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Senegal - Indirect Tax Guide

Senegal - Indirect Tax Guide

Explore the requirements and rules that apply to indirect taxes in Senegal.

Explore the requirements and rules that apply to indirect taxes in Senegal.

Boats and ships in lake

General

Types of indirect taxes (VAT/GST) (Article 351)

VAT.

What is standard VAT/GST rate? ( Article 369)

18 percent.

Are there any reduced rates, zero rates or exemptions?

Exempt supplies include: ( Article 361)

  • banking, insurance and reinsurance (specific taxes apply)
  • international transport 
  • health care 
  • care provided by members of the medical and paramedical profession
  • food products of first necessity
  • farming activities
  • education
  • employment activities
  • materials financed through Islamic Finance
  • butane gas for domestic use
  • real estate transfer (special registration fee applies)
  • press publications 
  • original artworks
  • international traffic 
  • deliveries and services made on behalf of the holder of the mineral substances and oil exploration permit
  • renewable energy.

No zero-rate applies. Exporters may deduct input VAT and obtain a reimbursement of the corresponding credit, provided certain conditions are met.

The reduced rate of 10 percent applies to accommodation and catering provided by a tourist accommodation establishment. (Article 369)

What is the general and specific place of supply rules, if applicable?

There are no specific place of supply rules.

VAT/GST registration

Who is required to register for VAT/GST?

(Article 354)

Companies carrying out economic activities must be registered. The tax identification number will be valid and used for all taxation purposes.

Article (353)

Voluntary registration is permitted for farmers for their own production and for authorized public transporters using tariffs approved by the public authority.

Is voluntary VAT/GST registration possible for an overseas company? (Article 355)

No.

Does an overseas company need to appoint a fiscal representative? (Article 355)

Yes.

Is VAT/GST grouping* possible?

No.

VAT/GST compliance

How frequently are VAT/GST and other indirect tax returns submitted? (Article 363)

Monthly on the 15th day of the following month.

Can returns be filed and payments be made electronically?

Yes.

What are the exchange rate rules?

Invoices in foreign currency are converted at the exchange rate applicable on the date of the invoice.

VAT/GST recovery

Can an overseas company recover VAT/GST and other indirect taxes if not registered for VAT/GST locally?

No.

Is it a prerequisite that output tax be charged before input tax can be claimed?

No.

Are there any exemptions with the right to recover or deduct input VAT? ( Article 383)

Input VAT cannot be deducted on the following:

  • passenger vehicles
  • restaurant and housing expenses
  • supplies for no consideration or for less than its normal price (except if the value doesn’t exceed 20,000 CFA franc (XOF))
  • advertising costs of goods and services where advertising is prohibited
  • furniture (except office furniture)
  • foreign services where the beneficiary of the payment is not liable for income tax in Senegal on such revenue
  • services relating to goods excluded from the right of deduction.

Input VAT has to be apportioned if the expense was incurred for the making of both exempt and taxable supplies.

For what period of time may input tax not previously claimed be claimed (i.e. prescription)? (Article 391)

2 Years.

Where a VAT return reflects a refund due to the taxpayer, is the refund paid to the taxpayer or is the taxpayer required to utilize the refund as a credit against future payments? (Article 375)

Taxpayer is required to utilize the refund as a credit against future payments.

Invoices

Is a business required to issue tax invoices? (Article 375)

Yes.

Is it possible/mandatory to issue invoices electronically?

No.

Is it possible to issue recipient-created tax invoices?

No.

Audits

Do tax audits take place on a regular basis? (Article 568)

Audits take place at the discretion of the tax administrator.

Are audits done electronically in your country/territory (e-audit)? If so, what system is in use? (Article 568)

No. The control is done based on returns submitted or on site.

What penalties can arise from non-compliance? (Article 667 and 671)

For late or non-submission of returns: a penalty of XOF200,000.

For late or non-payment of tax due: a penalty of 50 percent of amount to be paid.

Special indirect tax rules (Article 134)

Are there unique country/territory-specific indirect tax rules that differ from 'standard' indirect tax rules in other jurisdictions?

Small retailers, whose turnover does not exceed XOF50 million for the supply of goods or services, can pay a fixed tax rate in full discharge of other taxes.

A specific tax is levied in respect of a stay in a hotel: XOF1,000 per night.

Does a reverse charge mechanism apply? (Article 141)

Yes.

Can VAT on reverse charges be claimed as input tax, to the extent that the expense on which the reverse charge VAT is accounted for, is used for taxable purposes?

VAT on reverse charges can be claimed as input tax if the following two conditions are satisfied: 

  • the payment made to the non-resident for the services provided is liable to withholding tax in Senegal, and
  • there is proof that payment has been made to the tax authorities in respect of the reverse charge.

Can non-residents appoint local agents in order to avoid reverse charge VAT by virtue of charging standard rate VAT and accounting for such VAT through the agent? (Article 355)

Yes. The non-resident can appoint a local agent for the VAT payment. If a local agent is not appointed, the local recipient is required to make the VAT payment.

Are there indirect tax incentives available (e.g. reduced tax, tax holidays)? (Article 373)

Not in general. However, some sectors such as oil and gas and mining companies are eligible for a VAT holiday subject to certain conditions.

Rulings

Is it possible to apply for formal or informal advance rulings from the tax authority?

Yes.

Are rulings and decisions issued by the tax authorities publically available?

Yes, these rulings can be viewed on the following link: Direction Generale

Other indirect taxes

Are there other indirect taxes not commented on above?

Yes, other indirect taxes include:

  • import duty
  • excise duty
  • tax on financial activities.

For further information please contact

Ndiaga Sarr
Senior Partner
KPMG in Senegal
T: + 221 77 638 40 94
E: ndsarr@kpmg.sn

Footnote

*By ‘grouping’ we mean: either a consolidation mechanism between taxpayers belonging to the same group (payment and refund are compensated but taxpayers remain distinct) or a fiscal unity for VAT/GST purposes (several taxpayers are regarded as a single taxpayer).

Disclaimer

All information contained in this document is summarized by KPMG in Senegal, a member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

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