Interview: Nicolas Balesme
What changes will Gabonese companies need to make, following recent fiscal reforms?
NICOLAS BALESME: Gabon’s 2015 Finance Act included fiscal provisions that aim to improve the taxation process. The new provisions specify what new elements are to be taken into account for the tax base, with regards to corporate tax deductibility rules and some regulations regarding control procedures. Moreover, the main innovation concerns the new fiscal regime for assimilated mergers and acquisitions.
The new regime gives some details for operations of asset restructurings, such as mergers, spinoffs, partial contribution of assets, conversion of branches into subsidiaries, as well as tax incentives and advantages related to transfer of fiscal deficit and value-added tax (VAT) credits of absorbed entities. The last point included in the 2015 Finance Act addresses the conversion of branches into subsidiaries, which is an important legal matter, as rules from the Organisation for the Harmonisation of African Business Law (Organisation pour l’Harmonisation en Afrique du Droit des Affaires, OHADA) impose constraints on branches that have been set up on OHADA territory in the past two to four years. These measures do not apply to subsidiaries that do not have a holding in one of the states in OHADA.
The preferential treatment included in Gabon’s 2015 Finance Act represents a response to fiscal pre-occupations with VAT credit transfers, the reimbursement of which can be requested by a company that benefits from the asset transfer. With regards to registration fees, a CFA5000 (€7.50) fixed duty will replace proportionate fees that have been applied in the past. We hope that the National Conference on Taxation, held in March 2015, will lead to the implementation of real incentives for investment. Incentives geared towards savings should also be put in place to mobilise funds designated to social programmes, such as the acquisition of social housing.
What additional protection can foreign investors expect the new framework on public-private partnerships (PPPs) will provide?
BALESME: Every investor is first looking to secure their investment and the funding they provide. It is undeniable that this new legislation will be an efficient tool for providing a steady and clear framework for investors, as well as defining a specific legal regime. However, it is important to note that this law should be accompanied by the implementation of regulatory and follow-up frameworks for PPPs.
To what extent has the one-stop shop facilitated foreign investment and what more can be done?
BALESME: Within the framework of our counselling activities, we help investors fulfil the necessary formalities to establish their activities. Removing duplicated effort and centralising administration for authorisations would make for great progress. The one-stop shop will be a decisive step that will allow investors to gain time, as well as be guaranteed efficient competitiveness within the public sector.
What is your assessment of the impact of the new Mining and Hydrocarbon Codes?
BALESME: These new codes, especially the new Hydrocarbons Code, came into force in August 2014 and offer a sector-specific legislative framework that is dedicated to a sole activity, although the mining sector was already governed by sectoral laws. These laws will certainly be reviewed and adjusted to the economic reality of operators in those sectors. For example, when it comes to VAT or registration fees, some adaptations will have to be made to the Hydrocarbon Code, which contains tax provisions that do not take into account those currently prescribed by the general tax code. These codes redefine the legal and tax regimes for firms in these sectors and adjust administrative doctrines to the benefit all parties.
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