Tax Residency in Senegal
1. Criteria for Determining Tax Residency in Senegal
According to Article 1 of Senegal's General Tax Code (CGI), an individual is considered a tax resident if they meet any of the following criteria:
- They have their habitual residence in Senegal.
- They have their main professional activity in Senegal.
- They have the center of their economic interests in Senegal.
The CGI defines "habitual residence" as the place where an individual normally lives, as evidenced by their family ties, social relations, and professional activities. "Main professional activity" refers to the activity that generates the majority of an individual's income. "Center of economic interests" is determined by considering the location of an individual's assets, investments, and business activities.
2. Impact of International Tax Treaties on Tax Residency Criteria
Senegal has entered into several double taxation agreements (DTAs) with other countries. These DTAs may modify or provide exceptions to the standard criteria for tax residency as defined in domestic law.
For example, the DTA between Senegal and France provides that an individual is considered a resident of Senegal if they have their "permanent home" in Senegal. This definition is broader than the "habitual residence" criterion in the CGI, as it includes individuals who may not be physically present in Senegal for a majority of the year.
Another example is the DTA between Senegal and the United States. This DTA provides a tie-breaker rule for individuals who are considered residents of both Senegal and the United States under their respective domestic laws. The tie-breaker rule states that an individual is considered a resident of the country where they have their "closer personal and economic ties."
These treaty-specific modifications aim to provide clarity and prevent double taxation by establishing clear rules for determining tax residency in cases involving cross-border activities. They reflect the mutual agreement between Senegal and the other country to facilitate tax compliance and enhance economic cooperation.
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