Legal and Tax Points: Remuneration of Shareholders’ Current Accounts
The shareholder’s current account can be defined as “the contribution in the current account consisting for the shareholder in granting advances or loans to the company by directly depositing funds or leaving sums at its disposal that he temporarily waives receiving [1].”
In practice, it is an agreement concluded between a company and its shareholders. This agreement, not being regulated by law and not being written, presents the risk that shareholders may prioritize their personal interests over the company’s interest.
However, while OHADA law does not regulate the shareholder’s current account, in Senegal, the fiscal legislator has regulated it by limiting the amounts deposited to the share capital. In other words, the amounts that shareholders make available to the company must not exceed the share capital. Additionally, full payment of the share capital is required for the deductibility of the interest remunerating the shareholder’s current account for SA (Société Anonyme) and SARL (Société à Responsabilité Limitée) [2].
And the interest rate paid cannot exceed the BCEAO (Central Bank of West African States) lending rate plus three points [3]. In other words, the remuneration rate of current accounts must be equal to the BCEAO discount rate + 3.
Example: If a company uses a rate X to remunerate the shareholder’s current account, this rate X must not exceed 6.5%.
BCEAO discount rate = 3.5%
If the rate used exceeds 6.5%, the difference must be included in the company’s taxable profit.
2.Presentation Period & Validity Period of a Check
The presentation period of a check is the period during which, the holder of a check retains all his recourse against the issuer or endorsers. This period is:
- 8 days for a check payable in the same city. Example: Check drawn on a bank branch in Dakar and presented for payment in Dakar.
- 20 days in the same country (check drawn in Kolda and presented for payment in Thiès).
- 45 days for a check payable in another State of the UEMOA (West African Economic and Monetary Union).
- 70 days for a check issued outside the UEMOA and payable in a State of the UEMOA.
As for the validity period, it is 3 years after the expiration of the presentation period [4].
3°) Legal and Tax Points: Built and Unbuilt Property Tax Contribution
The CFPB is a local tax, therefore collected for the benefit of local authorities. The tax base is the rental value of the property. This means the price that the owner could obtain from the property if he leased it.
The cadastral method defines the rental value. In the absence of this, the evaluation can also be done by comparison with premises whose rent has been regularly recorded or is widely known.
The rental value of factories and assimilated industrial establishments is determined in accordance with the provisions defined by order of the Minister in charge of Finance [5].
The calculation rate of the CFPB is 5% for buildings other than factories. It is 7.5% for factories and assimilated industrial establishments.
But the CGI reform provides for a single rate of 5%.
As for the CFPNB, it applies to registered or unregistered land and land with constructions not adhering to the ground, located within the perimeter of local authorities, urban planning groups, plotted centers, or centers designated by order of the Minister in charge of Finance. It is also due on land occupied by quarries, mines, and peat bogs Also, in ponds, salt marshes, and salt flats. Under construction land is also taxable to the CFPNB. Only if the completion of the works does not occur in the third year following the start of the works.
The tax base is the fair market value as of January 1st of the tax year, which is determined by the cadastral method or based on transfer acts subject to taxation dated less than three (3) years [6].
However, if undeveloped land has not been transferred for more than three (3) years, the fair market value will be determined by comparison with other land of the same nature. They must be located in the same locality, the fair market value of which will result from transfer acts dated less than 3 years.
The rate of the CFPNB is equal to 5% of the fair market value.
4°) Legal and Tax Points: Business License (Patente)
Formerly, it was calculated based on the turnover of the company and the value of the equipment.
Today with the CGI reform, the business license has changed its name. It is called the local economic contribution. It is calculated on the basis of the rental value of the premises. Its calculation takes into account the rental value of the premises. These premises must be used for the business activity of the company and a percentage of the turnover.
[1] Antoine Delabrière & Khaled Aguemon, “Le compte courant d’associé en Droit OHADA” in www.cercle-k2fr/etudes/le-compte-courant-d-asspocies-en-droit-ohada-12
[2] Article 9-2 of the General Tax Code of Senegal.
[3] Article 9-2 of the General Tax Code of Senegal.
[4] BCEAO-CHEQUES IMPAYES-MESURES in www.burkinapmepmi.com.
[5] Article 291 of the General Tax Code of Senegal.
[6] Article 297 of the General Tax Code.
