In accordance with the article 92-1°a) of the Ivorian Tax Code : « Are subjected to tax on non- commercial profits, inatural person or legal entities residing out of Côte d’Ivoire, on the payments they received for services used or provided in Côte d’Ivoire. »

However, in practice, we observe that many taxpayer doesn’t fulfil this obligation.

This memorandum is intended to give more details about the mechanism of such witholding tax.

I. Taxable income

· Condition no 1 : Payment shall be from ivorian source

Payment must be exclusively effectuated by companies located in Côte d’Ivoire for services used or provided in Côte d’Ivoire.

Services are considered as "provided" in Côte d’Ivoire when they are materially carried out (i.e : repair and maintenance of equipment, technical assistance etc.).

Services are considered as "used" in Côte d’Ivoire if the location of the effective use is in Côte d’Ivoire.

· Condition no 2 : Payment must be done to natural person or legal entities living out of Côte d’Ivoire

Payment must be done to natural person or legal entities which are located out of Côte d’Ivoire.

Indeed, WHT is only applicable to natural person or legal entities which are not subjected to corporate tax in Côte d’Ivoire.

II. Taxable basis, rate and payment

· Taxable basis

The taxable basis is the gross amount of sums paid (excluding taxes).

· Rate

The common rate applicable is 20% of the gross amount paid (Art 92-d) Tax Code).

Reinsurance companies benefit from a special rate of 12,5%.

· Payment

WHT must be paid and declared to ivorian tax administration by the one who is in charge of the payment.

Tax return and payment must be done by the 15th of each month according to the payment made during the previous month.

IN CASE OF SIGNATURE OF TAX TREATIES WITH CÔTE D’IVOIRE

In certain case, companies residing out of Côte d’Ivoire can be exempted of payment of WHT. Indeed, if these companies are located in countries bound by a tax treaty with Côte d’Ivoire, only royalties1 are subjected to WHT.

In general, tax treaties signed by Côte d’Ivoire restrict to 10%, the rate of WHT applicable to royalties.

So far, Côte d’Ivoire has signed tax treaties with the following countries and organizations⁽²⁾:

• Germany
• Belgium
• France
• Italy
• Norway
• United kingdom / Nothern Ireland
• ECOWAS

⁽¹⁾The concept of "royalties" is defined and specific to each tax treaty.

⁽²⁾A memo of Ivorian tax administration states that Economic and Monteray West African Union and Malagasy-African Common Organization treaties are obsolete.