Worldwide VAT, GST and Sales Tax Guide
Fixed establishment. There are three distinct noncumulative criteria in IC to evidence the existence of a permanent establishment, as follows:
• Fixed place of business
• The dependent agent
• The full business cycle
Non-established businesses. A “non-established business” is a business that has no permanent establishment in the territory of IC. When a non-established business conducts taxable operations in IC, these operations are treated as taxable thereon. The tax is paid by the representative, who acting on behalf of the nonresident entity or by the purchaser or beneficiary of the service, is solidly responsible for the payment.
Tax representatives. As mentioned above, non-established businesses should nominate a tax representative for VAT purposes in IC. In the case of default (nonpayment of VAT due within the legal deadline), the beneficiary of the services and the non-established business are jointly liable for the payment of the VAT due.
Reverse charge. The reverse-charge mechanism is applicable to the following:
• Whenever a non-established entity fails to nominate a VAT representative
• When a taxable person acquires any provision of services from non-established entities
Domestic reverse charge. There are no domestic reverse charges in IC.
Digital economy. Any taxable person who supplies goods or services digitally (i.e., via the internet) to another taxable person business-to-business [B2B]) or ordinary consumer (business-toconsumer [B2C]) is required to issue an electronic invoice. Such electronic invoices must include an electronic tax stamp Article 6 of the 2025 tax appendix extends the obligation to issue standardized electronic invoices to all VAT taxpayers, regardless of their activity (whether electronic or not).
Online marketplaces and platforms. The operators of online service platforms who do not have a professional establishment or legal representation in IC, but who conduct taxable operations there, are required to proceed with a simplified fiscal existence declaration online and pay VAT on their transactions.
Registration procedures. All IC businesses or foreign entities that have a head office or other establishment in IC must be registered before starting their activities. The submission should be made to the head of the tax authorities.
Deregistration. There is no procedure for VAT deregistration.
Changes to VAT registration details. When there is a change in a taxable person’s VAT registration details, the taxable person must inform the tax administration within 10 days following the change by submitting a new VAT registration certificate to tax authorities with the updated details.
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT, including the zero rate.
The VAT rates are:
• Standard rate: 18%
• Reduced rate: 9%
• Zero-rate: 0%
The standard rate of VAT applies to all supplies of goods or services, unless a specific measure provides for a reduced rate, the zero rate or an exemption.
Examples of goods and services taxable at 0%
• Exports of goods and services, such as:
– Services provided for direct needs of maritime commercial vessels, vessels used for industrial activity on the high seas, and rescue and assistance vessels at sea
– Sales operations of gear and fishing net, as well as the search of all items and products intended for boats engaged in professional maritime fishing
Examples of goods and services taxable at 9%
• Milk (excluding yogurts and any other dairy products)
• Infant milk and composite food preparations intended for infants
• 100% durum semolina-based pasta
• Solar energy production equipment
• Petroleum products
Examples of exempt supplies of goods and services
• Book sales and book-making work
• Sales of newspapers and periodicals
• Sales of medicines and pharmaceuticals, as well as materials and petrochemicals
• Sales of natural food products for consumption in IC, with the exception of luxury rice and meat imported outside ECOWAS. At the time of preparing this chapter, the draft annual financial statement for 2024 plans to limit this exemption to the essential products listed below. This statement has not been finalized and enacted.
– Corn, millet, sorghum, fonio, wheat and rice, with the exception of luxury rice and other cereals
– Cassava, sweet potato, yam, potato, tarot and other tubers and roots
– Beans, soya, sesame, peanuts, peas and other legumes
– Onion, tomato, eggplant, okra, pepper and other vegetables and market garden products
– Shell eggs
– Fresh meat and offal, with exception of luxury meat
Smoked, salted, refrigerated, or frozen meat and offal consumed in IC
Table salt, Live yeast,
Bananas, oranges, and other natural fruits produced locally
– Unprocessed fish (fresh, smoked, salted or frozen), excluding luxury fish – Unprocessed milk
• Teaching activity excluding incidental operations such as sales of goods, housing supplies and food in boarding schools
• Sales of bread, cereal flours and cereals for the manufacture of these flours
• Fish freezing operations
Option to tax for exempt supplies. The option to tax exempt supplies is not available in IC.
E. Time of supply
The time when VAT becomes due is called the “time of supply.” According to the Ivorian Tax Code, the tax requirement varies depending on whether it is a supply of goods or services. The basic time of supply for goods is when goods are delivered or when the invoice has been issued, even if the goods have not yet been delivered according to the tax doctrine. The basic time of supply for services is when the price of services was fully or partially settled.
However, for intragroup services, the tax is due after two years even if the invoice has not been paid. The two-year period begins to run from the time the transaction is recorded in an expense account or the credit of a third-party account.
Deposits and prepayments. The time of supply rule for deposits and prepayments varies for supplies of goods and services. For supplies of goods, the time of supply for deposits and advanced payments is when the goods are delivered. For services, the time of supply is the date on which the price or a part of the price is paid to the service provider.
Continuous supplies of services. The time of supply for continuous supplies of services based on agreements foreseeing successive payments is when the price or a part of the price is paid to the service provider.
Goods sent on approval for sale or return. The time of supply for supplies of goods sent on approval for sale or return is when the goods are delivered. If the goods are returned to the seller or not sold, the seller can record a provision or debit as an expense.
Reverse-charge services. The time of supply for supplies of reverse-charge services is when the price or part of price are paid. However, for intragroup services, the tax is due after two years even if the invoice has not been paid. The two-year period begins to run from the time the transaction is recorded in an expense account or the credit of a third-party account.
Leased assets. Since leasing agreements are also considered a continuous supply of services, the time of supply occurs at the time of each payment.
Imported goods. The time of supply for the importation of goods is the moment at which the goods enter customs.
F. Recovery of VAT by taxable persons
A taxable person may recover input tax incurred with acquiring goods and services deemed indispensable for the maintenance of the business. A taxable person generally recovers input tax by deducting it from output tax charged on the supplies of goods or services carried out, as well as tax paid on the import of goods.
Input tax includes tax charged on goods and services supplied, tax paid on import of goods and tax self-assessed on reverse-charge services.
To deduct input tax, goods and services must meet the following conditions:
• Be acquired for the needs of the company
• Is subject to VAT on all or only part of their transactions
• Borne VAT from the supplier or import
• Not be excluded from the right to deduction
• The VAT deductible must be on a supporting document (it can be an invoice, if it is a purchase or service; a customs document, if it is an import)
• VAT must be deducted within 12 months; this period begins to run from the billing date for supplies of goods and from the due date for payment the supply of services.
• VAT deductible must be mentioned on the statements of deductible taxes
• The time limit for a taxable person to reclaim input tax in IC is three years. The reclaiming of input tax from a previous period can be requested over the last three years, plus the year of submission of the request.
Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not used for taxable purposes (for example, goods acquired for private use or services used for making exempt supplies).
Examples of items for which input tax is nondeductible
• Buildings other than:
– Buildings and premises for industrial and similar use
– Administrative and commercial buildings
• Non-utility transport companies that have not opted for their VAT liability
• Taxable persons that do not have professional IC facilities
• Gambling utilities for sales-to-end customers, excluding those made to resellers
• Licensed telephone companies
• Operators of digital platforms
Self-billing. Self-billing is allowed in IC. Taxable persons with turnover greater than XOF3 billion can request the tax authorities to print its own invoices but these invoices must contain all the requirements for a full VAT invoice.
Proof of exports. Proofs of exports will be necessary to identify chain transactions, incoterms used and zero-rating for export. The origin and destination of products if sold or purchased are key drivers for taxability and hence should be passed as data elements. Examples of documentation accepted include airway bills, bills of lading and international transport documentation, custom returns.
Foreign currency invoices. If the invoice is issued in a foreign currency, the total VAT amount should be in the domestic currency, which is the West African Communauté Financière Africaine (CFA) franc (XOF). It is also recommended to mention the currency exchange in the invoice. However, operators of digital platforms are able to declare and pay in foreign currencies such as euros and US dollars.
Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in IC. As such, full VAT invoices are required.
Records. In IC, examples of what records that must be held for VAT purposes include invoices, accounting documents, legal documents, etc.
In IC, VAT books and records must be held within the country. While there is no provision in IC VAT law outlining where records must be held, in practice, VAT books and records must be held within the country and made available upon request of the tax authorities.
Record retention period. All invoices or equivalent documents must be kept by the taxable person for six years.
Electronic archiving. Electronic archiving is allowed in IC. Backup copies of invoices or equivalent documents can be archived on all support media (i.e., paper and electronically). However, records must be available to the tax authorities upon request, in paper format only. These obligations are not applicable to operators of digital platforms.
I. Returns and payment
Periodic returns. VAT returns must be submitted monthly for taxable persons under the normal regime. The normal regime applies to taxable persons whose annual turnover, including all taxes, exceeds XOF500 million.
VAT returns must be submitted quarterly for operators of digital platforms.
VAT returns must be filed together with full payment of VAT. The VAT return and payment of VAT is due by the following dates:
• By the 10th of the following month for industrial, oil and mining companies
• By 15th of the following month for commercial companies
• By 20th of the following month for providers
Periodic payments. Payment of VAT is due by the same deadline for filing (as outlined above).
Taxable persons whose annual turnover is greater than XOF200 million are required to pay the VAT due by bank transfer or automatic debit.
Electronic filing. Electronic filing is allowed in IC, but not mandatory. However, taxable persons with a turnover of greater than XOF150 million are required to file their VAT returns electronically. Taxable persons with a turnover of less than XOF150 million have the option to file their VAT returns by paper or electronically.
Payments on account. Payments on account are not required in IC.
Special schemes. No special schemes are available in IC.
Annual returns. Annual returns are not required in IC.
Supplementary filings. Deductions statement. All taxable persons must include on their VAT return a statement detailing the deductions made. This statement must highlight the delivery of goods and the services provided, as follows:
• Name and the supplier’s taxable persons account number
• Amount of the deductible tax paid by the customer
• With regard to imports, the state must highlight:
– Consumption declaration number
– References to the release issued by Customs
– Amount of VAT mentioned on the release
Correcting errors in previous returns. Taxable persons can correct errors in previous returns under the following conditions:
• Any error of this kind that has not been found by the tax authorities during the last three years.
• The taxable person is not subject to a tax assessment related to such errors.
• The taxable person has not received a notice of tax assessment from the tax authorities.
Subject to the above, a taxable person can correct errors in previous returns by writing to the tax authorities, providing details of errors and previously filed returns. Then the tax authorities will review the corrections, and where it agrees with the corrections, the taxable person must then immediately pay any VAT due from the corrections and a late interest charge (10% of the tax due). However, the taxable person is not charged any additional penalties.
Digital tax administration. There are no transactional reporting requirements in IC.
J. Penalties
Penalties for late registration. A delay in VAT registration is punishable by a fine of XOF1 million.
Penalties for late payment and filings. Whenever a taxable person fails to submit a VAT return after the legal deadline, the late interest is 10% of the tax due. In addition to the penalty, interest accrues at a rate of 1% of the amount due for each additional month or fraction of a month of delay.
Penalties for errors. Whenever the tax administration finds errors in filed VAT returns, the taxable person must pay, in addition to the late interest charge outlined above, increases of the following:
• 30% if the amount of duties corresponding to inadequacies, inaccuracies or omissions does not exceed one quarter of the duties actually owed
• 60% if this amount is more than a quarter of the fees real due
Increases are only applicable in the case of a tax audit, and late interest is applicable in the case of spontaneous returns.
The late notification or failure to notify the tax authorities of changes to a taxable person’s VAT registration details to may result in a penalty of XOF100,000. For further details, see the subsection above Changes to VAT registration details.