Equatorial Guinea has adopted Tax Code, Law No. 1/2024, representing a major shift in the country’s tax framework, APA can report on Thursday.
It is designed to modernise the system, encourage compliance, and foster economic growth, the Centurion Law Group (CLG) said in a statement.
These changes, ranging from reduced corporate tax rates to new personal income tax brackets and a revamped oil and mining regime, will impact businesses and individuals differently, depending on their size, structure, and sector, it said.
According to the highlights of the new code, under corporate tax regime, the rate has been reduced from 35% to 25%, easing the burden on companies while introducing stricter rules on exemptions, which will require careful planning to maximise benefits.
Under the Minimum Income Tax (MIT), businesses are now required to make two annual payments, with a simplified option for smaller taxpayers. Understanding eligibility and structuring compliance will be crucial for cost management, CLG said.
In respect of Personal Income Tax, adjusted tax brackets and rates mean employees and employers must adapt to new payroll structures, which CLG said it can help implement effectively.
Under Oil and Mining Regime, non-resident contractors and subcontractors are subject to a 10% withholding tax, requiring proactive financial planning to mitigate potential challenges.
In contrast, resident contractors are subject to 3% withholding tax.
CLG said these updates are designed to create a more sustainable and equitable system but may bring operational challenges.
CLG said although navigating these updates may seem complex, these changes could influence clients’ tax obligations, financial planning, and reporting processes.
WN/as/APA