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10.2. Specific Incentives

The Ivory Coast provides for a number of incentives aimed at the promotion of investment overall as well as focus on the mining, oil, and gas sectors.

The following outlines the main incentives:

General Tax Incentives

Minimum Tax Exemption

Newly formed companies in the Ivory Coast are exempt from minimum tax in their first fiscal year.

Increased Capital Allowances

Plant, machinery and equipment with a useful life of more than 5 years that are used exclusively in manufacturing, agriculture, transportation or storage, may be granted capital allowances at up to double the normal rates.

Mining, Oil and Gas Incentives

Companies operating in the mining, oil and gas sectors are eligible for a number of incentives, including the following:

  • VAT exemption on imports and purchases directly and exclusively assigned to exploration or production activities - the exemption extends to the companies’ subcontractors providing specifically related services
  • Dividends distributed by the license holder are exempt from withholding tax;
  • Exemption from minimum tax during the exploration phase;
  • Employer and payroll tax exemption during the exploration period; and
  • 5 to 8-year tax holiday for corporate income tax, business license duties, and property tax depending on the location of the investment. Effective 8 January 2021, companies holding a mining permit are not eligible for the exemption.

Export incentives and Free Trade Zones

Qualifying export companies and companies in free trade zones are exempt from VAT on exported products or services.

The Investment Declaration Scheme

The Investment Declaration Scheme provides corporate tax exemption for approved investments by start-up companies of XOF 500 million or less. The Tax exemption on profits begins at 100% in the first year and declines over subsequent years based on the location of the entity.

The Investment Approval Scheme

Under the Investment Approval Scheme, a company whose asset investment exceeds XOF 500 million (excluding VAT and working capital) may receive the following benefits if approved:

  • A preferential import duty rate of 5% on equipment
  • Tax exemption on profits beginning at 100% in the first year and declines over subsequent years based on the location of the entity

Incentive to Promote National Ownership

In order to promote national ownership from 2017, dividends paid out by a resident company to a non-resident parent qualify for an exemption from dividend withholding tax for 25% of their amount (See section 8.2.3). Further, the non-resident company will also enjoy an exemption from registration fees on the transfer.

Incentive to Promote Training, Learning and Employment

Companies that train people under an apprenticeship contract (which includes a qualification or professional experience internship contract with individuals) are provided an annual tax credit of XOF 500,000 per person per year, which is increased to XOF 750,000 for disabled persons. Further, small and medium-sized companies providing training under an apprenticeship contract are also provided annual tax credit to the tune of XOF 100,000 per year for companies, which are increased to XOF 150,000 for disabled person.

Incentive to Promote Innovation in Patents and Manufacturing Processes

With a view to encourage small and medium-sized companies to acquire patents and manufacturing processes of the latest generation, an incentive in the form of a tax credit of 30% of the value of the acquisition of new patents and manufacturing processes is provided to small and medium-sized companies.

Incentives for Investment Companies with Fixed Capital

In order to harmonize the taxation of investment companies with fixed capital, a special tax regime for investment companies with fixed capital is enacted wherein the following are exempted:

  • Taxes, duties, and charges in relation to the incorporation, extension, increase, or reduction of capital and dissolution of an investment enterprise;
  • Taxes and duties in relation to the acquisition of shareholdings in the capital of other companies;
  • Income tax and tax on securities for a period not exceeding 15 years from the date of creation of the enterprise;
  • Capital gains tax on the disposal of securities held for a minimum period of 3 years from the date of their acquisition; and
  • Capital gains tax on the disposal of securities reinvested in other securities within 12 months from the financial year of the disposal, regardless of the holding duration.

Incentives for Reinvestment of profits in Ivory Coast

With a view to encourage companies to self-finance their investment, the domestic law provides a reduction in the standard corporate tax rates, if the company reinvests XOF 100 million of its profits for making investments in Ivory Coast.