Niger: Global Tax Guide

Legislation

Residence/Territorial Scope

Article 3 of the General Tax Code provides that corporate income tax is levied on profits made by companies operating in Niger.

Under Article 7 of the General Tax Code, and subject to the provisions of any relevant double tax treaties, persons who receive profits from Nigerien sources are taxable in Niger, regardless of their residence status.

Article 9 bis (inserted by the 2024 Finance Law) provides that for companies and other non-resident entities with a permanent establishment in Niger, the tax is assessed in the name of the permanent establishment.

Permanent Establishment

Article 9 bis (inserted by the 2024 Finance Law) provides that a permanent establishment means any fixed place of business where the enterprise carries on all or part of its business.

This includes:

• a place of management;
• a branch office;
• an office;
• a factory;
• a workshop;
• a warehouse made available to a person to store the goods of others;
• a mine, oil or gas well, quarry or other storage or other natural resource extraction site and a facility or structure used in the exploration and exploitation of natural resources;
• a construction or assembly project, or an assembly installation or project, or related supervisory activities, provided that the duration of the project, project or activity exceeds six months in a 12-month period.

Entities Within Scope

Article 4 of the General Tax Code provides that companies are subject to corporate income tax if they meet the turnover threshold, or if they opt to be within scope.

The following are also liable to corporate income tax:

• consumer cooperative societies, when they own establishments, boutiques or shops for the sale and delivery of foodstuffs, products or merchandise;
• cooperative societies and unions of craftsmen’s cooperatives;
• workers’ cooperative production societies;
• natural or legal persons engaged in intermediary transactions for the purchase or sale of real estate or business assets or who, usually, buy the same assets in their own name, with a view to reselling them, and credit foncier companies;
• natural or legal persons who subdivide and sell land belonging to them;
• natural or legal persons who rent out a commercial or industrial establishment equipped with the furniture or equipment necessary for its operation, whether or not the rental includes all or part of the intangible elements of the business or industry;
• public establishments, State bodies and local authorities, provided that they enjoy financial autonomy and engage in an industrial or commercial activity and profit-making operations;
• real estate companies, regardless of their form;
• economic interest groupings (EIGs) formed under the conditions set out in the Commercial Code;
• professional civil partnerships (SCP);
• approved management centres (CGAs), created in commercial form;
• associations and non-governmental organisations (NGOs) operating for profit;
• private general and/or vocational education establishments.

Under Article 8 of the General Tax Code, the following are exempt from corporate income tax:

• consumer cooperative societies whose activity is limited to grouping the orders of their members and distributing in their depot stores the foodstuffs, products or merchandise that have been the subject of these orders;
• economic housing offices and companies;
• film clubs and cultural centres.

Corporate Income Tax Rates

Article 27 of the General Tax Code provides that the rate of corporate income tax is 30%. It is rounded down to the nearest thousand francs.

Minimum tax

Under Article 37 of the General Tax Code, natural or legal persons subject to the actual tax regime are subject to the minimum flat-rate tax or they can elect to be do.

The following are exempt from the flat-rate minimum tax:

• general and/or vocational education establishments;
• during the first 2 financial years, newly created companies, provided that they submit their annual income statement within the time limits prescribed by the legislation in force;
• during the first 3 financial years, companies undergoing reorganisation whose plan is subject to express authorization from the Minister of Finance.

The flat-rate minimum tax is based annually on the turnover achieved during the last accounting year that took place.

However, for certain categories (defined by Regulation) of activities, the basis for calculating that tax is the gross margin determined over the same period.

The turnover is exclusive of value added tax. It includes ancillary income, i.e. income generated in the course of the commercial management of the company but not related to its main purpose, and income from the development of fixed assets.

The flat-rate minimum tax rates are set as follows:

• 1% for industrial companies;
• 1.50% for other activities ;
• 3% for companies calculated on the gross margin, other than independent marketers and promoters in the hydrocarbon sector;
• for independent marketers and promoters in the hydrocarbon sector, the rate is determined on the gross margin according to the following scale:

From 0 to 5 billion – 8%
More than 5 billion to 10 billion – 7%
More than 10 billion to 20 billion – 6%
Over $20 billion – 5%

Taxable Income and Allowances

Article 11 of the General Tax Code states taxable profit is the net profit, determined on the basis of the overall results of operations of all kinds carried out by a company, including the sale of assets (either in progress or at the end of their operation).

The net profit is made up of the difference between the values of the net assets at the end and at the beginning of the period the results of which are to be used as a basis for tax, less any additional contributions and increased by the deductions made during this period by the operator or by partners. Net assets are defined as the excess of asset values over the total of third-party receivables, depreciation and justified provisions.

Income corresponding to receivables from customers or payments received in advance in payment of the price are linked to the financial year in which the goods are delivered for sales or similar transactions and the completion of services for the supply of services.

However, these products must be taken into account:

• for continuous services remunerated in particular by interest or rent and for discontinuous services but with successive instalments spread over several financial years, as and when the performance is carried out.
• for the work of the company as it progresses.

Taxable profit is the profit made during the tax period; The result of an operation is taken into account as soon as this operation gives rise to a claim or debt that is certain in principle and determined in its amount, regardless of the date of the corresponding receipts or disbursements.

If a receivable or debt remains uncertain at the end of a financial year, it should not be used to determine the results of that financial year. It may only be taken into account in the results of the financial year during which it has been recognised and the amount fixed. However, if a debt, without being certain, presents a sufficient degree of probability, the company may constitute a provision deductible from its results.

Under Article 18 of the General Tax Code, capital gains or losses from the sale of items used for the exercise of the trade or from the sale of assets acquired under a leasing contract must be determined by subtracting from the sale price less, if applicable, the costs applicable to the sale operation, the purchase or cost price of the items minus the depreciation applied.

However, Article 19 of the General Tax Code provides that capital gains arising from the sale of fixed assets or from the sale of assets acquired under a leasing contract shall not be included in the taxable profit for the financial year in which they were realised if, the taxpayer undertakes to reinvest in fixed assets in Niger, before the expiry of a period of 3 years from the end of the financial year, a sum equal to the amount of these capital gains added to the cost price of the items sold.

Article 36 of the General Tax Code provides that capital gains, other than those realized on goods, resulting from the allocation of shares or shares following mergers of public limited companies or limited liability companies, are exempt from corporate income tax.

This applies to capital gains, other than those realised on the goods, resulting from the allocation of free shares or shares following the contribution by a public limited company or a limited liability company to another company constituted in one of these forms of part of its assets, provided that the company receiving the contribution has its registered office in Niger.

This also applies to capital gains resulting from the transformation of a company or association into an economic interest grouping.

However, this is subject to the obligation established in the deed of merger or contribution for the absorbing or new company or for the company receiving the contribution to:

• calculate, in respect of the items other than the goods included in the contribution, the annual depreciation to be deducted from the profits and the subsequent capital gains resulting from the realisation of these items according to the cost price which they would entail for the merged companies or for the transferring company, after deduction of the depreciation already made by them;

• immediately enter in its liabilities, in consideration of the assets assumed, provisions equal to those appearing at the time of the merger or contribution in the records of the merged companies or the transferring company, and which were relating to the items contributed.

Article 25 of the General Tax Code provides that stock must be valued at the cost price or at the rate on the closing day of the financial year, if this price is lower than the cost price. Work in progress is valued at cost price.

Goods acquired in foreign currencies must be accounted for in CFA francs by converting their cost into foreign currency on the basis of the exchange rate on the date of acquisition of the property.

Parent-subsidiary regime

The gross income from the shareholdings of a parent company in the capital of a subsidiary company, is exempt on 95% of the distribution.

This tax applies when the following four conditions are met:

• the parent company and the subsidiary company are incorporated in the form of a joint stock company or a limited liability company;
• the parent company and its subsidiary(s) have their registered office in one of the member states of the West African Economic and Monetary Union (WAEMU) and are liable to income tax;
• the shares or interest units owned by the first company represent at least 10% of the capital of the second company. This percentage is assessed on the date of payment of the participation income;
• the shares or interest units are subscribed to or allocated at the time of issuance and are registered in the name of the Company or the Company undertakes to hold them for 2 years in registered form.

When the participation income is not eligible for the parent and subsidiary regime above, the participating company is only subject to income tax on 40% of the income from the participations.

Deductions

Article 12 of the General Tax Code provides that the taxable profit is determined after deduction of all expenses.

Under Article 16-1 of the General Tax Code, the general requirements for deductibility are that the expense must:

• be incurred in the direct interest of the business or be connected with the normal management of the business;
• correspond to an actual charge and be supported by an invoice;
• result in a decrease in the company’s net assets;
• be included in the expenses of the financial year in which it was incurred.

In addition, in order to be allowed for deduction, the invoices supporting the charges must bear the mandatory information referred to in Article 368d of the General Tax Code.

To be allowed as a deduction, any expense relating to a transaction of an amount greater than or equal to 3,000,000 CFA francs cannot be settled in cash.

The General Tax Code provides that deductible expenses include in particular:

• General costs of any kind, personnel and labour expenses, the rent of buildings of which the company is a tenant, royalties and maintenance costs relating to the leased goods.

However, in order to be allowed for deduction, the remuneration must correspond to actual work and not be excessive in view of the importance of the service rendered.

• reception expenses incurred in the direct interest of the company, up to a limit of 0.50% of annual turnover. These expenses must be supported by supporting documents;

• social security contributions paid on a compulsory basis by an employer for the purpose of building up the pension of its employees;

• insurance premiums, paid to insurance companies approved in Niger, to cover supplementary pension, end-of-career and death benefit insurance benefits.

The deduction of these contributions is only allowed on condition that the insurance contract is of a general nature, i.e. that it concerns all staff or one or more specific categories of them;

• the deductible amount of bonuses is capped at 13% of the gross salary of the employee for whom the bonus was paid;

• interest due on borrowings provided that the liabilities to which they relate are doubtful or contentious, in accordance with banking regulations.

Depreciation

Depreciation, determined on a straight-line basis, which relates to fixed assets, belonging to the company or leased, subject to impairment.

The rates of depreciation are:

• Industrial building – 5%
• Building for hotel use- 5%
• Residential or commercial building- 2%
• Office furniture- 10%
• Computer hardware and software- 50%
• Industrial equipment and tools- 10%
• Other Machinery and Machinery- 25%
• Layouts and fittings- 20% [updated by the 2024 Finance Law]
• Rolling stock- 25%
• Start-up costs incurred up until December 31, 2014 and not yet fully amortised will continue to be amortised, on a straight-line basis, at a rate of 20%.

For an asset acquired or manufactured to be recorded as a fixed asset, its cost must be greater than or equal to 100,000 CFA francs excluding tax. Assets valued below this are fully deductible.

When they are incorporated into the cost of acquiring a tangible fixed asset, depreciation and amortization relating to the cost of dismantling, removing and restoring the fixed asset must be included.

Provisions

Deductible provisions include:

• provisions made to meet clearly specified losses or charges which are likely to occur, provided that they have actually been recorded in the records for the financial year and are included in the statement of provisions. However, the provision of self-insurance by a company is not allowed as a deduction.
• provisions made by banks and financial institutions to deal with the impairment of debts constituted in accordance with the prudential standards laid down by the Central Bank of West African States (BCEAO).
• provisions for late claims and provisions for cancellation of premiums constituted in accordance with the Code of the Inter-African Conference of Insurance Markets (CIMA), by insurance companies in the form of capital companies.

The following provisions are not deductible:

• the provisions of the company’s own insurer (captive insurance);
• the provisions made by a company in order to meet the payment of allowances due to the retirement or early retirement of members of its staff;
• provisions for the payment of holiday pay.

Gifts/donations

Gifts, in the case of objects of low value, specially designed for advertising, up to a limit of 20,000 CFA francs per object are deductible. However, the total amount of these gifts must not exceed 0.50% of turnover.

Expenses incurred for sporting, cultural or social sponsorship are deductible up to a limit of 1% of turnover (updated by the 2024 Finance Law).

Cultural, social or sports sponsorship expenses are deductible up to 1% of turnover (inserted by the 2023 Finance Law).

Interest

interest on partners’ current accounts and similar remuneration within the limit of the Central Bank’s discount rate plus 3 points is deductible.

However, this deduction is only allowed when the share capital is fully paid up.

Interest paid to related enterprises or interest arising from a loan guaranteed by related enterprise is allowed as a deduction only if the following conditions are met:

• loans made must not exceed twice the amount of the equity;

• interest paid to group or related companies must not exceed the interest rate of the Central Bank plus 3 points.

The 2024 Finance Law provides that the total amount of deductible interest must not exceed 15% of EBITDA.

Head-office expenses

Article 14 of the General Tax Code provides that payments for head office expenses and technical assistance, by a company established abroad, are only allowed to be deducted from taxable profits for 20% of the accounting profit made in Niger before deduction of the these amounts.

Tax Losses

Article 24 of the General Tax Code provides that unutilised losses can be carried forward and offset against profits of the following financial years until the third financial year following the loss-making year.

Withholding Tax

General

Article 38 of the General Tax Code provides that – Persons who carry out an activity subject to Income Tax are subject to a withholding tax on the tax due in respect of profits.

The withholding tax is levied on:

• imports of goods for trade;
• exports and re-exports for commercial purposes;
• purchases made from importers, wholesalers and manufacturers subject to the actual tax regime for commercial purposes or presumed to be such;
• the provision of services to the State or its subdivisions, to public or private establishments, to undertakings subject to the actual tax regime, to projects, to non-governmental organisations, to diplomatic and consular representations and other bodies;
• the supply of goods to the State or its branches, to public or private establishments, to private persons, to projects, to non-governmental organisations, to diplomatic and consular representations and to other bodies.
• the remuneration paid to consultants, experts and individual contractors by the Projects, Non-Governmental Organizations (NGOs), Development Associations as well as public and private educational institutions and similar.

Under Article 40 of the General Tax Code the rates applicable to transactions subject to withholding tax are:

• 2%, on transactions carried out on the internal market by economic operators who do not have a certificate of exemption from payment of withholding tax;
• 2%, on re-export or transit operations carried out by economic operators;
• 3%, on customs operations carried out by economic operators who do not have a certificate of exemption from payment of the ISB withholding tax;
• 5%, on transactions carried out by persons not registered with the General Directorate of Taxes.

Enterprises that have declared a turnover of more than 800,000,000 CFA francs, regardless of the activity, for the previous fiscal year, may benefit from an exemption from payment of withholding tax.

The withholding tax is not levied on:

• donations in kind intended for the State, local authorities and public administrative establishments;
• imports by individuals for their personal use;
• imports made on behalf of diplomatic and consular missions, international organizations and non-governmental organizations which, by virtue of their special status, benefit from exemptions from income tax;
• samples;
• transactions carried out by holders of exemptions issued in their name by the General Directorate of Taxation.

Non-resident profits

Article 47 of the General Tax Code provides that, subject to the terms of an applicable double tax treaty, amounts paid as remuneration for a professional activity, in particular commissions, brokerage, rebates, fees, vacations, royalties, copyright or inventor’s rights or any other provision of services are subject to withholding tax when they are paid by a person established in Niger, to natural or legal persons who do not have fixed business facilities in Niger.

However, land transport of goods and air transport are not subject to withholding tax.

The rate of the withholding tax is 16% of the amount of the remuneration excluding VAT, without allowance for professional expenses.

Withholding tax on securities

Article 70 of the General Tax Code applies a withholding tax to:

• dividends, income and all other proceeds from shares of any kind and from the founders’ shares of companies, companies and enterprises of any kind, having either their registered office or a permanent establishment in Niger;
• interest, income and profits of interest and limited partnership shares in companies and enterprises having either their registered office or a permanent establishment in Niger, whose capital is not divided into shares;
• function allowances and flat-rate reimbursement of expenses and any other remuneration not covered by the legislation on the taxation of salaries and wages, accruing, in any capacity whatsoever, to the directors and members of the boards of directors;
• salaries, flat-rate reimbursement of expenses and any other remuneration due to the general partners, in limited partnerships under the conditions defined in Article 105;
• office allowances paid to the shareholders of these companies at general meetings;
• interest, arrears and all other proceeds from bonds and loans of all kinds of companies, municipalities and public establishments.

Article 74 of the General Tax Code provides that the rate of withholding tax is:

• 10% for dividends. For dividends distributed by companies listed by a securities exchange approved by the Regional Council for Public Savings and Financial Markets (CREPMF) within the WAEMU, the rate is 7%;
• 7% for capital gains on the sale of shares and shares;
• 6% for income from bonds regardless of the issuer of the said bonds;
• 3% for bonds issued by public authorities, when the duration of the bonds is between 5 and 10 years;
• 0% for bonds issued by public authorities and their branches, with a maturity of more than 10 years;
• 5% for capital gains on the sale of bonds;
• 15% for other income.

Exemptions

Articles 97-106 of the General Tax Code provide for a number of exemptions, including:

• interest on sums entered in savings bank passbooks;
• interest on sums recorded in savings or credit accounts opened in the books of financial institutions;
• interest, arrears and other income from current accounts included in the income from the exercise of an industrial, commercial, craft or agricultural profession or from a mining operation under two conditions:

o that the contracting parties both have one of the qualities of industrialist, trader, craftsman or agricultural or mining operator;

o that the transactions recorded in the current account are exclusively related to the activity of the two parties;

• loans and bonds of cooperative societies;
• interest, arrears and all other proceeds of annuities, bonds and other public bills issued and contracted by the State and local authorities;
• interest, arrears and other loan proceeds granted by persons engaged in the banking business or a related profession, as well as by Nigerien companies by means of funds which they obtain by contracting loans which are themselves subject to this tax;
• interest and other loan proceeds made by associations formed for the purpose of making available to their members or associations with which they are affiliated, funds which they obtain by borrowing or receiving deposits;
• distributions of legal reserves in the form of capital increases;
• for limited liability companies, dividends, interest, arrears and income accruing to two managing partners and not exceeding 300,000 CFA francs.

Transfer Pricing

Article 33 of the General Tax Code provides that where companies are dependent on companies or groups of companies located outside Niger or where they own companies outside Niger, payments made that are comparable to abnormal acts of management, constitute transfer prices subject to income tax. This includes:

• payments in the form of a purchase or sale surcharge or reduction;
• excessive or unrequited royalty payments;
• interest-free loans or loans at unjustified rates;
• debt forgiveness;
• benefits out of proportion to the service rendered.

Where this applies, taxable income will be determined by comparison with those of similar companies operating in Niger.

The prices that serve as the basis for adjusting the profits thus transferred are prices that would be applied in transactions between unrelated companies and in accordance with the arm’s length principle.

Non-arm’s length relationships are deemed to exist between two companies:

• when one holds, directly or through an intermediary, the majority of the share capital of the other or exercises de facto decision-making power; or
• where they are both placed, under the condition set out above, under the control of the same undertaking.

The condition of dependence or control is not required when the transfer is made with companies established in a foreign State or in a territory located outside Niger whose tax regime is privileged or in a non-cooperative country.

Persons are considered to be subject to a preferential tax regime in the State or territory in question if they are not taxable there or if they are subject to taxes on profits or income the amount of which is more than half less than the amount of the tax on profits for which they would have been liable in Niger.

States and territories that do not comply with international standards on transparency and exchange of information in tax matters, are considered to be non-cooperative.

CFC Rules

None