Capital Gains Taxation in Senegal
In Senegal, capital gains taxation is governed by the General Tax Code (CGI), specifically Article 14. Capital gains are defined as profits realized from the disposal of movable or immovable property, including:
- Real estate
- Stocks and bonds
- Business assets
The CGI does not distinguish between short-term and long-term capital gains.
Calculating Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price and the acquisition cost of the asset. The formula is:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Expenses related to the sale, such as brokerage fees and legal fees, can be deducted from the selling price. Additionally, improvements made to the asset during ownership can be deducted from the acquisition cost.
Tax Rates
Capital gains are taxed at a flat rate of 20%. However, certain exemptions and reductions may apply, such as:
- Gains from the sale of a principal residence are exempt up to a certain amount.
- Gains from the sale of agricultural land are taxed at a reduced rate of 10%.
Legal Framework
The taxation of capital gains in Senegal is outlined in the following articles of the CGI:
- Article 14: Definition of capital gains
- Article 15: Calculation of taxable capital gains
- Article 16: Tax rates
These provisions aim to ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals. By applying a flat tax rate to capital gains, Senegal seeks to maintain a neutral tax treatment across different sources of income and promote investment.
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