Gabon provides for a number of incentives to encourage productive investment, especially in the areas of oil and mining, tourism, and for new companies.
Companies can receive a tax credit in the amount of 20% of the wages for new employees. The following criteria must be met:
- The creation of 2 positions in companies holding less than 20 employees;
- The creation of 3 positions in companies holding between 20 to 50 employees; or
- The creation of 5 positions in companies holding more than 50 employees.
Under this regime, newly established agricultural, industrial, and mining enterprises are eligible for a corporate income tax holiday of 2 years. In order to qualify, the following conditions must be met:
- At the end of the 3rd fiscal year, the company must have acquired fixed and permanent assets equal to 10 times the amount of profits realized in the same year;
- The investment must not merely be for the development of one or more existing activities;
- The objective of the new enterprise must not be to compete with activities satisfactorily performed by existing enterprises in Gabon; and
- Accounts of the enterprise must be kept in accordance with OHADA accounting standards.
Under this regime, numerous benefits are available for small and medium-sized enterprises and industries (SME/SMI). The benefits include:
- Access to government funding agencies;
- Priority access to the government procurement market;
- Exemption from corporate income tax and custom's taxes on inputs for 5 years;
- Preferential prices/rates for petroleum products, the transport of materials, and equipment, and certain other products;
- Preferential rates for assistance from any authorized State body; and
- State subsidization of interest rates.
In order to qualify for the benefits, several conditions must be met, including:
- The company's headquarters must be in Gabon;
- Activities of the company must be the production, processing, or distribution of goods or services;
- 51% of the equity must be held by Gabonese nationals;
- Gabonese nationals must be responsible for the management of the company;
- At least 50% of the employees must be Gabonese nationals;
- Capital cannot exceed CFA 1 billion;
- Annual turnover cannot exceed CFA 2 billion; and
- The company must maintain an investment program for at least one of the following:
- the Establishment, takeover, modernization, rehabilitation, restructuring, or expansion of activities;
- training of the employees of the enterprise; or
- improve work conditions and the quality of work.
Companies established in the special economic zones of Mandji Island and Nkok are eligible for a number of benefits, including the following:
- A 10-year corporate income tax holiday;
- Reduced corporate income tax at a rate of 10% for 5 years following the tax holiday;
- VAT exemption, including a refund for any VAT paid;
- Custom duties exemption for the importation of equipment and spare parts;
- No restriction on repatriation of funds;
- Increased flexibility for the recruitment of foreign labor;
- Exemption from services tax;
- A 50% reduction on electricity rates;
- Withholding tax exemption; and
- Land tax exemption on the undeveloped property.
Effective 1 January 2020, taxpayers engaged in export activities located in special economic zones may sell 25% of their products in the local market subject to a reduced rate of 2% on the factory value of products.
A special group tax regime applies to resident holding companies that own directly or indirectly at least 50% of the share capital of other resident or non-resident companies provided:
- The company holds directly or indirectly the majority of the voting rights in the other company; or
- Appoints, during two consecutive years, the majority of the members of the board of the other company.
To be eligible for the special regime, the group holding company is required to provide certain services for the benefit of the other companies in the group, such as:
- Any services related to financial, technical, accounting, legal, information technology, human resources, marketing, etc.;
- Research and development activities; or
- Management of intra-group finance.
The following benefits apply to member companies under this regime:
- Capital gains on transfer of assets between group member companies are subject to corporate income tax at a final 20% rate;
- Head office expenses and technical assistance fees paid between group companies are deductible, subject to a prior agreement with the tax authorities;
- Certain expenses incurred within the group are deductible for tax purposes such as assistance fees, rental of movable goods within the group;
- Exemption from the 20% withholding tax on interest, royalties, fees, and payments for services made to non-resident member company;
- A tax credit may be granted in Gabon on income from movable capital (e.g., dividends) received from foreign sources that has been subject to similar taxation in the source country, even in the absence of a relevant tax treaty. The credit may be carried forward for two years;
- Gabonese-sourced investment income (such as dividends) paid to member companies is subject to the Tax on Income from Movable Capital (IRCM) at the rate of 5% (generally 20% or 10% if the company is located in the CEMAC area); and
- A 10% withholding tax applies on dividends distributed by a holding company to its shareholders.