Overview
VAT on digital services was introduced on 19 December 2022 by Law no. 2022-22, effective from 1 April 2024 but the decree governing the application of this tax was adopted on 08 November 2023.
Article 355 bis of the General Tax Code (“GTC”) states that: “When, in application of the provisions of Article 357 of the GTC, the place of taxation for a digital service supplied by a foreign natural or legal person is located in Senegal, VAT is collected and paid, on behalf of the supplier, by the intermediary who carried out the transaction.”
This means that when a non-resident supplier provides certain electronic services (as listed below) to Senegalese consumers (regardless of whether the consumer is B2B or B2C), the non-resident will be required to register for VAT and charge VAT on the services supplied.
Key provisions applicable to VAT on ESS
| Particulars | Description |
| Scope | B2C and B2B |
| Liability to remit VAT |
|
| VAT rate | 18% |
| Taxable value | VAT is charged on the price of digital services and, where applicable, on commissions received by intermediaries. |
| Effective date | 1 April 2024 |
| VAT registration threshold | Nil |
| Tax invoice | The issuance of an invoice is compulsory for any profession of activity. |
Services in scope
Article 2 of decree no. 034269 of 08 November 2023 implements the provisions of Article 355 bis of the General Tax Code (CGI) relating to VAT on digital service transactions carried out by foreign taxable persons.
- Advertising services
- Digital intermediation services
- Downloading/broadcasting of music, films and online games
- Provision of SAAS solutions or cloud software
- Data storage and processing
- Provision of databases
- Electronic data management
- Provision of articles, newspapers and online information
- E-learning and distance learning
- Website, image and text hosting
- Provision of travel, accommodation and transport information
- Broadcasting or provision of websites
- Data software hosting
- Sales of software and software updates
- Remote software maintenance services
- Distribution of images, text and information
- Organisation of political, cultural, artistic, sporting, scientific and other programmes and events
- Provision of advertising platforms
- Provision of streaming platforms and subscription services
- Payphone paging services
- Cloud storage services
- Provision of downloadable content (applications, books, films)
- Media subscription services, streaming, software programmes
- audiovisual content offer
- Supplier-recipient link services
- Performance of any other electronic service
Registration and compliance
Foreign direct suppliers and digital platform operators can register for VAT in Senegal using the simplified remote electronic registration procedure. To register, suppliers must fill in the registration form provided by the tax authorities online.
Once registered for VAT in Senegal, the non-resident supplier is obliged to settle, collect and remit VAT on the digital transaction and on the related commissions to the tax department responsible for large companies no later than the first 15 days of the month following the chargeable event of the VAT.
For non-resident suppliers, the VAT return must include information on:
- The total amount before tax (turnover) of transactions concluded with customers established in Senegal during the month
- The amount of VAT invoiced and collected from customers established in Senegal.
The local VAT taxpayers, in the absence of proof that the operator of the foreign platform is duly registered in Senegal, must account for VAT using the reverse charge mechanism.
Invoicing
The taxable person's invoice must show clearly:
- The exact name and address, together with their Tax ID number
- A serial number based on a chronological and continuous sequence
- The turnover tax payable on the transaction concerned, with an indication of the rate
- The specific tax payable, where applicable, on the transaction concerned, with an indication of the rate
- The price inclusive of all taxes
Please note that there are no specific guidelines on what currency needs to be used for the invoices. As such, invoices can be in any currency.
VAT on costs
The VAT borne by foreign service providers cannot be refunded in the absence of VAT collected in return in Senegal.
The reverse VAT charge applied by a local entity is deductible only if the conditions set out in the decree no. 039532 of 02 December 2021 are met. The decree provides an exception where the services involve the transfer of know-how.
Other consideration
Information sharing
A company, regardless of its location, which, in its capacity as a platform operator, puts persons in contact at a distance by electronic means with a view to the sale of goods, the provision of a service or the exchange or sharing of goods or services, whatever the nature of the goods or services, must:
- Send by electronic means, to sellers, service providers or parties involved in exchange or the sharing of goods or services who have received, in their capacity as a user of a platform, sums in respect of transactions carried out of which it has knowledge, by no later than 31 January of the year following that in respect of which the information is given, a document mentioning, for each of them, the following information:
- Details identifying the operator of the platform concerned
- The identification details of the platform user
- Whether the platform user is a private individual or a professional
- The number and total gross amount of transactions carried out by the operator with each user during the previous calendar year
- If known to the operator, the details of the bank account into which the sums are paid
- Send to the tax authorities, no later than 30 April of the year following the year for which the information is provided, a document summarising all the information mentioned in paragraph 1 above. In the event of express authorisation from the tax administration, the said information may be sent electronically.
Requirement to appoint a tax representative
Senegal’s general VAT administration framework allows non-resident businesses to appoint a local tax representative to assist with VAT filings, payments, correspondence with the General Directorate of Taxes and Domains(“DGID”) and the use of the ETAX system.
However, the ESS regime introduced under the 2024 amendment establishes a mandatory online VAT registration procedure specifically for foreign digital suppliers. As a result, non-residents supplying electronically supplied services are not required to appoint a Senegalese tax representative for the purposes of VAT declaration and payment arising from online sales. They may register and comply directly through the DGID’s electronic platforms
VAT on cryptocurrency/digital assets
Currently, Senegal does not have specific VAT rules or regulations relating to cryptocurrency-related activities or digital assets.
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