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4.1. Domestic PE of a Foreign Entity

The law does not specifically define the concept of permanent establishment (‘PE’). This is in part due to the fact that Equatorial Guinea applies a territorial taxation regime (with exceptions) pursuant to which all income derived from activities undertaken or assets situated in Equatorial Guinea is taxable therein. However, Equatorial Guinea is a member state of CEMAC and the concept of permanent establishment is defined under the tax convention applicable to the member states of CEMAC. A permanent establishment is defined as a place of management of the activities of a foreign enterprise including the following:

  • A place of management;
  • A branch;
  • An office;
  • A factory;
  • A workshop;
  • A construction project or assembly site related to such project; or
  • A mine, quarry or other place of extraction of natural resource s.

However, the following places do not constitute a permanent establishment for a foreign enterprise in Equatorial Guinea:

  • Maintaining an inventory of goods and merchandise owned by the enterprise only for the purpose of reprocessing by another enterprise; and
  • Maintaining a permanent place for an activity that only undertakes work of a preparatory or supporting nature to an enterprise.

The tax convention applicable to the CEMAC member states does not specifically include in its permanent establishment definition, the constitution of a service permanent establishment on the completion of a specified number of days.