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Equatorial Guinea

  • importation and sale of school or university books;

  • sale of newspapers and periodicals;

  • rental of unfurnished houses;

  • social, educational, sports, cultural, philanthropic or religious services or operations;

  • amounts deposited by the Public Treasury into the Central Bank in its capacity as currency issuing bank, as well as proceeds of the operations of the said currency issuing bank; and

  • operations relating to the international traffic of:

  • ships or vessels used in industrial or commercial activities on the high seas;

  • salvage or rescue ships; and

  • aircraft and ships used for international transit operations and related services, in accordance with the provisions of the CEMAC customs code.

Zero-rated supplies

The zero rate of VAT applies to certain medical products and equipment. The zero rate also applies to exports where the returns have been certified by the Customs Services.

Input tax

Input tax allowed

In general, the right of deduction of VAT is allowed on :

  • VAT paid on invoices related to transactions that have a deduction right (the taxpayer has a taxpayer number etc);

  • VAT stated on purchase invoices issued to taxpayers by sellers, whenever these are legally authorised to include the tax in the said invoices;

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  • VAT paid at the time of the import; and

  • VAT levied on the invoices of equipment goods.

Input tax expressly denied

Restrictions apply to the recovery of input VAT incurred on the purchase of private vehicles, as well as their spare parts and their respective repair expenses.

Input tax is also denied when:

  • the invoice does not show the name of the client concerned;

  • the input tax is not claimed in the correct VAT period (two years after the year of enforceability of the VAT); or

  • the VAT relates to exempt or zero- rated supplies.

Partial exemption

Taxpayers who are partially or fully VAT exempted must apply a pro rata factor to the amount of the deductible VAT. The pro rata factor will be set on an annual basis, being the ratio of:

  • the amount of income for transactions subject to VAT, as the numerator; and

  • the total amount of income of any kind obtained by the taxpayer, as the denominator.

Adjustments

When a component of the fixed assets for which input tax has been deducted is no longer part of the fixed assets of the company or its removal from the assets is not supported, the company must, before the end of the fourth year of acquisition, pay VAT equal to the tax fraction previously deducted.

The fraction is equal to the difference between the total deductions made and one fifth per year or per fraction of a year since it was acquired.

In the case of an assignment, if the goods constitute a component of the purchaser’s fixed assets, the latter can deduct the VAT in the amount reverted by the seller as regularisation, as long as he is also a VAT taxpayer.

The seller, as a condition for making the deduction, must issue a statement to the purchaser reflecting the amount of the deductible VAT.

Imports

According to the Tax Code, import is understood as any entry of goods within the customs territory of Equatorial Guinea.

VAT liability on imports arises when the goods and merchandise are introduced into the national territory, as defined in the CEMAC customs code. The VAT payable is calculated on a VAT base equal to the customs value, including all rights and duties paid upon entry, except for VAT.

Exports

The zero rate related to exports is applied only if the return has been certified by the Customs Services.

No refunds are allowed to foreigners.

Place, time and value of supply

Place of supply

The Tax Code is based on the principle of territoriality, according to which all operations performed in Equatorial Guinea are subject to VAT.

A sales operation is treated as performed in Equatorial Guinea when it has been carried out under the conditions for the delivery of goods, or in the case of other operations, when the service provided, right assigned or object leased is used or put into operation in Equatorial Guinea.

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