Gabon

The workday in Gabon is 8 hours with a 5-day work week.

A maximum of 20 hours of overtime per week in cases of exceptional, urgent or seasonal work due to extraordinary overload of work or to the necessity of maintaining/increasing production level, or lack of staff.

Generally, employees must be notified of termination according to the following schedule:

• less than 1 year of service: 15 days
• 1 to 3 years of service: 1 month
• 3 to 5 years of service: 2 months
• 5 to 10 years of service: 3 months
• 10 to 15 years of service: 4 months
• 15 to 20 years of service: 5 months
• 20 to 30 years of service: 6 months

Income tax in Gabon is determined according to the taxpayer’s family charges (with a maximum of six dependent children) and according to income brackets. Residents are taxed on worldwide net income. Non-residents are taxed only on Gabon-source income. 

Gabon considers the situation of a taxpayer on January 1 or at the end of the same year in the event they are getting married, or where there has been an increase in the number of dependents. The individual tax rates on ordinary income are progressive and range from 0% to 35% for both residents and non-residents. There is also a complementary tax known as the TCTS, the rate being 5%. Individuals having their usual abode or spending at least six months in Gabon are considered resident. 

An individual normally is considered to have his/her usual abode in Gabon if his/her principal residence, main business or professional activity or center of financial interests is located in Gabon. Taxable income includes employment income, investment income, capital gains, income from real estate and business income. 

Both the employer and the employee must make social security contributions, with the employer deducting the employee’s portion from salary payments. The contribution amounts are as follows:

Contributions to the National Fund for Social Security (CNSS) are payable at a rate of 2.5% for the employee and 16% for the employer (for retirement, work injury, medicine, hospital costs, & family allowances), with an annual upper limit of XAF18 million, including benefits in kind and excluding reimbursements of expenses and allowances 

Contributions to the National Fund for Health (CNAMGS) are payable at a rate of 2% for the employee and 4.1% for the employer, with a monthly upper limit of XAF2.5 million.

CNSS retirement insurance: 1.5%

National Disease Insurance and Social Guarantee Fund (CNAMGS) health insurance: 1%

Personal Deductions: Alimony, pension contributions (subject to restrictions), and other allowances and deductions are typically dependent on family circumstances.

Business Deductions: Unless expressly banned by the General Tax Code (GTC), expenses are deductible unless there is a specified threshold that has been surpassed, there is insufficient documentation, the expense is not allowable, or there is another reason.

Income tax in Gabon is determined according to the taxpayer’s family charges (with a maximum of six dependent children) and according to income levels. In the case that a taxpayer gets married or has more dependents than usual, Gabon considers their status on January 1 as well as at the conclusion of the same year. VAT in Gabon is imposed on the supply of goods and services and on the import of goods or services. Tax rates range from 0% to 35%, but the standard rate is 18%.

Additionally, there is a supplemental tax called the TCTS, with a 5% rate and then a reduced rate of 10% applies to some goods, including mineral water produced in Gabon, imported meat and chickens, sugar, laptops and desktops, canned vegetables and fruits and replacement parts for cars, etc. A 5% rate applies to cement, and a 0% rate applies to qualifying exports that have been properly declared to customs and international carriages.

PS: Payroll Cycle in Gabon is Monthly.

Dividends: Dividends paid to shareholders are taxed at 20%. The Central African Economic and Monetary Community (CEMAC), which is made up of Cameroon, the Central African Republic, Chad, Equatorial Guinea, Gabon, and Congo (Brazzaville), nevertheless, imposes a 10% rate on dividends given to company shareholders who reside there or in another CEMAC member state, where: 

1. The shareholder holds at least 25% of the shares of the payer 
2. The head offices of the shareholder and the payer are in Gabon or another CEMAC state
3. The shares remain registered in the name of the shareholder for at least two consecutive years.

Interest: A Gabonese business must pay 20% WHT on the gross amount of any interest it pays to a non-resident entity (excluding tax on turnover).

Royalties: A 20% WHT is applied to commissions, consulting fees, and fees for services rendered in Gabon that are paid by a Gabonese corporation to a non-resident entity.

Technical Service Fees: Technical service fees are liable to a 9.5% WHT if they are paid by a Gabonese firm to a resident entity that is subject to corporate income tax but not value-added tax (VAT). A 20% WHT is applied to technical service fees that a Gabonese company pays to a non-resident organization. The fees are also subject to an 18% VAT if the technical services rendered by a resident or non-resident entity are used in Gabon.