• Corporate accounts
At the end of each fiscal year, the Board of Directors, the Management Board or the Manager has to draw up an inventory of the assets and liabilities available at that year closing date, the table of sales characterizing management, the transition table to the account’s heritage balances, the balance sheet and the tax schedule.
A General Assembly meeting for the validation of the accounts has to be held at least three months after the fiscal year has ended.
• Legal reserve
1. A 5% legal reserve of the net income must be upheld. This legal reserve ceases to be mandatory when it reaches 10% of the Capital stock.
Any modification occurring to the mandatory indications in the statutes must be notified and registered at the Trade Tribunal.
Mandatory indications include:
1° the nature of the Company;
2° the purpose of the company;
3°the name of the company;
4° the company headquarters;
5° the Company duration if it is limited to the Associates, as well as the consequences resulting into the closing of the business and the conditions of renewal;
6° the capital stock;
7 ° the identity of contributors in cash and, for each of them, the amount contributed, the number and value of shares handed over in exchange for each contribution;
8 ° the identity of contributors in kind, the nature and assessment of the contribution made by each of them, the number and value of shares handed over in exchange for each contribution;
9 ° the identity of industry providers and beneficiaries of special profits, as well as their nature and cause;
10 ° the number and value of social securities issued by distinguishing, if needed, the different categories of shares set up;
11 ° the provision related to the distribution of income, accumulation of reserves and sharing out of liquidation income;
12 ° operation, transformation, dissolution and liquidation procedures of the Company.
1. Tax Obligations
The person in charge of making payments or granting benefits has an obligation to make a statement of tax withholding to Burundi Revenue.
The following items are deducted from the taxable base:
• The payment or reimbursement of expenses incurred by the employee in direct connection with the employer business;
• Employee and employer shares of pension contributions paid by the employer on behalf of the employee;
• Employee and employer shares of health insurance contributions paid by the employer;
• Reimbursement of health care costs of the employee, their spouse and children, paid by the employer on behalf of the employee;
• Pensions, annuities or allowances paid by pension or social security fund;
• Travel costs not exceeding 15% of basic salary unless the employee has an employer’s travel grant in kind;
• Rent or allowances paid to a wage-earning or on his behalf, not exceeding 60% of the basic salary.
The employer who makes a tax withholding shall, within 15 days after the end of each month, fill in a declaration form and pay the amount deducted to the OBR, and must send the employee a pay slip showing the amount withheld.
Salary scales and applicable rates:
• 0% for the monthly income ranging from 0 to 150 000 BIF.
• 20% for the monthly income ranging from 150 001 to 300 000 BIF.
• 30% for the monthly income ranging from 300 001 BIF and above.
In the case of a part time employee, his monthly taxable income is at 15% but in every case, the monthly income that is below 150 000 BIF is not subject to tax.
Income tax payable on profit
Persons dealing with a commercial, industrial, craft or liberal profession are liable to pay tax on business profit. When determining the taxable profit, incurred expenditures can be deducted provided that these expenses:
• are incurred for needs related to business activity;
• represent actual and properly substantiated expenditures by a document evidence;
• result in a reduction of net assets;
• are related to the considered fiscal year.
The taxpayer liable for tax on business profits has to pay to the tax authority, every 30th of June, 30th of September and 31st of December of the ongoing fiscal year, projected down payments of 25% of the tax determined for the previous tax year. Every withholding made during the considered term is deducted from the advance payments. At the end, an overall assessment of the tax payable in respect of the results for the whole fiscal year is made.
Business profits are taxed at the following rates:
• 0% for the annual income ranging from 0 to 1.8 million BIF.
• 20% for the annual income ranging from 1 800 001 to 3 600 000 BIF.
• 30% for the annual income ranging from3 600 001 BIF and above.
There is an exception for service providers with no tax identification number. Their income is subject to a 30% withholding tax per month. The person is considered as an employer and has to declare and pay the withheld amount to the OBR not later than the 15th of the month following the one for which the tax was withheld.
Income Tax from movable assets
Company contributors get a dividend compensation for their contributions. Dividends are taxed at a rate of 15%.
Tax on Company earnings
Taxable earnings consist of:
• capital income;
• building rental income liable for tax on the corporate profits;
• liquidation profits.
Persons who are liable for tax on the company earnings have to file and submit their tax declaration not later than 31st of March of the following fiscal year.
The following items are deducted from taxable base:
• land registration fees;
• carried out withholding taxes;
• instalments paid as part of the tax;
• the tax credit paid abroad.
Company profits are taxed at a rate of 30%.
The transfer is perceived as a procedure of acquiring an apartment building of one or more floors. This is proved by a certificate signed between living persons or following a death occurring.
During proceedings concerning a real estate transfer, a 3% proportional duty is paid. Transfer duties are only applied to registered building property.
Transfer duties are established proportionally to the value of goods/services. In case of exchange, the duty is settled on the conventional property value included in the provision.
In every case, the tax base cannot be below the monetary value of the property that has been transferred.
In addition to proportional transfer duties, fixed fees are paid for getting a Trade Registry Certificate:
• 2 500 BIF for a one-page certificate
• 500 BIF for every additional page
• 500 BIF for every appendix document
• 1 000 BIF for cancellation
• 1 000 BIF for mortgage certificate renewal or registration of a new contract
• 500 BIF for any registration, note, annotation or cancellation of registration or any additional statement made after the registration certificate was produced.
Value Added Tax (VAT)
The VAT is applied to goods or services delivery as well as imports transactions.
Any individual or corporate body achieving an annual turnover higher or equal to 100 000 000 BIF is liable to the VAT.
The VAT standard rate is 18%.
A 10% intermediate rate is applied to foodstuffs import as well as import for farming purpose processed locally such as fertilizer.
In general exports are tax exempted.
The tax is payable, for goods or deliveries and the price receipt if it is fully or partially paid or during the billing when the invoice has been issued before the price is fully or partially paid.
Every person liable for the VAT must sign a tax declaration form within 30 days following the beginning of transactions.
Every taxable person shall present invoices or documents as proof, for goods or services delivered. These documents will be provided together with instalments of profits earned from those transactions.
The VAT is due and filed not later than the 15th of the month following the one during which the tax transaction has been made.
Employers and the staff pay social security contributions at the National Social Security Institute (INSS) if they are bound by an employment contract, whether it is for an indefinite or fixed term and whether they are nationals or foreigners. The wage share is deducted from the salary while the employer's share must be paid by the employer himself. In any case, it is collected and paid by the employer.
For contributions to INSS, a 4% rate is applied to the employee’ gross salary if it is less than 450 000 BIF per month. If the salary is higher, the rate of 4% is still applied to 450 000 BIF and; in any case, the contribution must not exceed 18 000 BIF. The rate above affects the employee’s monthly contributions.
The employer’s monthly contributions rate is 6% applied to the gross salary if it is less than 450 000 BIF per month. The same rate of 6% is applied to 450 000 BIF if the monthly salary exceeds 450 000 BIF.
Every employer must contract for their employees, a health insurance at an insurance company of their choice.
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