Senegal: Implementation of Action 12 of BEPS project: a strengthened internal tax system

In Senegal, the Transfer Pricing provisions, largely inspired by the OECD Guidelines 2017, have been incorporated into the Senegalese General Tax Code. The recent reforms, in particular the transposition of action 12 of BEPS project by the 2021 finance law were extended by the amending finance law of the same year, in order to strengthen the provisions governing automatic exchange information relating to financial accounts and the obligation to identify the beneficial owners of companies.

It is established for financial institutions, credit establishments and similar organizations:

• an obligation to transmit information relating to the tax residences of all holders of financial accounts and, where applicable, of all individuals who control them,
• an obligation, from 1 January 2022, for individuals or entities that open financial accounts with financial institutions to submit self-certification to establish their tax residences and, where applicable, to establish the tax residences of individuals who control them, except when financial institutions are not required to collect them.
   

The information collected by the tax authorities from those individuals or entities may be communicated to the tax authorities of countries which have concluded agreements with Senegal allowing an automatic exchange of information regarding financial accounts.

Failure to comply with these two obligations is sanctioned by respectively a fine of XOF 5,000,000 or EUR 7,622.45 per account and XOF 10,000,000 or EUR 15,244.90 per account holder.

From now, all legal persons are required to:

• identify their beneficial owners and keep a register for this purpose at their head office in Senegal.
• keep accurate and up-to-date information relating to the identity of the beneficial owners, the nature, methods and extent of the control exercised over the legal person, and the date on which the individual(s) became or ceased to be the beneficial owners of the legal person.
   

Individuals or legal persons residing in Senegal who hold an administrators’ role or manager of trusts, or other similar legal structures with headquarters outside Senegal, are required to declare to the Head of the Tax Department of their tax domicile, within 20 days following their appointment:

• the existence, terms and content of legal arrangements of this type that they manage or administer,
• the identity of the persons mentioned in the legal structure and the identity of the beneficial owners.
   

Failure to comply with these obligations is punishable by a fine of XOF 10,000,000, or EUR 15,244.90 due as many times as there are documents or information requested and not produced, omitted, incomplete or inaccurate.

Read the WTS Global Transfer Pricing Newsletter here.