Malabo Accounting

Tips

Tax law can be complex.  There's much to know to be sure you're doing all you can to get what you deserve.  Here are some personal and business tax tips to get you started.  We update this information regularly, so check back soon for new tips.

Personal Tax Tips

Tax Subjects--The following will be subject to income tax on individuals
  • Through personal duty
  • Through real duty

Exemptions--The following will have a provisional exexmption:

  • Individuals whose annual income is lower than 1,000,000 Francs CFA.
  • Individuals included in categories b, c, and d, of artcile 172, will be subject to the piecework system, except when they opt for the actual profit taxation system.

Article 172
Income tax on individuals is a levy of a general, direct, personal, periodic, and progressive nature that taxes the net global income of individuals obtained in Equatorial Guinea, stemming from different sources.
The global income will be constituted by the total income from the following categories or sources:
        a) Income from real estate assets, including capital gains.
        b) Profits from industrial, commercial and handicraft activities.
        c) Profits from farming operations.
        d) Profits from non-commercial professions and the income related to them.
        e) Wages, salaries, fees, bonuses, life annuities and other related ones.
        f) Income from investments, including capital gains.

Calculation of Tax--IRPF
Individuals residing in Equatorial Guinea will be subject to the personal tax in their respective taxable category.

Income tax on individuals will cover the total taxable net annual income received in excess of the exempt amount as set in the following table:
Taxable Annual income                                                           Lien                        Tax
From        0                       to            1,000,000                         0%                         Exempt
From        1,000,001         to            3,000,000                         10%                       200,000
From        3,000,001         to            5,000,000                         15%                       500,000
From        5,000,001         to          10,000,000                         20%                    1,500,000
From      10,000,001         to          15,000,000                         25%                    2,750,000    
From      15,000,001         to          20,000,000                         30%                    4,250,000
Over       20,000,001                                                                 35%

The tax debt of income tax on individuals is calculated by applying the taxes established accoring to the annual income, after applying all benefits anda deduction of 20% respective to professional expenses as determined in articles 219, 220 and 221 of the law.

Calculation of the Withholding Tax--10%
The Withholding Tax will apply to individual not residing and/or registered in Equatorial Guinea.  Salaries or daily wages per item work that are paid to individuals as fair compensation of their work for others will be subject to a single tax of 10% and declared to the Tax Administration.


Business Tax Tips

Tax subjects-- The following shabe tax subjects:

  • Through personal duty to contribute, companies and coorporations residing in Equatorial Guinea.
  • Through real duty, taxpayers who, although not residing in Equatorial Guinea, receive income coming from the country.

Exemptions, Rebates and advantages

Exemptions-- The following are exempt from Corporate tax:
  • Cooperatives of production, processing, conservation and sales of agricultural products and their associations, which operate to the legal provisions governing them with the exception of the operations designated below:
    • Processing operation of products or byproducts that are different than the ones used for human and animal food or that might be used as raw materials in agriculture or industry.
    • Transactions made by the above-mentioned cooperatives or associations with those that are not associated.
      • Agricultural unions and supply and purchasing cooperative that operate pursuant to the provisions governing them.
      • Mutual agricultural credit unions.
      • Corporations and associations of corporations of mutual assistance.
      • Profits obtained by non-profits associations that organize, with common cooperation or that of local public agencies.
      • Trade fairs, exhibitions, sports meetings or other public demonstrations belonging to the objectives dfined by their Articles of Association with a specific economic and social interest, as long as the time is restricted.
      • Limited companies of an individual or family nature whenever the taxable profits are lower than the minimum set forth in article 192 of the law.
      • Local communities as well as their administration of public services.
      • Recognized public utility corporations and agencies in charge of rurual development.
      • Cooperative societies for schools recognized as mutual school societies.
      • Clubs and private societies of a recreational or cultural nature, whenever their activities are not a bar or a restaurant.
Rebates--
Societies that have their management headquarters and effective centralization of the operation of the company in District administration centers not on the coast, including Annobon, will receive a rebate of 50% in the levy.

Activities dealing wit the extraction of raw materials of forestry, mining, hydrocarbons, energy generation, mineral and non-mineral water, emergent or obtained from drilling and fishing cannot be included in the rebate.


Advantages--
Legal entities which, for the execution of their activities, abide by the requirements provided for the investment of the law, and they report to the Tax Administration, will be able to profit by the tax advantages in the conditions envisaged by the law.

Article 192--Piecework System
The taxable profit will be set per item regarding taxpayers of all categories, whose annual turnover does not exceed the following limits:
        a) 30,000,000 francs CFA. per annual for individuals engaged in the rendering of non-commercials, agricultural, industrial and 
            construction services and activities.
        b) 15,000,000 francs CFA. per annual for individuals engaged in commercial activities and liberal professions.
        c) 12,000,000 francs CFA. per annual for individuals engaged in jobs for others, both in the publiv as well as in the private sector.

Nothwithstanding, individual companies whose turnover is lower than the limits envisaged in the preceding point are not subject to the rules governing the piecework system except when their turnover has been lower than these limits during three consecutive fiscal years of twelve months. 

This list is far from exhaustive.  Call us or send us an inquiry today to set up a time to discuss your specific situation and needs.

 

 

 

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