Registered taxpayers who are assessed on the basis of actual results can deduct input TCA that was paid on goods and services used to produce its output from the TCA due on its output.
The input TCA paid has to satisfy the following conditions in order to be deductible.
- It must appear on an invoice duly delivered by a registered supplier assessed on actual basis and whose tax registration number is stated on the invoice. This requirement does not apply to foreign suppliers.
- In the case of imports, the TCA must appear on the declaration confirming the release of goods or merchandise for sale on local market or for use, that is forms D3, D43 and T6 bis.
- In the deliveries to oneself, the TCA must appear on the special declaration made by the tax payer himself.
The right to deduct input TCA takes effect at the same time that the output TCA is due from the supplier.
The exportation of products on which TCA has been levied gives rise to the right to deduct the TCA so levied and eventually to a tax credit. The same applies to TCA levied on services consumed in the process of producing, transforming or conditioning the goods exported as well as TCA levied on transport and transit operations associated with the exported goods.
TCA levied on the following operations is not deductable.
- Lodging, feeding, restaurant, entertainment, shows and acquisition, hiring, maintenance or repairs of tonning vehicles. Companies operating in related sector like hotels, restaurants, car hiring companies, etc can however, deduct input TCA from output TCA on their activities.
- The importation of goods and merchandise re-exported in the same condition.
- Goods and services purchased by the enterprise but used by third parties, management or the members of staff of the enterprise.
NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought for specifics.
For further information contact Mr Nico Halle, Tel: +237 42 64 79 or Fax: +237 43 26 34 or enter text search 'Nico Halle Law Firm' and 'Mondaq Business Briefing'.