BURKINA FASO Law and Practice Contributed by: Bobson Coulibaly, Pierre Yanogo, Oumarou Cisse and Diana Woba, SCP Yanogo Bobson
The applicable contribution rate is 5% and is divided between employers and employees on the basis of gross monthly remuneration, excluding reimbursement costs. The employer and the employee each pay 2.5%. Universal health insurance contributions are deducted by the employer and paid to the Caisse nationale d’assurance maladie universelle by the tenth day of the month following the deduction. 5.2 Taxes Applicable to Businesses All commercial companies must pay all taxes due in Burkina Faso unless specific tax provi - sions applicable to a given sector of activity specify an exemption. All commercial compa - nies are therefore subject to the following main taxes. • Corporate income tax (IS). • Tax advances ( Axomptes provisionnels ), which are calculated on the basis of 75% of the IS due for the previous financial year. • VAT. • Income tax on movable capital (IRCM). • Property tax. • Land contribution. • Tax on property income. • Withholding taxes on imports and sales of goods. • Business licence tax. • Local and foreign supplier withholdings. • Single tax on salaries and wages (IUTS). • Payroll tax (TPA). • Capital gains tax on the sale of company shares. • Motor vehicle tax (TVM). • The special contribution on corporate profits after tax to the Fonds de Soutien Patriotique . Burkina Faso has not effectively applied Pillar Two of the OECD’s rules yet. The country has
also not introduced any new taxes to benefit from OECD safe harbour status. 5.3 Available Tax Credits/Incentives The government of Burkina Faso grants VAT tax credits to exporting companies. If the amount of authorised VAT deduction exceeds the amount of tax due on transactions carried out in respect of a given return, the excess constitutes a VAT credit which can be offset against the subse - quent return(s). Unused VAT credits are not refundable in the case of companies exporting taxable goods under the internal system. Tax incentives apply to small businesses regis - tered under the simplified tax regime. Under Arti - cle 196 of the GTC, these companies are exempt from business tax for two financial years from the effective date of the start-up of the business, which is recorded by the tax authorities. If they are members of approved management centres ( centres de gestion agréés ), they benefit from reductions on certain types of tax, such as TPA and income tax. Micro businesses who are members of approved centres de gestion agréé benefit from a 25% reduction in the micro business contribution. Burkina Faso’s Investment Code provides for tax incentives for investment in development projects in specific strategic sectors defined by the Investment Code. For example, during the investment and operating phases, companies can benefit from exemptions from VAT, customs duties and specific direct taxes under Article 34 of the Investment Code and subsequent con - secutive Articles.
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