Verified Facts
The tax rates in Burkina Faso range from 10% to 25% for personal income tax, with a corporate tax rate of 27.5% and a value-added tax (VAT) rate of 18%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Burkina Faso has a territorial taxation system, where only income earned within the country is subject to tax, regardless of the taxpayer's residency status. However, individuals who are considered tax residents are taxed on their worldwide income. To be considered a tax resident, an individual must have a permanent home in Burkina Faso, or spend more than six months in the country during a calendar year. Tax residency rules are important for individuals and businesses to understand, as they can affect tax liability and compliance requirements.
The tax system in Burkina Faso is administered by the Direction Générale des Impôts (DGI), which is responsible for collecting taxes, enforcing tax laws, and providing taxpayer services. The DGI also provides guidance on tax compliance and offers support to taxpayers who need help navigating the tax system. Tax laws and regulations are subject to change, so it's essential for taxpayers to stay informed and consult with a qualified tax professional to ensure compliance with all tax requirements.
Personal Income Tax
| Income Bracket (XOF) | Tax Rate |
|---|---|
| 0 - 150,000 | 10% |
| 150,001 - 300,000 | 15% |
| 300,001 - 500,000 | 20% |
| 500,001 - 1,000,000 | 22.5% |
| above 1,000,000 | 25% |
| Taxpayers in Burkina Faso are entitled to various deductions and allowances, including a personal allowance of XOF 50,000 per month, and dependent allowances of XOF 20,000 per month per dependent. Tax returns must be filed by April 30th of each year, and taxpayers can file online or through a tax agent. It's essential to keep accurate records and supporting documentation, as the DGI may request additional information or conduct audits to verify tax compliance. |
Corporate & Business Tax
- The corporate tax rate in Burkina Faso is 27.5%, with a reduced rate of 20% for small and medium-sized enterprises (SMEs) with annual turnover of less than XOF 100 million.
- Small business incentives are available, including a tax holiday of up to three years for new businesses in certain sectors.
- Free zones are available for businesses that export at least 80% of their production, with benefits including exemption from customs duties and reduced taxes.
- Registration requirements include obtaining a tax identification number and registering with the Chamber of Commerce.
- Businesses must also comply with value-added tax (VAT) requirements, including registering for a VAT number and filing regular VAT returns.
VAT / Sales Tax
- The standard VAT rate in Burkina Faso is 18%, with reduced rates of 10% and 5% for certain goods and services.
- Exemptions are available for basic necessities such as food, healthcare, and education.
- Tourist refund schemes are available for foreign visitors who purchase goods and services in Burkina Faso, with a refund rate of up to 15%.
- Businesses must comply with VAT registration requirements, including obtaining a VAT number and filing regular VAT returns.
For Expats & Foreign Workers
- Tax residency rules apply to expats and foreign workers, who are considered tax residents if they spend more than six months in the country during a calendar year.
- Double taxation treaties are in place with several countries, including France, Belgium, and Canada, to avoid double taxation of income.
- Social security contributions are mandatory for all employees, including expats and foreign workers, with a contribution rate of 17.5% of gross salary.
- Remittance rules apply to foreign workers who send money abroad, with a tax rate of up to 10% on remittances.
- Expats and foreign workers must also comply with immigration requirements, including obtaining a work permit and registering with the local authorities.
- Tax compliance is essential for expats and foreign workers, who must file tax returns and pay taxes on their income earned in Burkina Faso.
Crypto & Investment Income
- Investment income, including dividends, interest, and capital gains, is subject to income tax at the individual's marginal tax rate.
- Dividends are subject to a withholding tax of 10%, which can be reduced or eliminated under double taxation treaties.
- Cryptocurrency is considered a commodity and is subject to capital gains tax at a rate of 10% or included in income tax.
- Taxpayers must declare their crypto assets and investment income on their tax returns and pay taxes on their gains.