VAT was introduced in Equatorial Guinea on 28 October 2004 in the Tax Code in accordance with CEMAC regulations (Directive No 1/99CEMAC- 028-CM-03 dated 17 December 1999, which harmonises the legislation of the state related to VAT and excise duties). It is locally referred to as ‘Impuesto sobre el Valor Añadido (IVA)’.
Rates and scope
The standard VAT rates are 15%, 6% and 0%.
The rate of 0% is applicable to certain medical products and equipment. The rate of 6% is applicable to a list of basic consumables and books.
All operations performed in Equatorial Guinea are subject to VAT, unless they are included in the list of exemptions provided by the Equatorial Guinea Tax Code.
In practice, Tax authorities do not apply VAT in the oil and gas sector as defined by the Tax Code. There is no written confirmation of this practical position.
VAT is generally chargeable on:
goods sold or assigned for valuable consideration;
self-consumed goods and services;
other operations carried on by individuals or legal entities in their sphere of business, professional and individual activities, including all kind of extraction activities.
Individuals and legal entities engaged in economic activity, regardless of the nature or output, who are classified as taxpayers (or their representatives) pursuant to the Tax Code, must register with the Tax Administration and obtain a Tax Identification Number (In Spanish ‘Número de Identificación Fiscal’).
A branch of a company registered in terms of Equatorial Guinea legislation must also be registered with the tax administration.
Nonresidents carrying on activities (sales operations or services) in Equatorial Guinea are liable for VAT. A nonresident taxpayer must appoint a solvent and accredited tax representative residing in Equatorial Guinea, who will be jointly liable for the payment of the VAT.
If no tax representative is appointed, the VAT and its corresponding penalties must be paid by the client of the provider concerned.
Advertising and prices
Suppliers’ invoices must clearly state the amount of VAT, separate from prices, in order to allow the customer to deduct input VAT.
Calculation of output tax VAT is calculated on:
goods – all amounts or securities and all benefits, goods and services received or pending receipt in counterpart of the delivery;
services – all amounts and benefits received and, if applicable, the value of goods that are consumed in the execution of said services;
imports – the customs value, including all rights and duties paid upon entry, except for VAT.
Exemptions and zero-rating
The Equatorial Guinea Tax Code provides for an exhaustive list of goods exempted from VAT.
The following are exempt from VAT:
raw agricultural goods;
the following operations, provided they are subject to some specific taxes:
sale of products resulting from soil and subsoil extraction activities;
operations transmitting real estate between individuals that do not qualify as real estate developers and that are subject to Asset Transfer Tax;
interest generated by foreign loans;
interest generated by deposits of nonprofessional clients in credit or financial establishments;
travellers with small imports when the value of the goods does not exceed XAF500,000;
banking, insurance and reinsurance operations, which are subject to a specific tax;
operations transferring real estate and real estate rights and mutations of goodwill that are subject to Asset Transfer Tax or other equivalent taxes;
staple commodities listed in the Tax Code;
service provided in the field of school or university teaching by public and private establishments or similar agencies;