December 17, 2019
Equatorial Guinea’s Ministry of Finances issues new Ministerial orders on VAT and Corporate Income Tax
Equatorial Guinea’s Ministry of Finances issued two new Ministerial orders on 5 November 2019. The objective of the orders is to facilitate the analysis of information transmitted to the tax administration as part of its control operations.
The first Ministerial order (No. 06/2019) establishes additional measures on the application of value-added tax (VAT). The second Ministerial order (No. 07/2019) addresses the creation of Agents for the validation of corporate income tax (CIT).
This Alert summarizes the key provisions of the orders.
Ministerial order No. 06/2019 establishing additional measures on the application of VAT
The operations covered by VAT:
Article 315.3 of the General Tax Code (GTC) specifies the mandatory information that must appear when issuing an invoice, namely:
A period of three months is fixed, from the publication of this provision, for the adaptation by economic operators of their invoices, media and devices in general, to the provisions of this Ministerial order, i.e., no later than 4 February 2020.
Ministerial order No. 07/2019 concerning the creation of Agents for the validation of Corporate Income Tax (CIT)
Background of the environment prior to Ministerial order No. 7/2019
Consequences of this unwritten practice
Who are the validation agents of the CIT Return?
Approved CEMAC (Economic Community of Central African States) and OHADA (Organisation for the Harmonisation of Corporate Law in Africa) individuals or corporation (article 2) in charge of the verification and certification of the veracity of the CIT Returns before submission to the Ministry of Finance (art.1).
It should be noted that the CEMAC Regulation No. 8 of 22 March 2019 mentions that CIT Returns are certified in close and intelligent collaboration with the professionals of other trades who can participate in its preparation.
EY has already submitted its file to evidence competence as a validation agent. The list of companies and individuals approved as agents is expected to be published in January 2020.
The function of Validation Agent is incompatible with the status of civil servant or engaged staff (Tax inspector) by the Public Administration (art. 15). Accordingly, a tax inspector cannot be approved as a Validation Agent and will be unable to validate returns.
Responsibility of the Validation Agent
in case of commission of offenses (submission of false declarations, ...)
If a Validation Agent commits an offense, he/she will be subject to loss of the status of Validation Agent as well as potential criminal penalties.
For additional information with respect to this Alert, please contact the following:
FFA Ernst & Young, Malabo
Ernst & Young Advisory Services (Pty) Ltd., Africa ITS Leader, Johannesburg
Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London
Ernst & Young LLP (United States), Pan African Tax Desk, New York