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13.2. Thin-capitalization and other Restrictions to Interest Deduction

Effective 1 January 2019, interest expenses incurred on loans granted by shareholders or other related parties are deductible subject to the following cumulative limitations:

  • The quantum of the debt does not exceed the share capital of the debtor company (except for holding companies);
  • The interest expense does not exceed 30% of earnings before interest, tax, depreciation and amortization (EBITDA);
  • The interest rate should not exceed the average rate of the central bank of West African countries increased by three (3) percentage points;
  • The loan is repaid within 5 years of availing the loan; and
  • The share capital of the company is fully paid-up.