senegal-vat

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Worldwide VAT, GST and Sales Tax Guide

• The term PE includes in particular:

– Place of management

– Branch

– Office

– Factory

– Workshop

– Mine, oil or gas well, quarry or other place of extraction of natural resources

– Extraction of natural resources

• A construction or assembly site lasting more than 12 months

However, where a double tax treaty (DTT) exists between Senegal and the country of residence, the determination of PE will depend on the criteria and conditions set out in the DTT.

Non-established businesses. A “non-established business” is an enterprise which does not have a permanent professional establishment (i.e., a PE, see the Fixed establishment subsection above) in Senegal through which it provides services or supplies goods. Such an establishment cannot be registered for VAT in Senegal.

However, when a non-established business conducts taxable operations in Senegal, these operations are treated as taxable. For transactions taxable under VAT in Senegal, a non-established business must either appoint a tax representative to carry out the VAT formalities or the tax is paid by the beneficiary of the service. However, for B2C digital services, non-established business may need to register on an online platform. See the subsections Tax representatives and Reverse charge below.

Tax representatives. As mentioned above, non-established businesses are required to nominate a tax representative for VAT purposes in Senegal. The tax representative must be accredited by the territorially competent tax department and a taxable person identified for VAT in Senegal.

In the case of default (nonpayment of VAT due within the legal deadline), the designated representative is responsible for the payment of the VAT due.

If a tax representative is not appointed, VAT and penalties are payable by the beneficiary of the taxable transaction, i.e., the customer (also called “reverse VAT” [TVA pour compte]). In practice, tax representatives are not usually designated by foreign suppliers because the reverse-charge mechanism (see section below) generally applies, especially for B2B transactions. However, the lack of nomination of tax representatives and VAT not being paid on B2C transactions has led the tax authorities to establish an online VAT registration platform especially for foreign suppliers of digital services (see Simplified VAT registration below).

Reverse charge. The reverse-charge mechanism applies when a Senegalese taxable person receives a service from a non-established business that does not have an accredited tax representative in Senegal. This is only applicable on business-to-business (B2B) supply.

Domestic reverse charge. There are no domestic reverse charges in Senegal.

Digital economy. Nonresident providers of digital services are now required to register and account for VAT in Senegal.

In accordance with article 2 of the Ministerial Order No. 006775 of 21 May 2024, implementing the provisions of Article 355 bis of the SGTC concerning VAT on digital services provided by foreign taxable persons, nonresident providers of digital services supplied to businesses and individuals are now required to register and account for VAT on supplies that are deemed taxable in Senegal. The tax administration has set up an online portal dedicated to VAT registration.

For B2B transactions, the reverse-VAT mechanism still applies in the event that the foreign supplier is not properly registered. B2B clients must verify whether the foreign supplier is part of the list of registered foreign digital services suppliers published by the administration.

Any taxable person who supplies goods or services digitally (i.e., via the internet) to another taxable person (i.e., B2B) or ordinary consumer (i.e., B2C) must also issue a standardized electronic invoice (see Section H. Invoicing).

Digital services are defined as the supply of intangible goods or services carried out in an automated manner on a computer and/or electronic network. Intermediaries are those involved in online sales digital platforms, marketplaces or online marketplaces that bring together suppliers and marketplaces which bring together suppliers and their customers to enable them to conclude transactions using information technology.

There are no other specific e-commerce rules for imported goods in Senegal.

Online marketplaces and platforms. The above rules for the digital economy also apply to online marketplaces and platforms.

Registration procedures. All Senegalese companies or foreign entities that have a PE in Senegal must be VAT registered (and effectively for all taxes) before commencing taxable activities in Senegal, or at the latest within 20 days of opening the establishment or commencing their activities.

The application for registration must be made physically to the head of the relevant tax department (the one in the place where the business is located).

The documents and information below must be attached/mentioned to the application letter:

• National identity card for partners of Senegalese nationality

• National identity card or passport for partners of foreign nationality

• Certificate of Registration in the Companies Register (registre du commerce et du crédit mobilier [RCCM])

• Company name

• Bank details

• Title deed or duly registered lease contract

• Legal form and statutes

• Tax stamp of XOF2,000

It takes no more than one month to receive the tax ID number from the tax authorities.

Simplified VAT registration. Nonresident suppliers of digital services and foreign digital platform operators benefit from a simplified remote and electronic registration process. For this purpose, eligible foreign companies must complete the online registration form provided by the tax administration via the following link (https://eservices.dgid.sn/fimfionet). They are required to submit the following documents:

• A copy of the Companies Register (RCCM) or any equivalent document for legal entities

• A copy of the identity card or passport, in addition to the RCCM, for individuals

Deregistration. The only tax deregistration procedure in Senegal is the declaration of cessation of activities that the taxable person must file to the tax authorities.

Changes to VAT registration details. Any substantial change affecting the operations of a taxable person (i.e., change of name of the business, change of activity and/or place of business, cessation of business, change of manager, direct or indirect transfer of shares or change of capital structure or shareholding) must be notified to the DGID. Notifications must be made within 20 days of the change. The notification of the change is carried out by a simple letter indicating the nature of the change to be filed to the tax authorities by the taxable person (with the official documents justifying the change).

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.

F. Recovery of VAT by taxable persons

A taxable person may recover the VAT incurred (i.e., the input tax) on the acquisition of goods and services for the following:

• Normal and necessary operating requirements

• A taxable transaction that is effectively taxed or exempted for exports or similar transactions, the supply of goods and services under the free trade regime and the international transport of goods to a foreign country

The taxable person recovers the input tax on purchases or imports by deducting it from the tax collected on the supplies of goods or services (i.e., the output tax).

The input tax is only deductible by the customer if it is payable by the supplier, service provider or customer who has paid the VAT on its behalf.

To deduct input tax, the taxable person must ensure that the VAT meets the following conditions:

• Appears on the purchase invoices issued by suppliers or service providers, provided that these invoices are correctly worded, contain all the compulsory information outlined in the SGTC and are issued by taxable persons subject to the real tax regime.

• Has been paid on importation by the taxable person or on its behalf and that it holds the customs documents which designate it as the actual recipient of the goods.

Taxable persons shall also be required to meet the following conditions:

• Indicate, for each supplier, at the time of deduction on the back of the VAT return or on an accompanying document:

– Supplier’s tax identification number (Numéro d’Identification National des Entreprises et des Associations [NINEA]) or the number and date of the declaration for release for consumption – Name and address of the supplier

– Nature of the good or service purchased

– Purchase price

– VAT invoiced or paid at customs

– Deductible tax borne

• Justify the effectiveness of the transaction and its use for the purposes of their taxable or deductible operations

Additionally, taxable persons are entitled to deduct all, or part of deductible input tax incurred, depending on the circumstances, which appears correctly on an amending invoice issued to them by their suppliers as a result of an error or an adjustment. However, these invoices must correctly show the amended tax with an indication, if applicable, of the tax initially invoiced or the references of the initial invoice.

The time limit for a taxable person to recover input tax in Senegal is two years. The time limit starts from the acquisition of the goods or services.

Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not used for taxable purposes (e.g., goods acquired for private use or services used for making exempt supplies). In addition, certain transactions subject to VAT are expressly excluded from the right of deduction (see list below).

Examples of items for which input tax is nondeductible

• Costs of accommodation, catering, receptions, shows and the hire of tourist vehicles and passenger transport (with the exception of costs incurred by professionals in the tourism, catering and show business sectors and car dealerships as a result of their taxable activity)

• Costs of advertising goods and services for which advertising is prohibited

• Goods and services acquired by companies, but used by third parties, managers or employees of these companies

Order from the Minister of Finance outlining the application conditions has not yet been published.

Simplified VAT invoices. Certain taxable persons may issue other types of documents other than a full VAT invoice (i.e., nonstandard invoices). These include entry tickets, transport and toll tickets, documents issued by electronic vending machines or electronic systems.

Self-billing. Self-billing is not allowed in Senegal.

Proof of exports. The requirements for invoicing exports are that the invoice must state the following:

• Country of destination

• Names and addresses of the consignees

• Amount of the invoice

It should be noted that exports, being zero-rated, will not be subject to VAT on the invoice. The proof of exports to evidence the zero-rating is provided by the production of export documents duly approved by the customs services. These include, for example, export declarations, air waybills, bills of lading and international transport documents.

Foreign currency invoices. Invoices can be issued in a foreign currency. If done so, the countervalue in the domestic currency, which is the West African CFA franc (XOF), should also be indicated (including the total amount before tax and the collected VAT). It is also recommended that the exchange rate be mentioned in the invoice.

Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in Senegal. As such, full VAT invoices are required.

Records. In Senegal, examples of what records must be held for VAT purposes include accounting books, registers, invoices, VAT returns, proofs of payment, and generally any document used or drawn up for the purpose of VAT reporting in Senegal.

In Senegal, VAT books and records must be held within the country. Such records must be made available upon request of the DGID and provided within a timely manner.

Record retention period. All invoices or equivalent documents must be kept by a taxable person for 10 years.

Electronic archiving. Electronic archiving is allowed in Senegal. Backup invoice copies or equivalent documents may be archived in all support media (i.e., on paper and electronically). However, when invoices and supporting documents are electronically recorded, the taxable person must guarantee immediate, complete, and online access to them at the first request for transmission during an on-site control by the tax authorities.

I. Returns and payment

Periodic returns. VAT returns must be submitted monthly for taxable persons under the normal tax regime. The normal tax regime applies to taxable persons whose annual turnover, including all taxes, exceeds XOF100 million.

VAT returns must be submitted quarterly for taxable persons under the simplified tax regime. The simplified tax regime applies to taxable persons with annual turnover, including all taxes, of between XOF50 million and XOF100 million.

The VAT return and payment of VAT must be made by the 15th of the month following the tax period. Furthermore, a nil VAT return must be filed where the taxable person has not carried out any taxable transactions in each tax period.

Periodic payments. VAT must be paid monthly for taxable persons under the normal tax regime. VAT must be submitted quarterly for taxable persons under the simplified tax regime.

The VAT is due by the same deadline as the filing deadline, which is the 15th of the month following the tax period. For imports, VAT is paid at the time of the chargeable event.

For taxable persons registered with the Direction of Major Companies and the Medium-sized Companies Centre 1, payment of VAT due must be made electronically via the e-TAX platform.

For taxable persons who are registered with other tax offices, payment must be made by cheque deposited at the relevant tax office

Electronic filing. Electronic filing is mandatory in Senegal for all taxable persons. VAT returns and their appendices must be filed electronically on the e-TAX platform for large and medium-sized companies as well as regulated professional companies and in the Mon Espace Perso platform for small companies.

Payments on account. Payments on account are not required in Senegal. However, payments on account are allowed for suspended VAT for taxable persons approved under the Investment Code. The law allows the VAT due to be settled by installments over a period not exceeding 12 months. For further details on the suspended VAT regime, see the subsection Special schemes below.

Special schemes. Normal tax regime. The normal tax regime applies to taxable persons whose annual turnover, including all taxes, exceeds XOF100 million. Under this regime, VAT returns must be submitted monthly.

Simplified tax regime. The simplified tax regime applies to taxable persons with annual turnover, including all taxes, of between XOF50 million and XOF100 million. Under this regime, VAT returns must be submitted quarterly.

Flat tax regime. The flat tax regime (Contribution Globale Unique [CGU]) is optional for taxable persons whose turnover does not exceed XOF50 million. Under this regime, such taxable persons cannot charge VAT. However, the option must be notified to the DGID no later than 31 January of the fiscal year. The option is total and irrevocable. It takes effect from 1 January of the fiscal year.

Suspended VAT regime. The suspended VAT regime consists in authorizing certain taxable persons to acquire goods and services without immediate payment of the VAT due. It therefore has the effect of deferring the liability to pay VAT to a later date. It is neither an exemption nor a revenue write-off but only a deferral payment of VAT over time and without interest. This regime is for taxable persons benefiting from an agreement to the Senegalese Investments Code within the framework of their program of investments and to property promoters engaged in a program of construction of buildings for housing use approved by the Senegalese State. For further details, see the subsection Payments on account above.

Withholding tax. The withholding tax scheme is a special system for settling VAT that consists of the customer withholding the amount of VAT invoiced by its supplier. Thus, contrary to ordinary law, in the context of transactions subject to withholding tax, the VAT is withheld by the beneficiary of the supply or service, who is responsible for paying it back in full to the Treasury. The VAT withholding tax scheme applies when the operations are the subject of contracts paid by the following parties:

• The State, local authorities, public establishments, national companies, companies with a majority public shareholding and operators or concessionaires of public services, in particular water, electricity and telephone services

• Building companies affiliated to the DGE

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