CÔTE D’IVOIRE Law and Practice Contributed by: Innocent Kouakou, Assemian Kouakou, Francky Lukanda and Lonzo Colombe, Ofori Conseils Africa LLP
5.3 Capital Gains of Non-Residents Capital gains realised by non-residents from the sale of shares in a local entity are, subject to applicable tax treaties, subject to IRVM at a rate of 17% where the seller is an individual. In principle, capital gains derived from the disposal of securities by legal entities are recorded as extraordi - nary income and taxed under BIC rules; accordingly, they are not subject to IRVM. In practice, however, the tax administration may seek to apply IRVM to capital gains realised by a non-resident company on the basis that such company is not otherwise subject to BIC in Côte d’Ivoire. 5.4 Tax Implications of Change of Control There are no change-of-control provisions that would trigger tax liabilities or duties in the case of indirect transfers of ownership. 5.5 Formula-Based Income Attribution In general, formulary apportionment methods are not used to determine the taxable income of local sub - sidiaries of foreign companies. Such subsidiaries are taxed on the full amount of profits generated in Côte d’Ivoire. 5.6 Deductibility of Intra-Group Management and Administrative Charges In addition to requiring compliance with the arm’s length principle for intercompany remuneration, the CGI provides that payments made between compa - nies within the same group are deductible for tax pur - poses only within a dual cap of 5% of net turnover and 20% of the local entity’s operating expenses. Furthermore, where the recipient of such payments is located in a low-tax or noncooperative jurisdiction, the deductibility of the amounts paid is limited to 50% of their gross amount, without prejudice to the dual limitation mentioned in the foregoing. 5.7 Restraints on Related-Party Borrowing The following limitations apply to intra-group loans granted by related foreign entities to local subsidiar - ies:
• the total amount borrowed may not exceed the share capital of the local subsidiary; • the total interest paid on such loans may not exceed 30% of the subsidiary’s earnings before tax, interest, depreciation and provisions (tax EBITDA); and • the interest rate applied may not exceed the aver - age lending rate of the BCEAO for the relevant year, increased by two percentage points. Finally, the loan principal must be repaid within five years from the date the funds were made available. 6. Taxation of Foreign Income of Local Corporations 6.1 Foreign Income Exemptions Foreign-source income of a local company is not exempt from BIC, as an Ivorian company is taxed on its worldwide income. However, where such income is derived through a permanent establishment located abroad, it is not taxable in Côte d’Ivoire. 6.2 Non-Deductible Local Expenses Under Ivorian domestic tax law, the deductibility of expenses is subject to traditional criteria, including: • a direct business purpose or connection with the company’s normal management; • the actual nature of the expense and sufficient sup - porting documentation; • an effective reduction in the company’s net assets; and • allocation of the expense to the financial year in which it was incurred. Since January 2026, for an expense to be tax-deduct - ible, it must not only meet these traditional require - ments but also be directly or indirectly linked to the generation of income subject to BIC. This amendment establishes a principle of tax sym - metry: expenses are not deductible where the cor - responding income is exempt or outside the scope of taxation.
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