Corporate tax, like income tax, can be easily diminished by using certain levers put in place by the legislator or practice. We are talking about tax optimization all the legal means to reduce its taxation.
Tax optimization: 8 tips to pay less corporate tax: the deduction of current charges
For corporate tax purposes, most of the expenses in the company’s interest are deductible (except as provided by law, such as sumptuary expenses).
Many companies do not necessarily know which charges can be deducted from their result and thus fail to optimize their tax situation.
In addition, the legislator sometimes gives several methods of taking account of the charges, by making available a scale for example. It should be determined which method is most advantageous, even if it proves to be more complex to use.
Tax optimization: 8 tips for paying less corporate tax: creating payloads and putting manager-related expenses into benefits in kind
In terms of tax optimization, we must create loads to bear on behalf of the company, even if the cash flow is not yet made. Some examples:
- The fuel used must be used via a card on behalf of the company (billing to the company at each reload)
- The benefits in kind of the manager (water, electricity, rent, telephone, fuel, gardeners, maids) must be included in the contract of employment even if the latter must enter the taxable base of the IR. However, the economy of IS generated by the creation of these deductible expenses for the company would supplant the IR supported and paid during the taxation year.
- Service and function vehicles must be in the company’s name, so that their costs of repair, insurance, maintenance and depreciation will be deductible for the company.
- Please ensure that all invoices are in the name of the company and that the supplier opposite has the ninea and that all the mandatory entries required by the art 457 of the CGI are there.
Tax optimization: 8 tips for paying less corporate tax: the professionally-supported expenses of the manager
The manager of a company must prepare notes of expenses (professional expenses borne by him on behalf of the company) which he has the possibility of being reimbursed by the company (mention must be made in his contract of employment in this sense).
Tax optimization: 8 tips to pay less tax on companies: to work with people of the formal (with a COFI in good form) for an optimum recovery of VAT or who are individual company having opted for the TOU
Tax optimization: 8 tips to pay less corporate tax: the deduction of financial expenses
This is one of the levers of tax optimization that some companies with subsidiaries can use.
For example, many companies have reduced their taxable income by deducting the interest from borrowings from related companies (intra loans) or to make certain investments, such as acquiring the securities of a target company.
The situation can be optimised thanks to the use of the tax integration scheme, allowing the deficits of certain companies to be imputed to the profits generated by other entities (option for the parent-subsidiary scheme).
Tax optimization: 8 tips for paying less corporate tax: the proper use of deficits
The use of reportable deficits (forward or backward) is a good way to reduce its corporate tax.
Some companies even have a very large “stock” of deficits that allow them not to pay for is for several years.
Tax optimization: 8 tips to pay less corporate tax: credits and tax cuts
As in the case of income tax, the legislator has provided a very large number of credits and tax cuts to reduce the.
They come to support certain expenses and may in some cases prove to be very interesting.
So, we can cite the following tax advantages:
- Tax reduction for investment of profits in Senegal (ART 232 to 239 of the CGI),
- Tax reduction on BIC, BNC and BA for investment in the field of solar or wind energy (CGI ART 240 to 244-30% of the sums paid for eligible investments);
- Tax reduction for income investment in Senegal;
- Investment Tax Credit (Art 249 to 252 of the CGI) for companies that realize at least 100 million of investment or for an SME if the investments are greater than 15 million: Reduction equal to 40% of the amounts invested, capped at 50% of taxable profit (70% in non-Dakar regions) and is Display Over 5 years (Possibility To spread it over 5 years from the following year the closing of the investment Programme)
- Export Tax reduction (ART 253 of the CGI): reduction to 50% of taxable profit for industrial, agricultural and Tele-Services Which export 80% of their production (excluding mining and oil companies).
Tax optimization, 8 tips to pay less corporate tax: exemptions
There are two types of IS exemptions:
- Those Relating to certain incomes,
- Those relating to certain entities.
Thus some income is expressly exempt from corporate tax (after reintegrating a share of expenses and charges in some cases). This is the case for certain capital gains (e.g. on equity securities) or intra dividend distributions (option for the parent-subsidiary plan).
In addition, certain entities fulfilling strict conditions see their result (or a share of their income) exempt from corporate tax. These include innovative young companies or companies located in certain areas of the territory (export processing companies, mining code approval, approval of the investment code).
Tax optimization, 8 tips to pay less tax on companies: join the approved Management center of Dakar or regions if you are an SME-TPE
CGA members benefit from the following tax benefits:
- A 15% reduction on the taxable basis for companies, i.e. a tax rate of 25.5% instead of 30% for non-members;
- A 15% reduction based on the IR for natural persons;
- The Payment of VAT to the collection.