Guinea: Changes in the Guinea Tax System

Expansion of Persons - The Application of Flat Rate Levy

Since 2021 to the present day, several major changes have taken place in the Guinean tax system. Thus, since the same date, tax exemptions for their validity must be ratified by the National Assembly. In addition, a major development is the expansion of the number of persons who must apply the flat-rate levy (BIC) when making local purchases from persons not registered for VAT.  

Since the arrival of the COVID 19 pandemic in Guinea, the Guinean government has offered taxpayers who are experiencing non-recurring and temporary difficulties the possibility of staggering the payment of taxes at their request.

With the entry into force of the new General Tax Code in 2022, several major changes have also been made, namely:

• A new payroll tax rate of 8% has been added, applicable to the bracket between GNF01 3,000,000 and GNF 5,000,000, and certain tax-free allowances have been capped at 25% of gross salary. The scope of the apprenticeship tax has been extended to companies with fewer than 30 employees.
• Corporate Income tax: Losses for one financial year are deductible from the profit of the following financial year up to a limit of 70% of the taxable profit for that financial year, the remainder can be carried forward for an unlimited period within the same limit. In addition, donations, tips and gifts are deductible up to 1.5%, compared to 1% previously. 
• The operations that must be charged for the acquisition of equipment, tools and office furniture must no longer exceed a unit value of 5,000,000 GNF.
• Withholding tax on non-wage income (RNS): The criterion for determining the service provider is the fact that it does not have its place of effective management in Guinea. In addition, the supply of services ancillary to a supply of goods is not taxable to the RNS.
• Licence tax: To determine the rate applied, reference is made to the turnover of the previous year and not to the type of activity carried out.
• The minimum tax rate has been reduced to 2% in 2024, while the ceiling and floor have been raised.
   

In 2024, we have the extension of the scope of indirect profit shifting. It now extends to all transactions carried out in any manner whatsoever between related entities at a price other than the arm's length price. This provision applies even if there is an arm's length relationship but one of the entities involved in the transaction is established in a country with a preferential tax regime.

The introduction of a reporting obligation for related entities established in Guinea by 30 April at the latest, when they meet one of the conditions provided for in paragraph II of Article 11 of the Finance Law.

Related entities that meet one of the conditions set out in paragraph 2 of article 14 of the Finance Act for 2024 are required to provide a transfer pricing document when their accounts are audited.

Contracts between companies, including related legal acts, must be registered.

Modification of validity conditions for existing and future exemptions.

If you wish to discuss these topics, please contact:

FACE Africa Tax & Legal