and promote specific sectors.

General Tax Incentives

• Investment Code: This code provides incentives for various investments, including:
  • Free Export Zones: Businesses operating within these zones may benefit from exemptions from taxes such as business tax, property tax, and payroll tax. A single communal tax, not exceeding 5 million ouguiyas annually, replaces these taxes. Eligibility requires a minimum investment of 500 million old ouguiyas, creation of at least 50 permanent jobs, and demonstration of an export potential of at least 80%.
  • Development Zones (Outside Nouakchott): Incentives aim to stimulate economic activity outside the capital. Specific details on these incentives remain scarce.
  • Establishment Agreements: This offers tailored incentives negotiated between the government and individual investors, especially for large-scale projects.
  • Small and Medium-Sized Companies (SMEs): Businesses meeting specific investment and employment criteria are eligible for tax benefits during both the setup and operational phases. Details regarding specific thresholds and benefits remain unclear.
• Nouadhibou Free Trade Zone: As Mauritania's primary Special Economic Zone (SEZ), it provides additional benefits:
  • Reduced municipal taxes.
  • Exemption from property tax.
  • Incentives promoting local hiring and workforce development.
• Mining Code: Companies engaged in mining operations can benefit from:
  • Corporate tax exemption for 36 months.
  • Subcontractors of companies with state agreements may receive exemptions from VAT, license tax, and municipal taxes. Further benefits, such as a reduced import rate of 5% and exemptions from import duties on personal effects for expatriate staff, can be negotiated. (e.g. Kinross Gold Corporation – Tasiast Mine benefits from exemptions for apprenticeship tax and all import duties)
• Crude Oil Code: Oil companies operating under this code may receive exemptions from corporate income tax (IRCM), apprenticeship tax, and business tax.

Sector-Specific Incentives

• Green Hydrogen Code (2024): This new law provides a regulatory framework for green hydrogen projects, offering:
  • Exemptions from VAT.
  • Corporate tax incentives.
  • Other tax exemptions to developers and subcontractors.

Additional Considerations

• VAT Exemptions: Multiple sources highlight the need to reduce VAT exemptions to improve revenue and efficiency. A significant reform area is shifting from exemptions towards cost-based incentives.
• Corporate Tax Incentives: Cost-based incentives, such as accelerated depreciation, investment allowances, or non-refundable investment tax credits, may replace corporate tax exemptions. These aim to link tax reductions directly to investment amounts.
• Tax Administration: Mauritania focuses on enhancing tax administration through simplified procedures, efficient arrears management, and improved compliance.
• Public-Private Partnerships (PPPs): The PPP law outlines specific tax advantages for projects structured under this model.

It's crucial to consult with Mauritanian tax authorities or legal experts for up-to-date and comprehensive details on specific incentives relevant to your business or investment. This information reflects the available details as of February 4, 2025, and may be subject to change.