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12.4.1. Main Rules

Definition of Related Parties

For transfer pricing purposes, parties are deemed to be related when one party directly or indirectly holds a majority of the share capital of the other or otherwise has therein the decision making authority, or when a third party directly or indirectly holds a majority of the share capital of both parties or otherwise is the decision making authority.

The general definition applies to a company or group outside the CEMAC zone controlling a Gabon resident or a Gabon resident controlling a company outside the CEMAC zone.

Transactions with residents of jurisdictions classified as privileged tax or non-cooperative jurisdictions, as well as payments to accounts held with banks established in such jurisdictions, fall under the transfer pricing rules regardless of whether or not the parties are related. A person is deemed to be established in a privileged tax jurisdiction if not taxable in that jurisdiction or subject therein to a tax that is more than 50% lower than the tax that would have been due had the person been a resident of Gabon. A non-cooperative jurisdiction is defined as one not-conforming with the international standards on transparency and exchange of information on tax matters. A list of such jurisdictions is yet to be published.

Applicable TP Methods

The main transfer pricing methods accepted by the Gabon tax authorities include the five standard OECD methods:

  • Comparable uncontrolled price (CUP) method;
  • Resale price method;
  • Cost-plus method;
  • Transactional net margin method (TNMM); and
  • Profit split method.

There is no hierarchy of methods under the law. The best method rule applies for the determination of arm’s length price, including a method other than the above-mentioned methods, provided it gives a result more consistent with the arm’s length principle.

Use and Availability of Comparables

Rules on the use of comparables are not specified, and the tax authorities have not shown any preference for local comparables. A fresh benchmarking study is not required to be done every year as the previous year’s comparables can be used with updated financials.