Tax laws Guinea-Bissau
Guinea-Bissau has recently implemented significant reforms to its tax system, notably the introduction of a Value-Added Tax (VAT) and enhancements in tax administration.
Value-Added Tax (VAT):
Implementation Date: VAT was introduced on January 1, 2025, replacing the previous General Sales Tax (Imposto Geral Sobre Vendas e Serviços).
Rates:
- Standard Rate: 19% applied to most goods and services.
- Reduced Rate: 10% for essential goods and services, including imports.
- Simplified Scheme: 5% rate for small businesses with annual turnover up to XOF 40 million.
- Exports: Zero-rated to encourage international trade.
Registration Threshold: Businesses with annual taxable supplies exceeding XOF 10 million are required to register for VAT.
Exemptions: Certain goods and services, including financial services, real estate, domestic gas heating, education, and medicines, are exempt from VAT.
Tax Administration Reforms:
Digital Transformation: The tax administration has embarked on digitalization efforts to enhance taxpayer services, utilizing information technology and third-party data to improve tax compliance.
New Tax Legislation: In 2022, Guinea-Bissau approved a comprehensive set of four tax laws, including a general tax code and specific laws on VAT, customs duties, and excise taxes, aiming to modernize the tax system.
Investment Incentives:
- Investment Code: Guinea-Bissau offers various tax incentives to encourage investment, including benefits during the investment phase, initial years of operation, professional training, and infrastructure development. Notably, projects valued at or above USD 80 million may receive additional incentives through investment contracts.
Compliance Requirements:
Registration: Businesses exceeding the VAT registration threshold must register with the Directorate-General of Taxation and Customs (DGCI).
Invoicing: Registered taxpayers must issue standardized invoices for all taxable transactions.
Reporting: Monthly VAT returns are due by the 15th of the following month. Supporting records should be maintained for at least five years.
Note: Tax laws and regulations are subject to change. For the most current information, it's advisable to consult Guinea-Bissau's tax authorities or a tax professional.
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