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 basic needs goods
  • 0% for exportation, and international transportation

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 15th 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: July 31st 2021

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