Value Added Tax (VAT)

Value Added Tax (VAT)

Who and what is subjected?

• Companies and physical persons performing an operation that constitutes an economic activity and for which payment is made unless included in the list of exemptions in the law governing VAT
• VAT is liable, even if the residence of the physical person or the registered office of the legal entity is located outside Chad.
•  Liability depends on turnover as per below:

  Earning(XAF)	Regime	Comments
  50 millions - 100 Millions	Simplified	All activities
  100 millions - 500 Millions	Simplified	All activities
  Above 500 Millions	Normal	All activities

• Related activities concerns:
• Supply of goods;
• Provision of services;
• Importation of goods;
• Real estate activities;
• Construction and delivery of buildings by real estate professionals;
• Sale of second-hand goods and equipment by professionals;
• Transfers of non-exempt assets;
• The leasing of underdeveloped land and unfurnished premises by real estate professionals.
• Etc…..
• Some exemptions exist, mainly related to specific sectors, education, agriculture, vital needs, investment, Chad development, international transportation etc….;

Rates

• 18% for all taxable activities
• 9% for applicable to local food and construction necessities
• 0% for exportatione xports and international transport, refuelling products, and other products.

Deductions

• Tax identification Number is a prerequisite to be eligible to VAT deduction
• Monthly Input VAT is deductible from output VAT under some conditions.
• If the amount paid exceeds the VAT payable, the credit is refundable
• Input VAT is charged on a regular invoice (providing all tax related information about the buyer) by taxpayers who are themselves liable
• Deductibility is valid up to the end the second year after it became due
• Deductibility is admitted if goods or services are directly linked with activity.
• Expenses like lodging, Hotels, Restaurant, tourism vehicle rent, are not deductible unless it’s done by professional of such activities.

Declaration and Payment

• Variance between Output VAT and Input VAT is monthly declared latest on the 15^th of the following month
• VAT is withheld at source by state, state and public related companies, urban and rural councils and some private companies listed and yearly updated.
• In case of no VAT taxable activity during a month, a “NIL” Declaration should be done
• Credit VAT is refundable or may be compensated with others taxes with some conditions

Main obligations

• Accounting Bookkeeping
• Registration to Tax office
• Invoice must give all administrative, and fiscal information about the client, and the supplier.

Last Update: November 27, 2023