How do Côte d’Ivoire’s tax regulations offer investment opportunities?

In Côte d’Ivoire, the preparation of finance laws traditionally includes a consultation between the private sector and the tax administration. This is an opportunity for companies to initiate tax reforms that could affect activities related to their industry.

New Measures

The Directorate General of Taxation (Direction Générale des Impôts, DGI) announced the tax annex to the Finance Law 2022 (Law No. 2021-899 of December 21, 2021), which formalised the state budget for 2022. This law and its regulations were published in the Official Gazette No. 18 special issue of December 28, 2021, effectively published on December 31, 2021.

Pursuant to Decree No. 61-175 of May 18, 1961, the provisions of the tax annex are applicable three business days after publication. The new measures came into force on Tuesday, January 4, 2022.

The tax annex was developed to support the economy and employment, provide a more balanced distribution of the tax burden, and strengthen the means of the state through improved tax mobilisation, governance and accountability. In addition to these strategic axes, the tax annex includes technical measures and aims to rationalise the tax system.

As part of these provisions, there are several notable amendments related to taxes on investment. These include:

• The establishment of a framework that offers favourable measures to investment companies with fixed capital;

• The value-added tax (VAT) liability from online sales and digital services platforms;

• Modification of the rules governing tax abatement on the profit earned from investment activities in Côte d’Ivoire;

• Tax measures that support micro-insurance; and

• The reinforcement of tax incentives for firms that prioritise industrialisation by acquiring patents and adopting next-generation manufacturing processes. The tax annex offers a favourable tax regime for fixed capital investment companies (entreprises d’ investissement à capital fixe, EICFs). Companies are exempt from income tax for a period of 15 years from the date a company is incorporated. In addition, registration fees and capital gains tax from the sale of securities are excluded.

Private Equity Support

A private equity (PE) investment is a negotiated investment in equity and/ or quasi-equity in an unlisted company, made by an investment fund and managed by a management company on behalf of qualified investors.

PE firms target businesses that cannot be financed on the stock market. Additionally, since these unlisted companies are typically small and medium-sized enterprises (SMEs), they either face challenges accessing bank financing or are subject to prohibitive interest rates.

Financial institutions are hesitant to lend to unlisted companies for a number of reasons, including a lack of information needed to determine SMEs’ ability to repay loans and the low realisation value of collateral.

Although there is strong demand for financing from unlisted companies, including SMEs, the supply of capital is limited. Faced with this structural shortage, PE presents itself as an alternative source of financing.

Indeed, PE can provide the capital and debt financing necessary for unlisted companies to ensure their start-up (venture capital), their growth (development capital), their transfer (replacement capital), and occasionally their recovery and survival (turnaround capital).

Additionally, PE can direct institutional investors towards companies with a measurable economic and social impact.

In Côte d’Ivoire, capital is typically invested in unlisted companies operating in strategic sectors such as renewable energy, agri-business, education, health care and telecommunications. Capital is also injected into large-scale projects through public-private partnerships related to electricity, water and infrastructure.

Furthermore, PE helps a growing number of SMEs by providing structural support and introducing their management teams to best practices. Indeed, thanks to their experience, sector-specific competencies and international presence, PE firms offer entrepreneurs and SMEs several benefits, including:

• Assistance with strategic decision-making;

• Introductions to new customers, suppliers and financial backers due to the presence of a shareholder investor; and

• Financial management (reliability of financial data, management control, reporting and cash flow management). SMEs that receive this support also tend to have a structuring effect on their value chains by helping subcontractors to formalise and develop.

Financial Base

Abidjan’s growing importance as a financial centre and a crossroads for subregional financial activity is due in part to the operations of numerous international financial institutions such as the African Development Bank, the Bourse Régionale des Valeurs Mobilières and the African Export-Import Bank. Their presence has facilitated the installation of PE players as well. However, the regulatory framework has not evolved in a way that harmonises with the favourable community measures applied in other UEMOA countries.

The Uniform Law of March 20, 2003 on EICFs in UEMOA and Directive No. 2/2011/CM/UEMOA of June 24, 2011 aim to harmonise the tax liability for these enterprises within UEMOA. The law defines the legal and financial policies, procedures, rules and regulations for PE companies at the community level, and specific tax exemptions which apply.

Going forwards, Article 24 of the 2022 Tax Annex incorporates into Ivorian law Directive No. 02/2011/ CM/UEMOA of June 24, 2011 the harmonisation of taxation applicable to EICFs within UEMOA.

Closed-end investment companies are organisations that contribute their own capital or raise funds on a limited basis to strengthen the equity capital of other businesses. They sell a fixed number of shares to investors on an exchange by way of an initial public offering.

These companies currently benefit from an advantageous tax regime on industrial and commercial profits (bénéfices industriels et commerciaux, BICs), securities and registration fees.

This inclusion provides an attractive tax framework for PE players and the first step towards the best practices observed in the financial markets of the country’s primary foreign trading partners such as France, Luxembourg, the Netherlands and Mauritius. The expected effects of this measure include:

• A guarantee of legal security for PE players;

• An increase in the flow of capital towards Ivorian SMEs that cannot access financing through banks or the stock market;

• Greater awareness of companies with a substantive economic and social impact from institutional investors; and

• Improved structuring of SMEs and leadership exposure to best management practices thanks to the experience, sector-specific expertise and international presence of participating management companies.

VAT Liability

Due to the development of the internet and ICT, online sales of goods and digital services have seen remarkable growth globally as well as in Côte d’Ivoire.

In principle, provisions in the General Tax Code (Code Général des Impôts, CGI) specify that sales are subject to tax when the delivery takes place on Ivorian territory, while the provision of services is taxable in Côte d’Ivoire when used there.

However, in practice, the tax administration has challenges collecting VAT from the online sales of goods and services, in part because many online operators or digital services providers have no physical or professional presence on Ivorian territory. Nor do they all voluntarily pay VAT.

This situation deprives the government of significant tax revenue and leads to distorted competition between traditional companies and those using highly digitalised economic models.

To remove any ambiguity regarding the taxation in Côte d’Ivoire of online sales and digital services made or used in the territory, Article 7 of the 2022 Tax Annex clarifies the territoriality rules applicable to such transactions.

The new provision also introduces a remote registration and tax reporting obligations on both resident and non-resident digital platform operators and imposes penalties and fines on businesses that do not comply.

Going forwards, resident and non-resident online trading platform operators and digital services providers are subject to VAT on the following activities:

• Sales of tangible and intangible personal property made via digital platforms;

• Digital services purchased through these platforms; and

• Commissions paid or received by these platforms in connection to the transactions mentioned above. If the beneficiary of an online purchase or digital service is located in Côte d’Ivoire at the time a transaction is completed, they are responsible for paying VAT.

Regarding the commissions perceived by digital platform operators, VAT is due in Côte d’Ivoire if the operator, the salesperson of the good or the service, or the purchaser or user of the aforementioned good or service is on Ivorian territory at the time the transaction is completed.

According to Article 7 of the 2022 Tax Annex, digital platform operators that are not established in Côte d’Ivoire but conduct business within the country are now required to register with the DGI to declare their turnover and pay VAT.

Registration with the DGI must occur within three months of the time the firms begin sales activity in Côte d’Ivoire.

Furthermore, if those vendors are not established on Ivorian territory, the declaration of taxes payable for the month is made online and remotely no later than the 15th day of the following month.

All of these obligations will be carried out virtually following a simplified procedure set up by the DGI.

Operators that do not adhere to the country’s registration rules or fail to pay VAT on taxable transactions could be subject to sanctions, including the suspension of their account access.

Prior to the 2022 Tax Annex, Article 15 of the 2019 Tax Annex mandated that vendors were obliged to issue electronic invoices for any goods or services they sold online.

In the same vein, Article 17 of the 2020 Tax Annex introduced a tax on the distribution of video on-demand and streaming services. This tax is levied at a rate of 3% on the pre-tax price of the service.

These reforms codify Ivorian taxation rules related to all online commercial operations.

However, for Ivorian officials, implementing these measures will be a significant undertaking, insofar as a number of previously adopted regulations have not been effectively implemented. This includes the standardised electronic invoice, the conditions of which are still being specified by the minister of the budget.

Investment Profit

Article 10 of the 2022 Tax Annex modifies the provisions of Article 110 of the CGI relating to the tax abatement of profit realised from investment in Côte d’Ivoire.

These adjustments are related to the increase in the minimum investment threshold and the source of the invested sums.

To encourage self-financing, Article 110 of the CGI permits natural or legal persons who reinvest all or part of their profits in Côte d’Ivoire to obtain a tax reduction on BIC up to CFA10m ($17,200), excluding recoverable VAT.

The amount spent and the type of investment are two factors that determine whether firms qualify for a tax reduction. To take advantage of these exemptions, businesses must maintain and submit documentation, including accurate and current accounting records.

The investment programme must be related to a new initiative, innovation or diversification of an existing activity, and be carried out within two years of December 31 of the year in which the scheme was approved.

The tax assessment is capped at a maximum of 50% of the taxable profits of each of the relevant financial years and is based on the performance of the four financial years that follow the completion of the approved programme.

The deduction limits are based on investment zones and are as follows:

• 35% of the amount invested for the region of Abidjan (departments of Abidjan, Aboisso, Adzopé and Agboville); and

• 40% for all other regions. Following the provisions of Article 10 of the 2022 Tax Annex, to benefit from the tax reduction, the minimum threshold of the investment programme has been raised from CFA10m ($17,200) to CFA100m ($172,000).

This incentive excludes investment programmes financed by bank loans or means other than the reinvestment of actual profits. As a result, businesses wishing to take advantage of this incentive must present proof of the funding source. This clarification was introduced to prevent the illicit flow of capital and to combat money-laundering.


In Côte d’Ivoire, the insurance industry plays a significant role in the economy. However, due to their cost, traditional insurance products are not accessible to a large segment of the population, including low-wage earners and those who receive irregular income. Several provisions now enable disadvantaged groups to shield themselves from the financial loss of unanticipated events.

Safety Net

To help vulnerable communities protect themselves against certain life risks, the Council of Ministers of the Inter-African Conference on Insurance Markets (Conférence Interafricaine des Marchés d’Assurances, CIMA) adopted a resolution in April 2012 establishing micro-insurance. CIMA defines this financial tool as “an insurance mechanism characterised mainly by the low premium and/or capital, by the simplicity of the coverage, of the formalities of subscription, management of contracts, declaration of claims and compensation of victims”.

To facilitate access to coverage, Article 15 of the 2022 Tax Annex adjusts the tax provisions related to micro-insurance.

These changes relate to the tax levied on insurance contracts, registration fees and banking transactions to encourage more individuals to purchase policies.

OBG would like to thank EY for its contribution to THE REPORT Côte d’Ivoire 2022 Under Article 422 of the CGI, any insurance or life annuity agreement transacted with an insurance company or any other Ivorian or foreign insurer is subject to an annual and compulsory tax, regardless of the place in which it was conducted or the date it was concluded.

The tax rate varies according to the type of risk. Under the provisions of Article 15, the tax rate on applicable micro-insurance contracts is reduced by 50%.

The 2022 Tax Annex specifies that the risks are those that fall within the scope of application of micro-insurance. Indeed, the risks covered by micro-insurance are limited to bodily injury, illness, loss of crops, loss of livestock, fishing, other agricultural insurance, property damage, death, life, savings and capitalisation.

Article 15 of the 2022 Tax Annex reduces the registration fees applicable to micro-insurance agreements by more than 50%, from CFA18,000 ($30.94) to CFA5000 ($8.60).

Previously, these agreements and any written record of their modification or amicable termination, as well as mailings, extracts or copies, were subject to a registration fee of CFA18,000 ($30.94).

This fee was based on Article 703-20, which states that all acts that are not subject to any other article and which cannot give rise to the proportional or progressive duty are registered at a fixed fee of CFA18,000 ($30.94).

Article 395 et seq. of the French General Tax Code imposes a tax on banking transactions related to financial activities and, in general, to the trade in securities and money.

The standard tax rate of 10% is applicable on a taxfree basis.

However, for small and medium-sized businesses that operate exclusively in the micro-insurance industry, this rate is decreased to 5% for bank fees on business loans. This rule extends to qualifying companies regardless of their turnover.


Technological innovation is key to improving business competitiveness and fuelling economic growth. To promote modernisation and innovation, SMEs are encouraged to acquire industrial property rights and promote industrial development in Côte d’Ivoire. Firms that carry out these initiatives will receive tax credits.

To enable these companies to be at the forefront of technological innovation and to be competitive in the market, Article 112 of the CGI provides a tax credit on BIC for the acquisition of patents and the latest generation manufacturing processes.

Previously, eligible businesses could receive a tax credit of 20% of the acquisition value of these economic assets. Article 3 of the tax annex increases this rate to 30%.

As a reminder, and in accordance with Article 113 of the CGI, SMEs are firms which carry out an annual turnover all taxes included lower than CFA1bn ($1.7m).

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