Overview
Introduced in 1980, Value Added Tax (VAT), is an indirect tax which applies on commercial operations, goods and services.
The Senegalese General Tax Code (GTC) provides VAT rules from articles 351 to 399.
The member states of the West African Economic and Monetary Union (WAEMU) including Senegal have notably harmonised their rules regarding VAT. For instance, any member state is required to fix a unique rate that must be between 15% and 20%.
Release date: May 2023
Scope of VAT |
VAT applies on the supply of goods and provision of services within the framework of economic activities. Indeed, all economic activities are within the scope of VAT, including the activities of independent professionals (attorneys, lawyers, chartered accountants etc.). |
Mechanism of subjection to VAT |
Supply of goods A supply of goods is the transfer of ownership of tangible goods. The following operations are also considered as supply of goods: the supply of water, electricity or gas, the instalment sale, and the transmission of property carried out under a commission contract on the purchase. If a company withdraws goods from the stock for itself or for a third party without payment, this is considered as self-delivery of goods. Such an operation is subject to VAT. |
Provision of services According to the Senegalese GTC, all transactions that are not supplies of goods are considered as provisions of services, including self-supply services (use of a business property for purposes other than those of the business or the provision of services by the taxable person for purposes other than exploitation or for the benefit of third parties free of charge). |
VAT rates |
The VAT rate is 18% and applies to most commercial operations on goods and services. However, there is a 10% reduced rate that applies to services rendered by licensed tourist accommodation establishments. |
VAT registration |
Compulsory registration Companies that carry out economic activities must be registered (Article 446 of the GTC). To be registered, the company must have a valid tax identification number that fits for all taxation purposes. |
Voluntary registration Voluntary registration is only possible for the following activities:
This option applies to all operations realised by the optional taxpayer. The demand is addressed to a competent chief of tax services. It only applies to supply of goods from the receipt date of the option letter. This option is irrevocable once it is granted. |
Group or branch registration Companies of a group are registered individually. A branch is considered to be a commercial company and must thus be registered with the tax administration. |
Non-residents When services are subject to VAT, foreign providers must designate a local fiscal representative for the payment of VAT. If not, the Senegalese debtor has to pay the VAT and the related penalties on behalf of the foreign provider. This VAT borne by the Senegalese debtor is conditionally deductible in accordance with decree n° 039532 on 2 December 2021 of the Minister of Finance. According to this decree, VAT related to the services provided by a foreign service provider must include a ‘transfer of know-how’ so it can be deductible. In addition, WHT should also be applicable. |
VAT on digital services provided by non-residents From the enforcement of the Finance Law for 2023 (cf. article 355 bis of the GTC), VAT is applicable on digital services provided by non-residents. Digital services shall mean supplies of intangible goods or services carried out in an automated manner over a computer and/or electronic network. The collection and payment of VAT weigh on:
The liquidation:
The VAT return is submitted online through the website of the tax administration.
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Application for registration An application for a tax ID number must be submitted when the company is incorporated. This tax ID number is used for all taxes applicable in Senegal, including VAT. |
Deregistration Deregistration is possible if the company has closed permanently. In such a case, it has to inform the tax administration of its permanent closure. |
Input VAT deduction |
Input tax allowed It applies to goods or services acquired for the company’s exclusive needs (it is deductible). Input tax is paid on delivered goods or services rendered by another person subject to VAT. Input tax is allowed on exempted operations such as:
To be deductible, invoices must be compulsorily issued with all required mentions listed in article 447 of the GTC (e.g. VAT number of the supplier). |
Extension of the right to deduct the input VAT The Finance Law for 2023 (Law No 2022-22 of 19 December 2022 - article 374 of the GTC) allows taxpayers to deduct the input VAT:
The deduction is only possible if the amended invoice correctly shows the rectified VAT, with the indication, where appropriate, of the tax initially invoiced or the references of the enforceable title. |
Input tax expressly denied VAT is not deductible on expenses on goods and services when the percentage of private use exceeds 80% of their total use. The input tax expressly denied concerns:
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Partial exemption When performing taxable and non-taxable economic activities (exempted operations without right of deduction), the VAT is calculated by way of the apportionment formula, where:
VAT paid to providers for goods and services acquired for both sectors, which is calculated in accordance with the above apportionment formula. |
Change-of-use adjustments An adjustment must be made in the following instances:
However, if the goods have been fully depreciated, there is no adjustment. |
Preregistration or post-deregistration VAT These procedures are not applicable in Senegal. |
Refunds to non-residents It is not possible for non-residents to recover VAT. |
Output tax |
Brief description of output tax There are no specific rules relating to how VAT must be quoted in advertisements and prices. However, the amount of VAT must be indicated individually on an invoice. Taxable income includes the value of the goods and services. For importation, it is the customs valuation, CIF (cost, insurance and freight charges). The following items are not included in taxable income:
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Exempt supplies Some operations are VAT exempted (article 361 of GTC). The exemptions concern:
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Zero-rated supplies No supplies are zero-rated, but economic operators who are exempted because of exportation activities may deduct input tax and obtain a reimbursement of the corresponding credit, subject to certain conditions. |
Special rated supplies Services rendered by licensed tourist accommodation establishments are special rated. The VAT rate is 10%. |
Advertising prices Advertising revenues are not exempted from VAT (Article 361 of the GTC). Furthermore, advertising costs on goods and services whose advertising is prohibited do not benefit from VAT deduction. |
International trade |
Imports Goods Imports of goods are subject to VAT at cost, insurance and freight (CIF) value. Services If the foreign service provider has not designated a local fiscal representative, the Senegalese debtor must pay VAT on behalf of the foreign provider. |
Exports Goods Exports of goods are exempted from VAT. Refunds to foreigners are not possible in practice. Services Export of services are also exempted from VAT. The mechanism is the same as for goods. |
Place, time and value of supplies |
Place of supply Supply of goods The place of delivered goods taxation is located where the property is at the time of delivery. This takes place with these provisions (article 356 GTC):
Provision of services The place of taxation of the services is located in Senegal when the service is used there or when the person to whom the service is rendered is established there (Article 357 of the GTC). However, the place of taxation of services related to a real property is the place where the property is located. Telecommunication services are considered not to be used in Senegal when the beneficiary is established abroad and the service is made by a public service operator in the telecommunications field. |
Time of supply The chargeable event for supply of goods and provision of services is upon occurrence of the soonest event below:
Finally, the time of supply for importations is at the time of customs clearance. |
Value of supply For companies subject to the actual income regime or simplified actual income scheme, the taxable basis is made up of the counterpart received or to be received by the supplier or the service provider. When the counterpart is received in whole or in part, the value is determined based on the normal selling price of a similar delivery or service. According to Article 364-2 of the GTC, the following will be included in the taxable basis:
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VAT compliance |
Accounting basis and tax period The financial statements shall follow the following local accounting standards:
The financial statements are based on the accounting year, which corresponds to the civil year. For new companies, the length of the first accounting year can, exceptionally, be less or more than 12 months, without exceeding 18 months. |
Returns and payment of VAT VAT returns must be filed and VAT paid within 15 days after the end of the month within the tax event. |
Interest and penalties Interest According to article 665 of GTC, in case of late payment, the administration could claim 5% interest plus 0,5% additional interest for each month, or fraction of the month, of the late payment. Penalties According to article 671 of GTC, the penalty for the non-payment of taxes is 25%. However, in the case of lack of payment of collected VAT to the administration (VAT has effectively been collected by the taxpayer but has not been paid to the tax authorities), 50% penalties will apply. Refunds In case of excess of the input tax against the output tax, the taxpayer qualifies for a repayment from the government. The taxpayer may request for VAT refund quarterly or before the limitation period of two year-ends, following the chargeable event of the VAT. Otherwise, the VAT credit is definitely lost (Article 391 of the GTC). However, the taxpayer may apply for VAT refund during the month following the month in which the non-charged credit VAT has been noticed. This applicable in the context of resale of goods to recipients outside the country, input deductible tax on goods or services used for the implementation of a project with the government, public institutions, stated-owned companies and which project is financed with foreign subsidies or foreign loans Objections and appeals. Any liable person can contest liability for VAT in front of the courts, after the receipt of confirmation of reassessment notice or a notice of refusal of a VAT refund. A specific procedure must be followed and a limitation period may apply, depending on the nature of the contestation. |
Online application for VAT credit refunds Taxpayers may now apply for VAT credit refunds directly by electronic means in accordance with the procedures set by decision of the head of the tax administration. (Cf. article 26 of the Finance Law for the year 2023 - article 393 of the GTC). |
Time limits Omissions or errors noted in the calculation or payment of VAT can be rectified by the tax administration within a period of four years. The maximum period for the taxpayer to claim corrections is two years after the tax event. |
Withholding VAT obligation Appointment of withholding VAT agents for foreign companies When services are subject to VAT, foreign providers must designate a fiscal representative for the payment of VAT. If not, the Senegalese debtor has to pay the VAT on behalf of the foreign provider. The fiscal representative must be subject to VAT (Article 355 of the GTC). Withholding VAT system Withholding VAT is a system of recovery which consists in withholding, at the source, during the payment, a fraction or the totality of the tax due on the operation. Operations related to any contract paid, notably by the following, are subject to VAT withholding:
Withholding VAT system exemptions The withholding tax system does not apply to:
Withholding VAT compliance The person liable for VAT on transactions subject to the withholding tax system is the purchaser of the delivered goods or the beneficiary of the services provided. The VAT relating to these transactions is liquidated at the rate in force on the date of the payment considered as the generating event. The VAT is paid by the persons listed above, for which they are obliged to retain in full and declare it, at the time when it is payable on a prepayment declaration, separately from their VAT return. This VAT is paid to the competent collection office. |
VAT refunds |
When are VAT refunds due VAT refunds are due within 15 days of the approval of the refund application by the tax authority. The reimbursement is made by cheque, bank transfer or tax certificate approved by the ministry of finance or at the taxpayer’s request by delegation of the head of the tax authority under the taxpayer request. It should be noted that the VAT credit will be refunded once the taxpayer has paid his existing tax debts. The application for restitution must be examined by the administration within 30 days following the submission month of the application (as per article 36 of the Finance Law). However, this period shall be limited to one month from the date of application filing for any taxable person who has already successfully submitted a request for refund and who, moreover, has not been reassessed during the four years preceding the filing of this first refund application (Article 393 of the GTC). |
Record-keeping |
Tax invoices Any taxpayer subject to VAT must issue his invoice by including the following mentions:
The Senegalese entity generally uses the French language and the local currency when issuing invoices. However, invoices may be in a foreign language and currency. |
Credit notes and debit notes Credit notes and debit notes are just accounting notions and are considered to be neither legal documents nor invoices. |
Additional export documentation In case of export, the following documents are required:
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Records retention Any records and books of account (books, registers, declarations, receipts, contracts, documents, supporting documents etc.) must be kept for a period of ten years in Senegal. The retention of records in electronic or scanned format is allowed, provided certain conditions are met. |
Specific VAT rules |
Bad debts VAT on bad debts is recoverable. A claim must be made to the tax administration. |
Digital economy The tax code does not provide rules for the digital economy. |
Land and buildings Renting of residential blocks is exempt from VAT if they are unfurnished. The sale of land and buildings is exempt from VAT where stamp duties are applicable. |
Leasing Leasing operations are exempt from VAT where related to goods, the supply of which is also exempted. |
Promotional gifts VAT on promotional gifts is recoverable if the value of each item is not above XOF 20,000 (Article 352 of the GTC). |
Second-hand goods VAT applies on second-hand goods resold by second-hand goods dealers following a specific regime according to article 371 of GTC. The margin scheme applies when the dealer has purchased those goods in order to sell them to:
The taxable amount is equal to the difference between the dealer sales price of second-hand goods, exclusive of VAT, and the purchase price of the same goods. Resales which are not subject to the margin scheme are subject to the normal VAT regime. Furthermore, the second-hand goods dealer may deduct VAT on goods acquired for resale. VAT does not apply on second-hand goods resold by their user (Administrative Letter n°444 MEFP/DGID/DLEC/BL of 19 May 2015). |
Tourism industry There is a 10% reduced rate that applies to services rendered by licensed tourist accommodation establishments. A derogatory tax regime has been provided by the Finance Law 2021 for the actors of the tourism and press sector for the period 1 October 2020 to 31 December 2021, exempting them from VAT. This derogatory tax regime was repealed by the 2021 Amending Finance Law. |
Currency conversion Not applicable. |
Transfer of business Transfer of a business is liable to registration duties. No VAT is applicable. |
Warranty repairs Warranty repairs are subject to VAT if they constitute a service invoiced separately. However, if the service is included in the price of the goods, VAT should not be applicable. |
Other indirect taxes |
Import duties In the case of the importation of goods, some taxes are applicable, such as customs duty, which ranges from 0% to 20%. However, there is an exemption for essential social goods such as medicines, medical and surgical devices, newsprint, books, newspapers, condoms, wheelchairs, certain fertilisers, etc. Other indirect taxes include:
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Excise duties (indirect taxes) The products on which the Senegalese authorities levy excise tax, and the relevant excise tax rates (indirect taxes), are as follows:
The Finance Law of 2022 has modified article 431 of GTC regarding food fats as follows:
Also, fabrics acquired by a taxable person subject to a real system of taxation intended for the manufacture of clothing in Senegal are exempt from the textile tax. |
Stamp duty Among the transactions subject to stamp duties are any documents pertaining to registration formalities; acknowledgment of payment in cash; and bills of exchange. The stamp duty is XOF 2,000 per page. There are also stamp duties due on payments made in cash: 1% if the payment is higher than XOF 100,000. If below this amount, then there is no stamp duty. |
Tax on plastic bag packaging and wrapping A tax is levied on plastic bags, pouches and cones or similar materials, produced or imported into Senegal with or without content. It also applies to bottles and other non-recoverable packaging made of plastic or similar materials, with or without contents, produced or imported into Senegal. Nevertheless, preforms and films manufactured in or imported into Senegal are exempt from this tax. (Art.444 bis of the amending Finance Law for 2022 - Law n°2022-19 of May 2022). The tax is fixed as below (ART.444 ter of the Law 2022-19):
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Tax on food broths A 15% tax is applicable to food broths produced or taken into Senegal for direct consumption (cf. article 442 bis of the Law n°2021-29 of July 2021, relating to Finance law for 2021. |
Type of operation |
VAT generating event |
Date of payment/filing |
Provision of good |
Delivery of the goods |
Within 15 days of the next month following the provision of goods |
Provision of service |
Upon occurrence of the soonest event below:
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Within 15 days of the next month following the generating event. |
Importation |
Customs clearance |
When clearing customs duties |
