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Global transfer pricing guide

Transfer pricing - Gabon

01 Oct 2023

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Introduction to transfer pricing in Gabon
Transfer pricing rules
  • Transfer pricing documentation must be prepared in accordance with the following requirements:
    • The OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations;
    • Articles P-831 Bis, P-831 Ter, P-860, P-866, P-878, P-1010Bis, P-1010 Ter of the General Tax Code;
    • Instruction No. 001/MEPPD/SG/DGI/DLC of June 22, 2018 relating to documentation requirements with regard to transfer pricing.
  • Filing of TP Tax Returns before Tax Administration Service is mandatory for companies with foreign intercompany transactions.
OECD guidance
  • Gabon has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Gabon is the seventh African country to sign the Convention since it was opened for signature by all countries in June 2011.
  • Gabon draws on OECD principles to define its transfer pricing rules.
Transfer pricing methods
  • Methods accepted by the OECD are acceptable for demonstrating the arm's length nature of transactions.
Self-assessment
  • Gabon has a self-declaration system where the burden of proof is on the taxpayer to ensure that TP regulations are adhered to.
Transfer pricing documentation
Preparation of transfer pricing documentation
  • Composition of the documentation: local file, Master file, tax forms (DPP01, PT01 and PT02);
  • Tax form for CBCr (DPP02) is temporary removed from the list of documentation required;
  • Deadline for filling the TP documention is April 30, N+1.
Master and local file
  • Master file and Local file are to be provided by the taxpayer as part of the TP documentation. There is no threshold of volume of transactions.
  • CBCr is applicable for groups that achieve consolidated revenue of at least 700 million euros.[Temporary removed from the list of obligation required]
Some risk factors for challenge
  • Persistent losses in any entity.
  • Transactions with low tax jurisdictions resident related parties.
  • Business restructurings, or changes in TP model, can also trigger a challenge but needless to say, businesses can evolve, and if the previous TP method no longer appears the most appropriate, it should always be reviewed, rather than being ignored for the sake of maintaining consistency, high proportion of intra-group expenses compared to turnover, low level of net margin left to the subsidiary, invoicing on a flat-rate basis, etc.
  • Global marketing (or administrative) expenses payments if locally this type of expense are also incurred.
Penalties
  • Failure to comply with the documentary obligations in terms of transfer pricing exposes the company concerned to a penalty equal to 5% of the total amount of the company's intragroup exchanges with a minimum of 65,000,000 FCFA per fiscal year;
  • Failure to comply with the documentary obligations relating to the country-by-country declaration exposes the company concerned to a penalty equal to 0.5‰ of the consolidated turnover excluding tax, capped at 100,000,000 CFA francs per fiscal year. » [ However, this declaration is suspended for the moment.]
  • Response time after formal notice to declare or complete the documentation set by the Instruction at 60 days (2 months).
Economic analysis and how to demonstrate an arm’s length result
  • The administration's expectations are provided for in instruction No. 001/MEPPD/SG/DGI/DLC of June 22, 2018 relating to documentary and reporting obligations with regard to transfer pricing.
Advance Pricing Agreements (APAs), dispute avoidance and resolution
  • Gabonese Tax administration can sign APAs.
Exemptions
  • No threshold.
Related developments
Digital services tax
  • No specific developments.
The profit diversion compliance facility (PDCF)
  • Non Applicable.
SAT and taxpayer behaviour
  • The vigilance of the tax administration has been reinforced on compliance with transfer pricing obligations with new provisions in the tax code since 2015 and specific tax instructions in 2018.

For further information on transfer pricing in Gabon please contact:

Degbey_Adrien.png

Adrien Degbey

Partner, Certified Public Accountant(Fr)

M +241 (0) 77 63 72 55
T +241 (0) 11 74 28 31 | +241 (0) 11 76 15 68 
E adrien.degbey@ga.gt.com

MBA_Alex.png

Alex Mba Ndong

Partner, Certified Public Accountant(Fr)

M +241 (0) 74 84 05 70 
T +241 (0) 11 74 28 31 | +241 (0) 11 76 15 68
E alex.mba@ga.gt.com
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