Guinea

Overview

The VAT system was introduced in Guinea from 1 April 1996 to replace the import turnover tax and the tax on production. Guinea’s VAT legislation is contained in the General Tax Code.

The VAT system is administered by Direction Nationale des Impôts.

Navigation

Rates and scope
VAT registration
Output tax
Input tax
Imports
Exports
Place, time and value of supply
VAT compliance
Interest and penalties
VAT records
Specific VAT rules
Other indirect taxes

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Release date: May 2023

Rates and scope

Rates

The standard VAT rate of 18% applies to all supplies that do not qualify for an exemption or that are zero-rated. There is no other higher or lower VAT rate that applies.

Scope

VAT is imposed on the following transactions:

supply of goods, i.e., the transfer of power to dispose of tangible property as owner, even if such transfer is effected at the behest of a public authority
supply of goods and provision of services to oneself, meaning the levy or the use of goods that gives rise to deduction of VAT for purposes other than those of the company, or the provision of free of charge services by a taxpayer for purposes other than those of the company
provision of services to third parties, i.e., all activities relating to industry rental contracts or work contracts by which a person undertakes to perform a given job in return for payment
rentals of movable and immovable properties
transactions on intangible properties
leasing transactions
transportation of persons and goods, transit and handling
water supply, electricity, gas and telephone
transactions carried out within the framework of liberal professions, study, research and consulting works
sales of consumption on the premises
construction works carried out by different trades participating in construction, maintenance and repair of buildings and for real estate works and public works
imports of goods or merchandise in Guinea, even where the importer is not itself subject to VAT.

VAT registration

Compulsory registration

Any natural person or corporate body liable to VAT must file an application for registration to the Direction Nationale des Impôts within 15 days following the start of activities. The Direction Nationale des Impôts will immediately deliver a registration certificate as well as the identification number.

Taxpayers are automatically subject to VAT if their turnover is equal to or exceeds 500 million Guinean francs/GNF (USD52,113).

Voluntary registration

Taxpayers whose turnover is between 150 million Guinean francs/GNF (USD 15,633.9) and 500 million Guinean Francs/GNF (USD 52,113) are taxed under authorisation of Directeur National des Impôts.

Non-residents

Non-residents must appoint a solvent representative accredited by the tax authority. A bank account in Guinea is not required.

The local client of a non-resident plays the role of solvent representative under the reverse-charge mechanism.

Application for registration

The application for registration is made to the Directeur National des Impôts and must contain the following documents:

copy of the articles of association
copy of the trade and property credit register number
copy of the lease contract
proof of the payment of GNF100,000 (USD10.42) registration fees.

Deregistration

A statement of assignment, termination or amendment must be subscribed with the Direction Nationale des Impôts within 30 days following these events.

Output tax

Advertising and prices

Prices must be advertised inclusive of VAT.

Calculation of output tax

The tax is calculated based on the whole price received by the provider from the client, excluding the charged VAT itself, cash discounts, remittances, reductions or other reductions in price.

Exempt supplies

The followings are exempt from VAT:

sales of tax stamps for the benefit of the state and import of such goods
the following operations, where they are already subject to specific duties, exclusive of tax on turnover:
- interest, bank charges and other profits made by banks and credit institutions
- operations intended to transfer real estate or movable property subject to registration fees, excluding such operations carried out by estate agents or lessors.

The following operations related to the rental of undeveloped land and unfurnished premises:

the sale, import, printing and composition of periodical publications, whatever their denomination (journal, review) mainly composed of text, relating to news and information of general interest, excluding registry receipts
services or activities of a social, educational, sporting, cultural, philanthropic or religious nature, carried out by not-for-profit organisations run by disinterested and benevolent parties. However, the activities of these organisations are taxable when they are carried out in a competitive sector
the sale of certain goods: rice, flour and additives for its production, wheat, bread, food oils, palm oils, fish, pharmaceutical products, fertiliser and sanitary products, books and school equipment, gas used for domestic purpose
sale of second-hand goods made by the previous owners, who used them for business purposes
mooring and towing operations, port piloting of vessels for lading of goods for export, as well as transit operations, lading and transhipment of goods destined for export
imports of new vehicles intended for the transport of merchandise.

Zero-rated supplies

The zero rates shall apply to the exports of taxable goods and international transportation.

Input tax

Input tax allowed

VAT levied for prepayment on a taxable transaction shall be deductible from the final tax paid on such transaction.

To be deductible, VAT should appear:

on a bill duly issued by a supplier who is registered to VAT. Such a bill should also bear the supplier’s single identification number, the business or company name and its exact address, the client’s name, address and its single identification number, the amount exclusive of taxes of the transaction, the relevant VAT amount and rate as well as the total amount inclusive of all taxes of the transaction
in the case of imports, on the import documentation (such as home use entry statement)
in the case of supplies to oneself, on a special return filed by the taxpayer himself.

The deduction shall concern VAT levied on the purchase of goods, merchandise and services used for business purposes.

The right to deduction shall arise once the supplier’s tax payments fall due.

Input tax expressly denied

VAT incurred on the following expenses is expressly denied as input tax deductions:

expenses for housing, lodging, catering, receptions, shows and costs of hiring a private car or passenger transport vehicle. This exclusion does not concern expenses borne by professionals of catering, receptions and shows
importation of goods which are unused and re-exported as-is
assets transferred without compensation or with payment far below their normal price
services relating to goods exempted from the right to deduction
petrol products. However, in the case of industrial concerns, VAT on petrol products used by immobile machinery such as combustible fuels or agents for production, are deductible by up to 100% as of 2001
telephone and internet expenses, except for enterprise and companies whose purpose is directly related to the telephone or internet services
vehicles for carriage of people or of mixed usage, as well as their spare parts, components and accessories. This exclusion does not cover transport vehicles with more than eight seats besides the driver’s seat, used by companies exclusively for staff transport, as well as the assets of vehicle hire companies or public transport.

Partial exemption

For taxpayers not exclusively carrying out transactions giving a right to deduction, the deduction must be made proportionately (pro rata). It shall be calculated from the fraction of turnover pertaining to taxable transactions, as follows:

as the numerator, the combined transactions subjected to VAT and all exports (taxable at 0%)
as the denominator, the combined turnover (numerator plus exempted transactions).

The deduction is:

100% if the ratio is greater than 0.9
80% if the ratio is between 0.7 and 0.9
60% if the ratio is between 0.5 and 0.7
40% if the ratio is between 0.3 and 0.5
0% if the ratio is less than 0.3.

The following do not figure in the part used to calculate the pro rata: supply of goods to oneself, subsidies on tax-exempt equipment, disbursements which are merely refunds of the exact amount of costs, indemnities not constituting compensation for taxable transactions.

Adjustments

A taxpayer shall be liable for part of the previous deduction where property which had been subject to deduction under fixed assets ceases to be part of the assets of the enterprise before the end of the third year following the date of acquisition. Such part shall be equal to the amount of deduction, less one-fifth for each year or part thereof from its time of acquisition.

Preregistration or post-deregistration VAT

Taxpayers are not allowed to make any deduction of VAT before the registration and the issuing of a tax identification number.

Imports

Goods

VAT is payable on the importation of goods.

VAT received on imports by the customs service is calculated according to the customs value. To this is added the sum of the other customs taxes and duties apart from VAT.

Services

VAT related to services rendered by non-residents is collected through the reverse charge mechanism in practice.

The VAT due is declared and paid by the local client beneficiary of the service.

Exports

Goods

Exportations of products are taxed at zero rate and entail a right to a tax credit where VAT on such products was prepaid.

Services

Transactions carried out in Guinea and not listed among the exemptions shall be liable to VAT even when the residence or head office of the real taxpayer is situated outside Guinea. In the case of services, they are taxable if carried out or rendered in Guinea.

Refunds to foreigners

In application of the principle of territoriality of VAT in Guinea, foreign entities do not qualify for a refund.

Place, time and value of supply

Place of supply

Transactions carried out in Guinean and not listed among the exemptions shall be liable to VAT even when the residence or head office of the real taxpayer is situated outside Guinea. A transaction shall be deemed to have been carried out in Guinea:

where, in the case of a sale, goods are delivered in Guinea
where, in the case of other transactions, the service is carried out or rendered in Guinea.

Time of supply

The tax shall be due as follows:

for goods, the moment of delivery
for imports, the crossing of the customs post
for the exchange of goods and services, the delivery of these goods and merchandise
in the case of property work and services, the carrying-out of these services
for other business, the receipt of payment.

Value of supply

The basis of assessment of VAT on supplies of goods and provision of services within the national territory shall be as follows:

for construction work performed: the value of the contracts or bills
for the supply of goods: all sums or valuables, all profits, goods or services received or receivable in return for supply of the goods (excluding the charged VAT itself, cash discounts, remittances, reductions, or other reductions in price)
for the exchange of goods: the value of the products received in return for payment for the goods plus, where applicable, the value of the additional payment
for the provision of services: all sums and benefits received and, where applicable, the value of material consumed during the execution of the services
for the supply of goods and provision of services to oneself, the cost price of the goods and services.

VAT compliance

Accounting basis and tax period

Any taxpayer or legal entity carrying out economic activities must run their accounts according to the SYSCOA (West African Accounting System) law. The tax period is linked to the calendar year.

Returns and payment of VAT

A monthly tax return must be filed (before the 15th of each month) on the form specified by the tax authorities named Déclaration Unique — DMU (unique declaration).

The tax return submitted to the receiver of taxes before the 15th of each month must be accompanied by the appropriate payment and a table summarising the input tax.

VAT advance payment (deduction)

Public bodies, mixed companies, mine and oil & gas operators and telephonic companies must deduct 50% of VAT payable to their suppliers and remit the related amount to the tax administration during the filing of their unique declaration (before the 15th of each month).

Interest and penalties

Late payment

In case of late payment, a 2% interest on arrears per month is due, calculated based on the amount which the payment was deferred. The interest in arrears is calculated with effect from the first day of the month following that during which the tax had to be paid up to the last day of the month of the payment.

Failure to submit monthly tax returns

The failure to submit monthly tax returns gives rise to the interests on arrears mentioned above and an increase of 10% of the amount of tax charged to the taxpayer or resulting from the tax return, with a minimum of GNF100,000 (approx. USD 10.42).

The supplement is increased to 50% when the tax return is not filed within 10 days following receipt of a notice to file the return.

Inadequacies or inaccuracies

Inadequacies or inaccuracies affecting the tax base or data give rise to the interests on arrears mentioned above if good faith is found, plus an increase of 50% where the lack of good faith is found. The supplement is increased to 100% in cases of fraudulent practices or opposition to a tax audit.

Refunds

VAT credits may be refunded, on condition that their beneficiaries do not owe any taxes and duties whatsoever which can be swapped, and that the credits are justified.

Objections and appeals

Petitions seeking to obtain tax remission or reduction must be addressed to the Directeur National des Impôts. They must contain all information necessary for the identification of the tax in question and include a copy of the notice of issue for collection.

Time limits

Sums due from the taxpayers for taxes and duties assessed by virtue of the General Tax Code are barred after a period of three years following the due date, where no instrument has been issued to end the limitation. The time limit is also three years in the case of taxes deducted at source.

VAT records

Tax invoices

Taxpayers liable to VAT are required to issue an invoice showing the VAT ID number of the taxpayer, the amount exclusive of taxes of the transaction, the relevant VAT amount and rate, as well as the total amount inclusive of all taxes of the transaction.

These invoices should also carry the taxpayer and the client’s single identification numbers, the businesses or companies’ names and their exact addresses.

Credit notes and debit notes

Credit notes and debit notes are not ruled under the tax legislation but result from accounting practice. They are tolerated by the tax authorities and must meet the same conditions that apply for an invoice.

Additional export documentation

The followings documents are requested:

the invoice
the application for exportation.

Record-keeping

Taxpayers are required to keep the following accounting books:

journal ledger
sales ledger
purchases ledger
annual accounts ledger.

The accounting entries must be available in the Republic of Guinea.

Specific VAT rules

Bad debts

For taxes which cannot be collected due to a change in the situation of the taxpayer at the time of assessment, the collector of taxes will provide the tax authorities with the lists of irrecoverable taxes as well as any information or details showing clearly that such taxes have become irrecoverable. They will be submitted along with documents to support the measures taken to recover the said taxes.

Land and buildings

Transactions emanating from the transfer of property are exempt from VAT when subject to specific taxes exclusive of tax on turnover (i.e., registration duties). However, rentals of buildings are expressly subject to VAT as provisions of services.

Input VAT on assets is refundable over the course of each trimester of the calendar year.

Leasing

Leasing is a taxable transaction, and interests paid in the frame of the leasing are subject to VAT.

Promotional gifts

Free distribution of goods for advertisement or sales promotion is excluded from the basis of assessment.

Secondhand goods

Sales of second-hand goods made by taxpayers who used them for the purposes of their exploitation are exempt.

Tourism industry

Tourism activities are supported by tourism’s tax promotion (TPT) payable by any person staying in a hotel or an assimilated establishment.

Currency conversion

VAT is not applicable to exchange gains arising from currency conversion.

Transfer of a business

The transfer of a business is subject to registration fees, exempt from VAT.

Warranty repairs

Warranty repairs are considered as accessory services to sales of goods which are taxable.

Other indirect taxes

Import duties

The tax base of customs duties corresponds with the customs valuation, namely the selling price of the goods plus cost of delivery to Guinea (i.e., costs of insurance, transportation).

The rates of customs duties depend on the nature of the imported goods, ranging from 2.75% to 97.81%.

Excise duties

Excise duty is levied on imported liqueurs and whiskies at the rate of 45%, payable within the custom duties.

An alcoholic beverages tax is also provided on the assignment of alcoholic beverages after their manufacturing in Guinea. The tax is equal to 15% of the net selling price.

Imports of cigarettes and tobacco are subject to excise duty of 30% of the CIF (cost, insurance, and freight) value.