The Togolese Revenue Office (L'Office Togolais des Recettes - OTR) has published an Extract of the Finance Law for 2022 containing the amendments made to the General Tax Code and the Book of Tax Procedures, as well as an overview of the main tax changes. Some of the main tax changes include the following:

• The scope of taxable income considered derived from and taxable in Togo is expanded to include profit from income generated by any activity carried out using electronic platforms located in Togo;
• The permanent establishment (PE) rules are updated in respect of construction PEs, providing that a construction site, assembly or installation project, or supervisory activities related to such project will constitute a PE if such construction site, project, or activities last more than 6 months;
• The deductibility of technical assistance costs (and headquarter expenses) is increased from 20% of taxable income to 25%;
• A new definition of technical assistance costs is added, providing that technical assistance costs are the costs of transferring or supplementing know-how or technology intended to assist in the realization, implementation, or development of a product or technology;
• The limit on the deductibility of objects specially designed for advertising is removed (was 0.3% of turnover);
• The limit on the deductibility of donations made to recognized public utility organizations and associations is increased from 0.5% to 1.0%;
• The capital gains tax rules are clarified in relation to capital losses with the addition of the provision that capital losses resulting from the sale of a property cannot be set off against capital gains realized in the respect of other property;
• A 10% reduction is provided for the taxation of capital gains from the alienation of shares transferred more than two years after their acquisition (full taxation applies if less than two years, as previously provided);
• The tax registration requirement for any natural or legal person that undertakes a commercial activity or any other activity likely to give rise to tax obligations is extended to persons operating electronic platforms and any other form of sales and service activity via social networks, including legal entities and arrangements; and
• A penalty of 50,000 CFA francs is introduced for any natural or legal person that undertakes a commercial activity or any other activity likely to give rise to tax obligations but fails to register for tax at the beginning of the activity or creation of the company.

In addition to the above, several changes are made to clarify and strengthen the transfer pricing documentation requirements:

• The transfer pricing documentation requirement provisions are amended to facilitate the reading of the provisions and avoid any confusion by providing that the local and master file documentation is referred to as "full" (or "complete") documentation, as opposed to the simplified documentation, which is a statement summarizing the transfer pricing policy, related-party transactions, and related parties and is provided with the tax return by companies subject to the full documentation requirements;
• A provision is added to allow the tax authority to request transfer pricing information from companies not subject to the full documentation requirements at any time, instead of only in the context of an audit as previously provided for;
• The provision requiring taxpayers to prepare and make available full documentation within 3 months after the tax return is filed is supplemented to provide that, at the end of this period, the documentation must be submitted at the request of the tax authority (documentation must also be submitted at the beginning of an accounting audit, which is unchanged);
• A provision is added to require companies subject to the full documentation requirements to submit the documentation along with their final return in the event of cessation, suspension, or transfer of an enterprise in whole or in part;
• The transaction threshold for including information on related party transactions in the local file is reduced from 50 million CFA francs to 10 million; and
• A penalty of 500,000 CFA francs is introduced for failing to submit the simplified documentation (statement) with the tax return.

Note, Togo's transfer pricing documentation requirements were introduced from 2020 for companies with annual turnover or gross assets exceeding 20 billion CFA francs. The requirements also apply for companies that directly or indirectly own or control a company exceeding the 20 billion threshold and companies that are directly or indirectly owned or controlled by a company exceeding the 20 billion threshold.