ICT Sector
Phase I: Incubation phase of the start-up (0 to 5 years)
This phase is a five (05) years phase during which eligible start-ups enjoy exemption from all taxes, duties, levies and payments with the exception of social security contributions.
Also, where by the end of the 5 years incubation phase the owners of a start-up decide to transfer the ownership of the start-up to third parties, they shall benefit from a reduced rate of 10% on capital gains tax.
Where the company is sold to a corporate body the corporate income tax rate applies as the capital gains tax rate at 33%, while a 16.5% rate applies to physical persons. The application of the reduced rate of 10% on capital gains brings these rates down to 22% and 6.5% respectively.
Phase II: Operational phase of the start-up (5 to 10 years)
At the entry of the operational phase, after the first five (05) years, the start-up benefits for a further period of five (05) years, of the following incentives:
- Exemption from the business licence tax (known in French as ‘‘patente’’);
- Exemption from tax registration on instruments relating to the registration, extension or share capital increase of the start-up;
- Exemption from all tax and employer’s charges on salaries paid to their employees with the exception of social security contributions;
- Application of a reduced company tax rate of 15% (instead of 33%);
- Application of a 50% rebate on the basis of the tax assessment of the advance payment (2.2% actual tax regime and 5.5% for simplified tax regime) and the minimum company tax collection;
- Income tax credit of 30% concerning research and innovation expenses capped at one hundred (100) million CFA francs.
- Application of a reduced rate of income tax on movable capital revenue of 5%, on dividends paid to shareholders and interest paid to investors.
Phase III: End of operational phase
At the end of the five (05) years operational phase, the business reverts to the ordinary tax regime applicable to all enterprises.
How To Benefit From This?
The start up owner must apply to the states Accredited Management centers (to visit Delegation of Small and Medium size enterprise in your community to locate one) . This center must approve eligibility before a start up can benefit from these incentives.
