Group and branch registration
Value added tax (VAT) was introduced in Chadian legislation on 1 January 2000 by Law No 024/PR/99 to replace Turnover Tax.
A foreign company can establish economic activities in Chad either by setting up a branch, or through a Chadian legal company (subsidiary).
There are specific VAT rules relating to petroleum conventions.
Rates and scope
Rates There are two rates:
Consequently, the branch will be registered in the Trade and Personal Credit Register and will have a legal representative who will perform several administrative formalities (administrative authorisation for pursuing a commercial activity, foreign merchant’s card, etc.).
the standard rate is 18% on a without-taxes basis and applies to all taxable operations; and
the 0% rate applies to exports and related international transportations.
Financial operations carried out between Chad and a foreign country are subject to either a declaration or an authorisation.
The setting up of every direct investment in Chad is subject to a prior declaration to the Ministry of Finance by:
natural or legal persons having their usual residence or head office in a foreign country;
companies in Chad that are controlled directly or indirectly up to 10% by a foreign firm; or
foreign companies’ establishments in Chad.
An operation performed in Chad, which constitutes an economic activity and for which payment is made, unless included in the list of exemptions, is liable for VAT, even if the residence of the natural person or the registered office of the legal entity is located outside Chad.
The tax basis corresponds to the amount of money paid for the provision of goods or services.
For importations, the tax base corresponds to the customs valuation (price of sale of goods plus costs of insurance and transportation, etc. until arrival in Chad), plus the possible excise duties.
Every person who is liable for paying VAT has to make a declaration of existence and register with the Directorate of Large Companies (‘Direction des Grandes Entreprises’) within 15 days following the beginning of its activity.
VAT shall be applied where the service is provided or utilised, or where the product is manufactured or first put on the market.
Where such place is different from the head office or the main establishment, the taxpayer shall be bound to appoint a solvent representative accredited by the tax authority of the said place, resident in Chad, and who shall be jointly and severally liable for VAT.
In case of failure to appoint a representative, VAT and, where applicable, the attendant penalties shall be borne by the client on behalf
of the taxpayer having no fixed or permanent professional establishment in Chad.
It is not required to have a bank account in Chad.
Any termination, transfer or modification of the activity is subject to a declaration.
The taxpayer must deliver an invoice for every taxable operation entered into with other taxpayers. The invoice must show, inter alia, the amount without taxes, the applicable VAT rate and VAT amount, and the amount inclusive of VAT.
If some operations of the taxpayer are not subject to VAT, the invoice must separate the operations that are subject to VAT and the ones that are not.
Exemptions and zero-rating
The following supplies fall outside the scope of the VAT system:
sales of products that are directly made by farmers, cattle farmers or fishermen to consumers from their culture, their farming or their fishing and are not converted;
import and sale operations of newspapers and periodicals other than advertising revenue;
social, medical, educational, sports, philanthropic or religious services or operations provided by nonprofit organisations in which management is voluntary and unselfish, and when these operations are attached directly to the collective defence of moral or material interests of their members; however, operations carried out by these organisations