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Senegal: Living There - Tax Issues

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Living There

INDIVIDUAL TAXATION

Residents in Senegal are liable to pay tax on their worldwide income, irrespective of their nationality. Married couples are generally taxed separately but the head of the family may opt for joint taxation. Under the law, the following can qualify as dependants:

• Spouse with no income of her own
• Minor or invalid children
• Children under the age of 25 who are still studying
• Orphaned or abandoned children cared for by the taxpayer

The tax declaration is due by 1 March in the year following the base year; late submission is punishable by a surcharge of 25%.

INCOME TAX

Taxable income is generally computed by deducting income-generating expenses and other allowable deductions from the gross income.

Income is generally aggregated and taxed at progressive rates. Total taxable income is calculated according to a scale of coefficients which vary according to the taxpayer’s family circumstances:

The taxpayer should add a half (0.5) share for each additional child, with the maximum number of shares is five (5). The taxpayer is entitled to one (1) share for an invalid adult child. An additional half (0.5) share will be given when only one spouse receives income.

The following income tax rates are applied to the taxable income appropriate to one share and the resulting amount is then multiplied by the number of shares appropriate to the taxpayer’s family circumstances in order to calculate the total income tax liability.

Deductions

The following can be deducted from the gross income to arrive at the taxable income:

• Arrears of interest up to a maximum of 5% of net income and with a maximum amount of CFA300,000 (US$640)
• Voluntary pension contributions up to a maximum of 10% of gross salary, emoluments, benefits in cash or kind
• Life assurance premiums up to a maximum of 5% of net income with a maximum amount of CFA200,000 (US$427) plus CFA20,000 (US$43) for each child
• Donations to charities and organizations acting in public interest up to a maximum of 0.50% of net income before deduction of charges
• Interests on debts incurred by the taxpayer for the acquisition, maintenance, and repair of his principal place in Senegal

Some categories of income, such as income from real estate, are taxed at flat rates.

RENTAL INCOME

Rental Income Tax

Income from real estate is taxed at a flat rate of 20% on net income. In computing for the taxable income, the following can be deducted:

• costs incurred in the repairs or maintenance of the property,
• property tax paid by the owner in respect of developed land,
• interests on borrowings in relation to the acquisition, maintaining or repairing the property,
• and 20% of the gross rental income for depreciation and insurance

Value Added Tax (VAT)

VAT is generally payable on rental income, at 18%. However, rental of unfurnished properties for residential purposes are exempted from VAT.

CAPITAL GAINS

Capital Gains Tax

Capital gains tax is levied at a rate of 15% on the net gains realized from the sale of developed and undeveloped land. The seller or the owner of the property is held liable for this tax.

In computing for the taxable capital gains, acquisition cost, registration costs, expenses on the improvements or repairs are deductible from the selling price. In addition, the acquisition price will be increased annually by 1% starting from the fifth year of holding the property and by 2% annually after a 15-year ownership period.

PROPERTY TAX

Property Tax on Developed Land (contribution foncière des proprieties bâties)

This tax is levied on the following types of property: houses, factories, all buildings constructed in stone, wood, steel or brick fixed to the ground, non-cultivated lands intended for industrial or commercial use and, in general, all similar commercial or industrial installations. The property owners are liable to pay for this tax. The taxable value is the property’s rental value.

Property tax is levied at a rate of 5% for all immovable properties except factories, and factories and similar industrial establishments are taxed at 7.5%.

Property Tax on Undeveloped Land (contribution forfaitaire des propriétés non bâties )

All land situated in urban or metropolitan areas which is either undeveloped or developed with buildings not fixed permanently on the property is taxable. The tax is levied at 5% of the taxable value (which is computed as 5% of the property’s market value).

Senegal - more data and information

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