Tax laws Gabon
Gabon’s tax system is structured to align with both domestic needs and international standards, focusing on promoting economic growth, especially from oil and mineral resources. Here's an overview of Gabon’s tax laws:
1. Personal Income Tax (PIT)
- Progressive Tax Rates: Gabon applies a progressive personal income tax system based on annual income. The rates are:
- 0% on income up to XAF 1,500,000 (approx. $2,600).
- 10% on income between XAF 1,500,001 to 3,000,000.
- 15% on income between XAF 3,000,001 to 6,000,000.
- 20% on income between XAF 6,000,001 to 12,000,000.
- 25% on income over XAF 12,000,000.
- Exemptions: There are certain exemptions for income from specific sectors (like agriculture or certain business activities), and deductions can be claimed for dependents and certain expenses.
2. Corporate Income Tax (CIT)
- Standard Rate: The corporate income tax rate in Gabon is 30% on taxable profits for most companies.
- Oil and Mining Companies: Companies involved in the extraction of oil, gas, and minerals are subject to special tax rules. They typically pay higher rates and must comply with specific royalty and production-sharing agreements with the government.
- Small Enterprises: Gabon offers incentives and tax breaks for small and medium-sized enterprises (SMEs) and businesses in certain sectors, such as agriculture, tourism, and forestry.
3. Value Added Tax (VAT)
- Standard VAT Rate: Gabon has a standard VAT rate of 18% on most goods and services.
- Reduced Rates: There are reduced VAT rates for certain essential goods and services, such as food, medicines, and healthcare.
- Exemptions: Exports of goods and services are exempt from VAT, and businesses can claim VAT refunds on qualifying expenses.
4. Social Security Contributions
- Social Security: Employees and employers contribute to social security for health insurance, pension, and other social welfare programs.
- Employer Contributions: Employers pay approximately 16.5% of the employee’s salary.
- Employee Contributions: Employees contribute around 4% of their salary.
- Other Contributions: There are additional contributions for work-related injuries and unemployment benefits.
5. Property Taxes
- Land and Property Tax: Property owners are subject to land taxes, which are assessed based on the value of the property. These taxes vary depending on the location and type of property.
- Tax on Real Estate Transactions: A transfer tax is levied on the sale of property. This tax typically ranges from 3% to 5% of the sale price.
6. Environmental Taxes
- Pollution and Environmental Taxes: Gabon has introduced various taxes to promote environmental sustainability, especially in sectors like mining and oil extraction.
- Carbon Tax: Gabon is working toward introducing a carbon tax to address environmental issues related to its oil industry.
7. Wealth Tax
- Wealth Tax: Gabon does not have a specific wealth tax, but high-income individuals and businesses may be subject to higher personal income taxes based on their earnings and property.
8. Customs and Import Duties
- Customs Duties: Gabon imposes customs duties on imported goods, with rates varying based on the type of goods. The duty rates range from 5% to 40% on most items.
- Exemptions: Some goods, particularly those used for production or development projects, may qualify for exemptions or reductions in duties.
9. Double Taxation Agreements (DTAs)
- DTAs: Gabon has entered into double taxation agreements with various countries, especially with nations that have business ties to Gabon, like France. These agreements help prevent double taxation on income and provide for tax credits or exemptions for foreign taxes paid.
10. Inheritance and Gift Tax
- Inheritance Tax: Gabon imposes inheritance taxes based on the value of the estate and the relationship between the deceased and the heir. The rates vary, with closer relatives (spouse, children) receiving preferential treatment.
- Gift Tax: Gifts are also taxed based on the relationship and the value of the gift. Certain gifts may be exempt or reduced if they fall within family exemptions.
11. Tax Incentives
- Gabon provides tax incentives for businesses that focus on economic development, especially in agriculture, tourism, forestry, and mining.
- Investment Code: The Gabonese Investment Code offers tax breaks and other incentives to businesses that set up operations in certain regions or sectors of the economy.
- Free Zones: Certain economic zones, such as the Gabon Special Economic Zone, offer favorable tax conditions, including tax holidays and exemptions.
12. Other Taxes
- Excise Taxes: Gabon levies excise taxes on certain goods, including tobacco, alcohol, and fuel.
- Banking and Financial Transactions Tax: A small tax may be levied on financial transactions conducted through local banks.
Conclusion
Gabon’s tax system is aimed at supporting the country's economic growth, especially from its oil and mineral resources, while providing incentives for businesses in sectors like agriculture and tourism. Personal and corporate income taxes, VAT, and social security contributions are the primary taxes in Gabon, along with various import duties, inheritance taxes, and environmental taxes. The country also offers tax incentives to encourage investments in key sectors and follows international norms with double taxation agreements.
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