Guinea

Rates and scope

Rates

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

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

Output tax

Advertising and prices

Calculation of output tax

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

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

Preregistration or post-deregistration VAT

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

Services

Refunds to foreigners

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

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)

Interest and penalties

Late 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

Refunds

Objections and appeals

Time limits

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

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

Promotional gifts

Secondhand goods

Tourism industry

Currency conversion

Transfer of a business

Warranty repairs

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.