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Burundi

Country Name: Republic of Burundi
Currency: Burundian Franc (BIF)
Primary Tax Authority: Office Burundais des Recettes (OBR) – Burundi Revenue Authority
Key Legislation:

  • General Tax Code
  • Value Added Tax (VAT) Act
  • Investment Code
  • Customs Code
  • Tax Procedures Code

Fiscal Authority Allocation

Centralized Fiscal System:
Burundi operates a centralized tax system. The Burundi Revenue Authority (OBR) administers and collects taxes, including corporate income tax (CIT), personal income tax (PIT), value-added tax (VAT), and customs duties.

Corporate Income Tax (CIT)

Standard Rate: 30%
Burundi imposes a corporate income tax rate of 30% on the taxable income of resident companies and non-resident companies with a permanent establishment in the country.

Corporate Forms and Taxation:

  1. Resident Companies: Taxed on worldwide income.
  2. Non-Resident Companies: Taxed only on Burundi-sourced income.

Exemptions and Incentives:

  • Investment Incentives: Under Burundi’s Investment Code, tax holidays, customs duty reductions, and VAT exemptions are offered to companies investing in key sectors such as agriculture, manufacturing, tourism, and infrastructure.
  • Export Processing Zones (EPZs): Companies operating in Burundi’s EPZs benefit from CIT exemptions, customs duty relief, and VAT exemptions on imported capital goods and raw materials.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 18%
Burundi imposes VAT at a standard rate of 18% on most goods and services. VAT applies to domestic production and imports.

Reduced Rates:
A reduced VAT rate of 10% may apply to certain basic goods such as foodstuffs and essential commodities.

Exemptions:
Certain goods and services, such as healthcare, education, and financial services, are VAT-exempt. Exports are zero-rated, allowing businesses to reclaim VAT paid on inputs used in the production of export goods.

Personal Income Tax (PIT)

Progressive Rates:
Burundi applies a progressive personal income tax system to residents’ worldwide income and non-residents’ Burundi-sourced income.

Resident Tax Rates for 2023 (Annual Income):

  • Up to BIF 1,800,000: 0%
  • BIF 1,800,001 to BIF 3,000,000: 20%
  • Above BIF 3,000,001: 30%

Non-Resident Tax Rate:
Non-residents are taxed at a flat rate of 15% on Burundi-sourced income.

Deductions and Allowances:
Taxpayers may deduct contributions to pension funds, social security, and allowable personal expenses such as medical costs and donations.

Additional Mandatory Contributions

Social Security Contributions:
Employers and employees must contribute to Burundi’s social security system, which provides pensions and other social welfare benefits.

  • Employer Contribution: 6% of gross salary.
  • Employee Contribution: 4% of gross salary.

Withholding Taxes

  • Dividends: 15% for residents and non-residents
  • Interest: 15% for residents and non-residents
  • Royalties: 15% for residents and non-residents
    Burundi imposes withholding taxes on payments to residents and non-residents, including dividends, interest, and royalties. Withholding tax rates may be reduced under double taxation agreements (DTAs).

Transfer Pricing Rules

Burundi follows the arm’s-length principle for transactions between related parties. Transfer pricing documentation is required for companies engaged in significant cross-border related-party transactions, ensuring that such transactions are conducted at market value.

Special Tax Regimes

  • Export Processing Zones (EPZs): Companies operating in EPZs benefit from CIT holidays, VAT exemptions, and customs duty reductions on imported raw materials and equipment for up to 10 years.
  • Investment Incentives: Burundi’s Investment Code offers tax holidays, reduced CIT rates, and customs duty exemptions for companies investing in strategic sectors like agriculture, renewable energy, tourism, and infrastructure.

Other Taxes

  • Customs Duties: Burundi imposes customs duties on imported goods, with rates varying from 5% to 30% depending on the type of goods. Essential goods and industrial inputs may benefit from reduced or zero customs duties.
  • Excise Taxes: Excise taxes are levied on goods such as alcohol, tobacco, petroleum products, and luxury items.
  • Property Tax: Local authorities impose property taxes on land and buildings based on their market value.

Double Taxation Agreements (DTAs)

Burundi has signed a limited number of double taxation agreements (DTAs) with countries including Belgium, Rwanda, and certain East African Community (EAC) members. These agreements help reduce withholding taxes on cross-border income and prevent the double taxation of income earned in Burundi and other jurisdictions.

Local Taxes

Local authorities in Burundi may impose property taxes, business registration fees, and local service levies. However, most major taxes, including CIT, PIT, and VAT, are centrally administered by the Burundi Revenue Authority (OBR).

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed within three months following the end of the financial year. Personal income tax returns are generally due by March 31st. VAT returns are typically filed quarterly, depending on the size of the business.

Penalties for Late Filing:
Penalties for non-compliance or late filing include fines and interest on unpaid taxes. The OBR imposes interest at a rate of 1% per month on overdue taxes, with additional penalties for tax evasion or underreporting.

Recent Developments

Focus on Agricultural Development:
Burundi is actively promoting investment in agriculture, one of the country’s key sectors. Tax incentives such as CIT holidays, VAT exemptions, and customs duty reductions are available for companies investing in agricultural development and modernization.

Renewable Energy and Infrastructure:
To support economic growth, Burundi is encouraging investment in renewable energy projects, particularly solar and hydropower. Companies involved in infrastructure development, including roads, energy, and telecommunications, benefit from CIT reductions and customs duty exemptions.

Digital Taxation Initiatives:
The Burundian government is modernizing its tax administration by introducing electronic filing systems and implementing measures to capture revenue from digital transactions and e-commerce.

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