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6.1. Main Rules Governing the Determination of Taxable Income

Taxable income is determined by adjusting the accounting/ financial income for non-tax deductions, exemptions, etc. In the case of listed goods, the taxable profits should be determined on the basis of their official price (after adjustments, if any) according to the quality of the goods.

Dividends may be eligible for a participation exemption regime. Under the regime, 95% of received eligible dividends are exempt from corporate tax. The remaining 5% are deemed to correspond to the expenses incurred by the recipient and are added to taxable income. However, if the recipient’s actual expenses are lower than 5% of the dividends, the add-back to taxable income is limited to the lower actual expenses amount. The participation exemption is conditional on inter alia the following:

  • The parent company must have its registered seat in Guinea and must be subject therein to corporate tax;
  • The parent company must have held or commit to hold for at least 2 years a minimum interest of 10% in the distributing subsidiary. No minimum holding duration applies for shares acquired at issue.

Financial charges are deductible if meeting the general deductibility conditions for business expenses. Moreover specific limitations on deductibility of interest apply(see Sec.6.5.). Interest the deduction of which is disallowed under the above rules is reclassified as a constructive dividend distribution.

Foreign exchange gains and losses are recognized at year-end by reference to last exchange rate for the year and added to, or subtracted from the tax base.