Tax Law Income

Africa tax briefly | February 16, 2021

February 17, 2021

AFRICAN UNION: Developments in the African Free Trade Agreement

On January 1, 2021, Africa began trading in accordance with the preferences and rules negotiated and agreed under the African Continental Free Trade Agreement ("AfCFTA”). The start of trading had previously been postponed due to the COVID-19 pandemic, with the AfCFTA Secretariat giving priority to fighting the pandemic.

The AfCFTA, which came into force on May 30, 2019, was signed by 54 countries, while 34 countries deposited their instruments of ratification by January 1, 2021.

On January 15, 2021 and February 5, 2021, Malawi and Zambia deposited their instruments of ratification as the 35th and 36th countries to do so.

During a virtual event on January 15, 2021, the Rwandan Ministry of Trade and Industry launched the start of trade as part of the AfCFTA. The ministry announced that goods from African countries that have ratified the agreement establishing the AfCFTA and its protocols will be given preferential rates and service providers will be allowed to offer their services without restrictions.

ANGOLA: Budget approved for 2021

The amendments proposed by the State Budget 2021, approved by Law 42/20 of December 31, came into force on January 1, 2021. Major changes include:

  • Reduction of the withholding tax rate on services provided by non-resident companies to Angola-based or Angola-based oil companies from 15% to 6.5%;
  • Introduction of a simplified VAT ("VAT”) Regulation for persons with sales or imports of AOA 350 million or less, for which eligible taxpayers levy VAT at the rate of 7% of their monthly sales, with a deduction of 7% of the total amount of VAT on receipts permitted;
  • Introduction of a VAT rate of 2.5% for claims received from taxpayers through automatic payment terminals for the delivery of goods or services;
  • Introduction of a VAT rate of 5% on the import and delivery of goods in accordance with the amended Annex I of the VAT Act; and
  • Extension of the limitation period for the 2015 assessment year to December 31, 2021.

BOTSWANA: The VAT rate has been increased from 12% to 14%

The Minister of Finance and Economic Development, in his 2021 budget speech to the National Assembly on February 1, 2021, announced a series of tax changes that will come into effect on April 1, 2021, including:

  • Increase in the VAT rate from 12% to 14%;
  • Increase in the withholding tax rate for dividends from 7.5% to 10%;
  • Increase in the tax-free threshold for individual income tax rates from 36,000 BWP to 48,000 BWP per year;
  • Granting amnesty to taxpayers with outstanding taxes, the interest and penalties of which should be waived for taxpayers who pay the principal amounts owed; and
  • Introduction of a tax on the import of used vehicles into Botswana.

BURKINA FASO: Multilateral Instrument ("MLI") enters into force

On February 1, 2021, the Multilateral Convention (2016) (MLI) came into force with regard to Burkina Faso. Burkina Faso signed the convention on June 7, 2017 and filed its final position on the MLI on October 30, 2020, including the three tax treaties that the MLI aims to cover.

BURKINA FASO: 2021 budget adopted

Burkina Faso recently approved its 2021 budget for 2021. The main provisions that will apply from January 1, 2021 include:

  • the restructuring of the synthetic tax system into a flat rate regime for companies with a turnover of up to FFA 5 million and a declaration system for companies with a turnover of FFA 5 million to F 15 million;
  • Introduction of a tax on financial activities (Taxe sur les Activités Financières, TAF) on banking and financial transactions at a rate of 17%. For taxpayers under the standard taxation system and for bank refinancing operations, a reduced rate of 15% applies. Activities subject to the TAF are exempt from VAT.
  • Extending the scope of the contribution from the livestock sector (Contribution du secteur de l & # 39; élévage, CSE) to fishery and aquaculture products;
  • Change of registration and payment deadlines for taxes and duties from 20th to 15th of the month;
  • Make electronic payments mandatory for taxpayers within the framework of the tax office for medium-sized companies;
  • Requirement of a tax certificate as a prerequisite for the transfer of real estate by real estate companies as well as for the granting, renewal and transfer of mining titles;
  • Extension of the reduced rate of property transfer fees until 2021.

The Finance Law No. 035-2020 / AN was passed by Parliament on October 19, 2020 and published in the Official Journal on December 3, 2020.

CABO VERDE: Tax agreement with Spain enters into force

The Cabo Verde / Spain Income Tax Agreement (2017) came into force on January 7, 2021 and is generally applicable from January 1, 2022 for taxes that are regularly incurred in relation to income taxes and from January 7, 2021 for all other taxes .

CABO VERDE: Electronic invoices and tax documents implemented

Ordinance No. 74/2020 (gradual implementation of electronic invoices and tax documents) of December 28, 2020 came into force on December 29, 2020 and provides for the implementation of electronic invoices and electronic tax documents to be gradually determined in the following phases:

  • a pilot phase;
  • a voluntary participation phase in which all taxpayers can join the system for the electronic issuing of invoices and tax-relevant documents from January 4, 2021; and
  • A mandatory participation phase in which the electronic issuing of invoices and tax-related documents is mandatory.

CAMEROON: Enacted Finance Act 2021

Cameroon introduced various changes to the General Tax Code through Law No. 2020/018 of December 17, 2020 (Finance Law 2021). Major changes include:

COVID-19 Pandemic Tax Measures

  • Expand the COVID-19 measures implemented in 2020 and introduce a few more measures for taxpayers undergoing restructuring to mitigate the economic impact of the COVID-19 pandemic, including:
    • Extension of taxpayers 'taxpayers' carryforwards in the sectors hardest hit by the pandemic by one year. A list of the qualified sectors is issued by the Minister of Finance.
    • Companies in sectors hardest hit by the COVID-19 pandemic that are going through a restructuring in FY 2021:
      • a deduction for capital losses from the transfer of claims to determine taxable income for the 2020 financial year;
      • a reduction of the registration requirement for the transfer of shares from 2% to an amount to be determined in the 2021 financial year; and
      • a fixed registration requirement of F.CFA50 000 when assuming liabilities in partial transactions with capital contributions;
    • Allow the tourism sector to benefit from a 2021 tourism tax increase and corporate tax exemption;

Corporate taxation

  • Requirement of a written and registered loan agreement as a prerequisite for the deduction of interest paid to a related party;
  • Claim for losses due to damage to goods to be noted by a tax officer (previously a tax inspector) as a requirement for a deduction;
  • Introduction of a deductibility limit of 0.5% of total breweries production to deduct losses due to damage and breakage;
  • Introduction of a reduced corporate income tax of 28% for taxpayers who generate sales of up to FFA 3 billion per year;
  • Extension of the loss carryforward period for credit institutions and government portfolio companies undergoing restructuring to six years;

Other taxes

  • Application of a reduced duty rate of 5% on imported equipment for the pharmaceutical industry;
  • Exemption from dutiable medicines, raw materials for the pharmaceutical industry and materials for agriculture, livestock and fishing;
  • Exemption from registration of public debt repurchase agreements, public debt securitization agreements and financial assistance agreements granted to local authorities;
  • an agreement that is intended to enable one company to carry out one activity as a substitute for another, to be treated as a "transfer of business ownership" and taxed as such for registration purposes;

Tax administration

  • All tax payments must be made by bank transfer or electronically, especially for large corporate taxpayers. Cash payments are only allowed to banks or authorized financial institutions.
  • Extension of the deadline for notification of material changes affecting a company (e.g. changes in participation and capital) to three months if such changes have been made abroad;
  • Providing the ability for good taxpayers with 15% tax progress over the previous year to be exempt from tax audits;
  • Extension of the tax recovery period for debt due to tax audits from 15 days to 30 days; and
  • The deadline for filing the electronic tax return for persons with active income is March 15th of the following financial year and June 30th for persons with earned income and passive income.

Incentives

  • Taxpayers who wish to benefit from the wage tax exemption granted to employers who hire young professionals to be members of an approved administrative center;
  • Application of a reduced corporate tax rate of 25% on:
    • companies listed on the Central African Stock Exchange. The minimum tax rate will also be reduced to 1.5% of annual sales; and
    • Companies known to be involved in public issues that list all or part of their interests or commitments on the Central African Stock Exchange from the date of listing;
  • Introducing incentives for start-ups that are active in the digital sector and registered in an approved start-up management center, including:
    • a five-year exemption from all taxes and duties, with the exception of social security contributions, during the incubation period;
    • a 10% discount on any capital gain made on the transfer of a startup after the incubation period; and
    • Incentives for a period of five years during use after the incubation period, including exemption from trade license, registration, wage tax (excluding social security contributions), a reduced corporate tax rate of 15% and a 50% reduced minimum income tax base and a reduced tax rate on dividends of 5 %.

CAMEROON: Multilateral Convention ("MLI") ratified

On December 29, 2020, Cameroon ratified the OECD Multilateral Convention (MLI) (2017) by Presidential Decree No. 2020/798 of December 29, 2020. The country presented its MLI position at the time of signature and carried out its reservations and communications on and including five tax treaties intended to be covered by the MLI.

CONGO DEMOCRATIC REPUBLIC: Rules relating to the rate and conditions of application of the special tax on issued capital gains

The Minister of Finance has rules for the calculation, filing and settlement of the special tax on capital gains from the transfer of shares in mining companies by Ministerial Decree No. CAB / MIN / FINANCES / 2020/091 on December 3, 2020. The Director General of the Tax Authority (Director General of Impôts , DGI) also issued a grade (No. 01/0182 / DGI / DG / CT / GM / 2020). on December 8, 2020, a submission for filing the special tax on capital gains from the transfer of shares.

In summary, the rules provide for the following:

  • Capital gains from the transfer of mining interests are subject to a tax rate of 30%;
  • The capital gains tax only applies to assets located in the Democratic Republic of the Congo. If a DRC based company owns assets that are located in more than one jurisdiction, tax will only be payable on that portion of the DRC's profits.
  • Capital gains are calculated from the difference between the transfer price and the book value of the shares transferred;
  • The tax is payable by the transferor in the Democratic Republic of the Congo or by the non-resident transferring the shares. and
  • The tax is withheld by the buyer in the Democratic Republic of the Congo. If the buyer is a non-resident company, the mining company whose interests have been transferred and which owns the mining rights in the DRC will be required to withhold tax.

DEMOCRATIC REPUBLIC OF THE CONGO: Finance Act 2021 in force

The Finance Law 2021 (Law 20/020 of December 28, 2020) contains a number of changes, including:

  • Extension of the tax deduction for bad debts in favor of banks to microfinance institutions;
  • Allowing donations and contributions to the COVID-19 Pandemic Fund as a tax deduction, provided that these expenses are supported by relevant documents;
  • Abolition of the VAT exemption on imports in favor of mining companies. However, VAT exemption on goods intended for research, exploration, prospecting, construction and development of mining projects is still available to mining companies.
  • Changing the tax audit procedures, including extending the deadline for submitting the requested documents from 10 days to 20 days; and
  • Broadening the definition and scope of tax penalties.

GAMBIA: The 2021 budget announces various tax changes

The Minister of Finance and the Economy announced various tax changes in his 2021 budget on December 4, 2020, which will come into force on January 1, 2021. Major changes include:

Direct taxation

  • Encouraging individuals classified as major taxpayers to submit audited accounts with their annual returns;
  • Exemption from income tax for investors in the informal sector;
  • Reduction of the tax rate for fringe benefits from 35% to 27%;
  • Increase the annual tax threshold on investment income from 18,000 GMD to 24,000 GMD;

Indirect taxation

  • Increase the VAT registration threshold for voluntary taxpayers from 500,000 GMD to 1 million GMD; and
  • Abolition of the environmental tax payable by workers.

GHANA: New excise stamps introduced

The Ghana Revenue Authority ("GRA”) With effect from January 1, 2021, new excise stamps introduced to be affixed to certain domestic and imported products such as cigarettes, alcoholic and non-alcoholic beverages and textiles. The new excise stamps have improved security features that further eliminate counterfeiting and counterfeiting, increasing sales. Both old and new stamps will be in circulation until the old tax stamps are used up.

GHANA: Class decision on the tax treatment of employee uniforms

The GRA issued a class ruling on the tax treatment of clothing allowances granted to GRA employees and members of the Ghana Association of Bankers ("GAVE”).

According to the regulation, which is valid until December 2023 and only applies to employees of GAB members and the GRA itself, 20% of the clothing allowance is permitted as a deduction, limited to 5% of the basic salary of the employees.

GHANA: Independent Tax Complaints Board established

The Revenue Administration (Amendment) Act 2020 (Act 1029), which amends the Revenue Administration Act 2016 (Act 915) and comes into effect on October 6, 2020, established a tax appeals board that is part of the current tax dispute resolution process . The TAB is independent from the GRA and is composed of tax attorneys, retired GRA officials, representatives from the Chartered Institute of Taxation and the Institute of Chartered Accountants, and individuals from the private sector.

Previously, taxpayers who were dissatisfied with the GRA's appeal decisions had to appeal to the courts in Ghana. It is now mandatory for taxpayers to appeal against appeal decisions to the Tax Appeals Board before referring to other courts.

GHANA: Introduction of a three-level reporting structure for transfer pricing

Ghana introduced the new Transfer Pricing Regulations 2020 (L1 2412), which repealed the 2012 regulations and came into force in November 2020. The 2020 regulations include many provisions of the previous regulations, but also include requirements for more comprehensive information to be included in the regulations annual transfer pricing return and transfer pricing documentation.

Although the previous regulations required transfer pricing documents, the 2020 regulations now require that these documents contain both a master file and a local file, which must be submitted to the GRA within four months of the end of the accounting year.

The ultimate parent company of a multinational group of companies that is resident for tax purposes in Ghana and has reached a certain turnover threshold must also submit a country-specific registration ("CbC") Report.

Transfer pricing documentation is not required if the related party arrangement does not exceed the Ghana Cedi equivalent of USD 200,000. The CbC report is due 12 months after the last day of the relevant financial year of the multinational group.

The 2020 ordinances now make a clear distinction between the transfer pricing declaration and the income tax declaration and identify them as a separate declaration that must be submitted annually.

KENYA: Digital Service Tax Regulations published

The Digital Service Tax (DST) 2020 Regulations (Legal Notice No. 207 of 2020) were published in Kenya Gazette Supplement No. 214 of December 2, 2020 and came into effect on January 1, 2021.

The ordinances contain details on the management of summer time, including the obligation of a person obliged to pay the summer time to file a tax return in the prescribed format and the tax due by the 20th day of the month following the end of the month in which the digitization takes place transfer service is provided.

Daylight Saving Time refers to the income of a resident or non-resident who is of Kenya or has come from the provision of services through a digital marketplace (as defined). If it is paid by a resident or non-resident with permanent establishment in Kenya, it will be offset against the corporate income tax that that person is liable to pay for that income year. If it is paid by a non-resident with no permanent establishment in Kenya, it is a final tax. In such an event, the non-resident may choose to register for tax registration under a simplified framework to make a payment or to appoint a tax representative with it.

KENYA: The government is operationalizing the beneficial ownership e-register

The Business Registration Service, charged with overseeing the operation of the Business Register and the overall implementation of the Companies Act 2015, has operationalized the beneficial ownership e-register.

Under the Companies Act and the Companies (Beneficial Ownership Information) Regulations 2020 (the Regulations), all companies registered under the Companies Act must keep a register of their beneficial owners and submit this to the registrar.

All officers and authorized persons of existing companies are required to submit a copy of the beneficial ownership register of a company within 30 days of its creation and to notify the Registrar of Companies of any change in beneficial ownership information within 14 days.

After initially granting a grace period until January 31, 2021 for the creation of beneficial ownership registers, the government extended the deadline for companies to submit beneficial ownership registers by a period of six months with effect from February 1, 2021.

KENYA: VAT rate reduced from 16% to 14%

On December 22, 2020, Parliament approved the change in the VAT rate from 14% to 16% with effect from January 1, 2021, as contained in Regulation No. 2020 on Value Added Tax (Change in Tax Rate) as Legal Notice No. 206 of 2020 .

KENYA: The Law on Economic Laws (amendment) aims to facilitate business operations

Various tax and other amendments contained in the 2020 Bill on Business Laws (Amendment) (No. 2) published in 2020 Kenya Gazette Supplement No. 228 (National Assembly Bill No. 50) are intended to conduct business in Facilitate Kenya, including:

  • Exemption from paying KES100 fixed stamp duty on contracts to reduce business costs; and
  • Provision of the National Health Insurance Fund and National Social Insurance Fund contributions on the ninth day of the month;

The draft law was passed in parliament on December 22nd, 2020 in first reading.

KENYA: Reversal of approved corporate tax cut

After lowering the corporate tax rate from 30% to 25% to cushion businesses against the effects of the COVID-19 pandemic last year, the reverse of that lowering was promulgated as Tax Law (Amendment) (No. 2) No. 22 of 2020, which was published on December 24, 2020 and came into force on January 1, 2021.

From the same date, the individual income tax rates were changed from five to three tax bands as follows:

Amount (KES)

Rating (%)

on the first 24,000

10

to the next 100,000

25th

on all income over 388,000

30th

MAURITIUS

The Mauritius Revenue Authority recently published a Qualifying Income Practice Statement (SP) 22/21, which is eligible for a partial 80% exemption.

The Practice Statement clarifies the categories of income to which a partial exemption applies and sets out the conditions for being eligible for partial exemption for certain categories of income other than dividends. The company must:

  • Carrying out its core income generating activities in Mauritius;
  • employ, directly or indirectly, an appropriate number of suitably qualified persons to carry out their core income generation activities; and
  • cause a minimum effort in relation to his level of activity.

MOZAMBIQUE: VAT exemption period extended for certain deliveries

In relation to an amendment to Article 9, Paragraph 13 of Law No. 16/2020 of December 23, 2020, which came into force on January 1, 2021, the VAT exemption period for the following supplies of goods and services has been extended to December 31 Extended in 2023:

  • Sugar;
  • Raw materials, intermediates, parts, equipment and components of the national sugar industry;
  • Edible oils and soaps;
  • Goods resulting from the industrial activity of producing edible oils and soaps operated by the factories concerned;
  • Goods to be used as raw material for the oil and soap industry; and
  • Goods and services that are provided within the framework of the agricultural activity of sugar cane production and are intended for industry.

NAMIBIA: Certain tax incentives have been removed

Through amendments to the Income Tax Act (Act No. 2 of 2020) approved in Government Gazette No. 7249 (Government Notice 144) published June 8, 2020, the government lifted various tax incentives previously granted to manufacturers and export processing zones ("EPZ”) Companies and for goods manufactured in the EPZ, including the announcement that:

  • The special tax incentives granted to registered manufacturers apply at the end of the first tax year beginning after December 31, 2020.
  • The export allowance of 80% for the export of goods made in Namibia excluding fish and meat products will no longer apply from December 31, 2025. and
  • The tax exemptions for EPZ companies, goods manufactured in EPZ and the transport of goods to and from EPZ no longer apply as follows:
    • For companies that were granted EPZ status on or before December 31, 2020: The incentive will no longer apply on December 31, 2025. and
    • Companies that were granted EPZ status after December 31, 2020 will not be granted any tax exemptions during the five-year grace period from January 1, 2021 to December 31, 2025.

NAMIBIA: Convention and Protocol on Mutual Administrative Assistance in Tax Matters enter into force

On April 1, 2021, the multilateral Convention on Mutual Administrative Assistance in Tax Matters, as amended by the 2010 Protocol, will enter into force and will generally apply from March 1, 2022. This applies to the country that has deposited its instrument of ratification with the OECD on December 9, 2020.

NAMIBIA: VAT refunds to be accelerated

According to a notice posted on the Treasury Department's website on November 26, 2020, the government intends to issue undisputed VAT refunds within 90 days of receiving a VAT return effective February 1, 2021.

Qualified taxpayers must meet the following requirements:

  • The required financial records and evidence must be properly stored and ready for submission if necessary.
  • When submitting a VAT credit, the required documentation, including VAT summaries, must be included to speed up the VAT refund review process.
  • VAT credits and all other tax returns for all tax types must be submitted via the ITAS portal.
  • All tax accounts for all tax types must be up to date. and
  • Taxpayers must work with tax auditors during the audit process.

NIGERIA: LIRS extends the deadline for filing the tax return for 2020 PAYE

The Lagos State Internal Revenue Service has extended the legal deadline for filing the employer's pay-as-you-earn (PAYE) tax return to February 14, 2021 in response to taxpayers' appeal.

NIGERIA: Finance Act 2020 approved

The President of Nigeria approved the 2020 Finance Law on December 31, 2020. The law came into force on January 1, 2021 and included significant changes, including:

  • Redefining gross income, which is used as the basis for calculating the consolidated relief allowance, will result in workers no longer being able to claim previously claimed for the portion of their income related to the National Housing Fund, pension contributions and other taxes additional relief of 20% to enjoy exempt items;
  • Income tax exemption from employment for those earning the national minimum wage or less;
  • Reinstatement of a deduction for the premium paid by an individual to an insurance company in relation to life insurance;
  • Limitation of tax relief for pension contributions to schemes, pension institutions or pension funds recognized under the Pension Reform Act 2014; and
  • Establish rules for significant economic presence for the purpose of taxing non-resident persons, executors or trustees who operate a trade or business that includes technical, professional management or advisory services.

NIGERIA: The Tax Appeal Tribunal decides on withholding tax on sales in the normal course of business

The Lagos Tax Appeal Tribunal (TAT) ruled on November 30, 2020 in Tetra Pak West Africa Limited against the Federal Inland Revenue Service ("FIRS”) That sales in the normal course of business of a company are exempt from withholding tax under the provisions of withholding tax under the Companies Income Tax Act, C21, LFN, 2004.

Tetra Pak asks FIRS in 2016 to clarify whether its main business, the sale of packaging equipment, spare parts and materials to customers in the manufacturing sector, qualifies as normal business sales and is therefore exempt from withholding tax. The FIRS responded in 2019 that the sale of packaging equipment, spare parts and materials is a contract with legally enforceable rights and obligations and therefore is not classified as a sale in the normal course of business. Die FIRS stellte ferner fest, dass die Verkäufe von Tetra Pak auf der Grundlage der Bestimmungen ihres Informationsrundschreibens Nr. 9801 vom 1. Oktober 1998 einer Quellensteuer in Höhe von 5% unterlagen.

Tetra Pak wandte sich an die TAT, in der festgestellt wurde, dass „Verkäufe im normalen Geschäftsverlauf“ ein relativer Begriff ist, der nicht als Faustregel für alle Steuerzahler gelten kann, ohne Rücksicht auf ihre täglichen Geschäftsrealitäten. Basierend auf der Definition des Black's Law Dictionary bedeutet "gewöhnlicher Geschäftsverlauf" "die normale Routine bei der Verwaltung von Handel oder Gewerbe". In Ermangelung einer örtlichen Rechtsprechung prüfte die TAT Präzedenzfälle in Indien und formulierte die folgenden Fragen, um festzustellen, ob ein Verkauf im normalen Geschäftsverlauf eines Unternehmens erfolgt oder nicht:

  • Umfasst die Transaktion den Verkauf eines Teils der Haupt- oder Nebengegenstände der Satzung und der Satzung des Steuerpflichtigen?
  • Was ist die Art und Praxis der Unternehmensbranche des Steuerzahlers?
  • Hat der Steuerzahler eine Vorgeschichte in Bezug auf die Transaktion?
  • Wie oft verkauft der Steuerzahler? Ist es eine Einzeltransaktion?

Nach Ansicht der TAT umfassen die Geschäftsgegenstände von Tetra Pak, wie in ihrer Satzung und in ihrer Satzung angegeben, den Verkauf von Ausrüstung und Reparaturen. Daher ist der normale Geschäftsverlauf von Tetra Pak der Kauf und Verkauf von Verpackungsmaterialien, Ersatzteilen und Ausrüstungen und damit von der Quellensteuer befreit.

REPUBLIK KONGO: Finanzgesetz 2021 verkündet

Das Parlament der Republik Kongo hat eine Reihe von Änderungen der Allgemeinen Steuergesetzgebung, der Mehrwertsteuer und des Zollgesetzes durch das Gesetz Nr. 66-2020 vom 31. Dezember 2020 verabschiedet, das vom Präsidenten der Republik Kongo verkündet wurde, dies jedoch ist noch im Amtsblatt zu veröffentlichen. Die vorgeschlagenen Änderungen umfassen:

Körperschaftsteuer

  • Senkung des Körperschaftsteuersatzes von 30% auf 28% für Bergbau-, Steinbruch- und Immobilienunternehmen;
  • eine Senkung des Körperschaftsteuersatzes für gebietsfremde Steuerzahler, die Tätigkeiten in der Republik Kongo ohne Betriebsstätte ausüben, von 35% auf 33%;
  • Senkung des Sondersteuersatzes für Unternehmen / Mindeststeuersatz (TSS) von 2% auf 1% mit einem Mindestbetrag von 1 Mio. F.CFA1 anstelle von 2 Mio. F.CFA für Unternehmen, denen bei einer Verlängerung des Steuersatzes eine vollständige Befreiung von der Körperschaftsteuer gewährt wurde Gründungsabkommen mit dem Staat der Republik Kongo unterzeichnet;
  • Anwendung eines endgültigen Quellensteuersatzes von 20% für ausländische Unternehmen, die nicht nachweisen können, dass sie eine professionelle Einrichtung in der Republik Kongo haben;

Individuelle Einkommenssteuer

  • Erhöhung der pauschalen Steuerunterwerfungsschwelle auf 100 Mio. FFA (zuvor 30 Mio. FFA auf 100 Mio. FFA) und Ausschluss von Steuerzahlern, die regulierte Tätigkeiten ausüben, von diesem Steuersystem;

MwSt

  • Erhöhung der Umsatzsteuer-Registrierungsschwelle von F.CFA60-Millionen auf F.CFA100-Millionen; and
  • Erhebung der Mehrwertsteuer auf Dienstleistungen, die in der Republik Kongo erbracht werden oder wenn der Kunde seinen Wohnsitz in der Republik Kongo hat;

Verwaltung

  • Erfordernis der obligatorischen Einreichung und Zahlung von Steuern auf elektronischem Wege für Steuerzahler, die der tatsächlichen Gewinnbesteuerung unterliegen (régime du réel);
  • Einführung einer von der Steuerverwaltung veröffentlichten Vorlage für Verrechnungspreisdokumentationen; and
  • Einführung einer Verpflichtung für Steuerzahler, die internen oder externen Prüfungen unterliegen, solche Prüfungsberichte auf Anfrage innerhalb von acht Tagen bei der Finanzbehörde einzureichen.

RWANDA: Neuer Investment Code erlassen

Ruanda hat ein neues Investitionsgesetzbuch (Gesetz Nr. 006/2021 vom 5. Februar 2021) erlassen, mit dem das bestehende Investitionsgesetzbuch (Gesetz Nr. 06/2015 vom 28. März 2015) aufgehoben wird. Wichtige Bestimmungen sind:

  • Einführung neuer vorrangiger Abschnitte, einschließlich Bergbauaktivitäten in Bezug auf Mineralexploration, Bau oder Betrieb spezialisierter Innovations- oder Industrieparks, Transport, Logistik und Elektromobilität, Gartenbau und Anbau anderer hochwertiger Pflanzen, die in der vom Ruanda Development Board genehmigten Liste enthalten sind; creative arts in the subsector of the film industry, and skills development in areas where Rwanda has limited skills and capacity as determined by the Rwanda Development Board;
  • introducing various new tax incentives, including a preferential corporate income tax rate of 3% for 100% holding companies, investment special purpose vehicles, collective investment schemes, and on foreign sourced royalties of intellectual property companies;
  • tax incentives for entities established by philanthropic investors, including 0% VAT on goods and services procured locally by the entity and an exemption from employment income tax for expatriates employed by the entity, provided that the number of expatriates does not exceed 30% of the employees of the entity. The government will also refund the social security contributions paid by the expatriates upon their permanent departure from Rwanda;
  • 5% withholding tax on dividends and interest paid on securities listed on the Rwanda Stock Exchange;
  • 10% withholding tax on interest paid on foreign loans, dividends, royalties and service fees, including management and technical service fees by specialised innovation or industrial park developers;
  • an exemption from capital gains tax upon the sale of shares for angel investors investing a maximum USD500 000 in a start-up, provided that the shares were initially purchased as a primary equity issuance by the start-up;
  • incentives to qualifying investors in the film industry, including % VAT on goods and services procured locally and 0% withholding tax on payments made for specialised services procured by the investor
  • providing for special incentives to be granted to strategic investment projects (i.e. investment projects of national importance which have a strategic impact on the development of the country and meet other requirements set out under the Investment Code).

RWANDA: New COVID-19 pandemic measures to support businesses announced

On 27 January 2021, the Rwanda Revenue Authority announced new measures to support businesses amid COVID-19 pandemic, including

  • extending the deadline for the declaration and payment of rental income and trading licences from 31 January to 28 February 2021; and
  • suspending strict tax debt recovery measures and customs comprehensive audits requiring physical interactions with taxpayers until the end of February 2021.

RWANDA: New Transfer Pricing Rules introduced

The Rwandan government published new Transfer Pricing Rules in the Official Gazette on 14 December 2020. The Ministerial Order 003/20/10/TC of 11/12/2020 establishing general rules on transfer pricing was approved by the Cabinet meeting of 25 September 2020. The new Rules replace the previous rules that have been in force since 2007 and reflect key aspects of the 2017 OECD Transfer Pricing Guidelines.

The Rules require persons involved in controlled transactions to develop transfer pricing policies, and to prepare and keep the documentation that verifies that the conditions of their controlled transactions for the relevant tax period are consistent with the arm's length principle. Relevant transfer pricing documentation must be available before the deadline for filing the income tax return, but the documents related to the global organizational structure of the group of companies to which a Rwandan taxpayer belongs must be submitted to the tax administration with the first income tax declaration.

The ultimate parent entity of a multinational enterprise (“MNE”) group that is tax resident in Rwanda is also required to file a country-by-country (“CbC”) report not later than 12 months after the last day of the reporting fiscal year of the MNE group. No revenue threshold has been specified for MNEs required to file a CbC report.

Taxpayers with an annual turnover below RWF600-million, and whose controlled transactions have the value below RWF10-million individually or the aggregate value below RWF100-million are not required to prepare TP documentation.

RWANDA: Expenses not supported by electronic invoices to be disallowed as deduction

The Rwanda Revenue Authority on 24 December 2020 announced that all expenses not supported by electronic billing machine invoices will be disallowed as deduction for income tax purposes for the 2021 tax period.

The Tax Procedure Code, enacted in 2019, requires all taxpayers to issue invoices generated by an electronic invoicing system certified by the tax administration.

SIERRA LEONE: Finance Bill 2021 introduces various tax changes

Parliament has approved a number of tax amendments, which took effect on 1 January 2021, through the Finance Bill 2021 (the Bill), following the President's assent. Significant amendments include:

  • introducing a new digital services tax of 1.5% on the turnover of all digital and electronic transactions;
  • reducing the corporate income tax rate for manufacturing companies outside the western area (capital city) from 25% to 15%;
  • allowing group members to offset losses from other group members;
  • reducing the capital gains tax rate from 30% to 25% in line with the reduction of the corporate income tax rate in 2020;
  • allowing, in addition to expenses relating to donations to good causes and social services for tax purposes, an additional 25% corporate social responsibility credit for businesses that invest in free and quality school education, children's welfare, natural disasters and disease outbreaks, and maternal child health;
  • exempting tourism establishments registered with the National Tourism Board are exempt from income tax for the period from 1 January 2021 to 31 December 2023; and
  • exempting SMEs registered between 1 January 2021 and 31 December 2023 from income tax for the first year of registration.

UGANDA: Guidance on the application of the electronic invoicing system issued

The Uganda Revenue Authority (“URA”) published a notice on its website on 29 January 2021, announcing the launch of a facility for validating e-invoices/receipts issued by suppliers for purposes of the electronic fiscal receipting and invoicing system (“EFRIS”). Purchasers are advised to check the validity of the e-invoices/receipts through the URA web-portal or through a mobile application called the "kakasa EFRIS" that can be accessed through the Google Play Store or the Apple App Store.

The URA has also provided guidelines to taxpayers registered for EFRIS on how to access their customized reports for the purposes of VAT return filing:

In accordance with the VAT (Amendment) Act 2020, any input tax credit or refund claim shall be granted only if it is supported by an authentic e-invoice/receipt starting with the tax return of January 2021 which is due by 15 February 2021.

UGANDA: Tax agents for 2021 approved by Revenue Authority

The URA has issued a public notice informing all taxpayers and the general public that approval of tax agents for the period ending 31 December 2021, as legally provided for under section 9 and 10 of the Tax Procedures Code Act, has been effected. The URA will only interface with a registered and appointed tax agent where a taxpayer is not representing itself.

A taxpayer can appoint its preferred tax agent from the list of registered tax agents available on the URA web-portal.

UGANDA: Amendments to tax laws approved

The President of Uganda assented to the Income Tax (Amendment) Act 2020, the Tax Procedures Code (Amendment) Act 2020, the Excise Duty (Amendment) Act 2020, the Stamp Duty (Amendment) Act 2020 and the Value Added Tax (Amendment) Act 2020 on 24 November 2020.

The Value Added Tax (Amendment) Act 2020 took effect on 1 July 2020; the Excise Duty (Amendment) Act 2020 took effect on 9 November 2020; and the Stamp Duty (Amendment) Act 2020 took effect on 1 July 2020.

UGANDA: Court rules on VAT on services between a branch and its head office

On 30 November 2020, the Tax Appeals Tribunal in Samsung Electronics East Africa Limited V. Uganda Revenue Authority ruled that there was no supply of services between a branch registered in Uganda and the head office incorporated in Kenya and, therefore, there was no VAT payable on such services.

ZAMBIA: 2020 Tax Amendment Bills approved

Parliament has approved amendments to various tax laws on 9 December 2020. Significant amendments include:

  • requiring the use of an electronic payment machine as a payment method and introducing a penalty for failure to comply;
  • introducing property transfer tax, in the case of an indirect transfer of shares, to a transfer of shares that represents at least 10% of the value of shares in a company incorporated in Zambia;

ZIMBABWE: 2021 Budget approved by parliament

Parliament has approved the 2021 Budget and fiscal measures announced by the Minister of Finance and Economic Development on 26 November 2020. These measures have been promulgated as contained in Finance (No. 2) Act 2020 (No. 10 of 2020) gazetted on 31 December 2020. Significant measures include:

  • introducing a new three-tier VAT on the export of medicinal cannabis at rates of 10%, 15% and 20% for the respective tiers;
  • exempting real estate investment trusts from income tax subject to certain conditions;
  • broadening the scope and coverage of the presumptive tax regime to encompass specified professions, such as medical specialists, engineers, lawyers, architects and realtors, as well as micro and small enterprises and informal operators; and
  • introducing new pay-as-you-earn tax rates.

Sources include IBFD’s Tax Research Platform; www.allafrica.com; http://tax-news.com