Equatorial Guinea's Financial Law 2020 (FL 2020) was published on 12 December 2019 through Law n°5/2019.

FL 2020 sets out the main measures adopted by the State to promote development objectives as well as integrate the reforms initiated by mutual agreement with the International Monetary Fund.

From a fiscal viewpoint, FL 2020 reflects the consolidation of measures adopted in the previous FL 2019, since these measures are reaffirmed or clarified and a special regime for infringements/sanctions has been created. FL 2020 also broadens the local tax base.

Key provisions include:

• Increase in the withholding tax rate on income paid to nonresidents
  • Initially the tax rate was 10%. (see former articles 168 and 461 of the General Tax Code). When FL 2019 was published, this rate was increased to 20% regardless of the category of nonresident taxpayer. It is now set at 20% for natural persons and 15% for legal persons.
• Tax on the use of plastic bags: 25 XAF per unit
• Tax on telecom services: 10% (excluding Value-Added Tax)
• Reconfiguration of the car tax
  • Vehicles up to 50 horsepower (hp):
    12.5%
  • Vehicles between 51 and 100 hp:
    15%
  • Vehicles between 101 and 150 hp:
    17.5%
  • Vehicles between 150 and 200 hp:
    20%
  • Vehnicles with more than 200 hp:
    25%

In addition, an annual registration requirement is established with taxation at a rate of 1% on the value of the vehicle for the first five years and 2% from the sixth year.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

FFA Ernst & Young, Malabo

• Alexis Moutome
  alexis.moutome@gq.ey.com
• Maxime Mbassi
  maxime.augustin.mbassi@gq.ey.com
• Davy Ondo
  georges.obiang@gq.ey.com

Ernst & Young Advisory Services (Pty) Ltd., Africa ITTS Leader, Johannesburg

• Marius Leivestad
  marius.leivestad@za.ey.com

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

• Rendani Neluvhalani
  rendani.mabel.neluvhalani@uk.ey.com
• Byron Thomas
  bthomas4@uk.ey.com

Ernst & Young LLP (United States), Pan African Tax Desk, New York

• Brigitte Keirby-Smith
  brigitte.f.keirby-smith1@ey.com
• Dele Olagun-Samuel
  dele.olaogun@ey.com

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ATTACHMENT

PDF version of this Tax Alert