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.
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.
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.