Employers are responsible for withholding income tax from employee salaries under the Pay-As-You-Earn (PAYE) system. Withheld taxes must be remitted to the Burundi Revenue Authority (OBR) within 15 days of the end of the month in which the tax was due. Employers must also file annual income tax returns with the OBR.

Social Security Contributions

Employers in Burundi must make the following Social Security contributions on behalf of their employees:

• INSS (Pension and Disability): 6% of the employee's gross salary, capped at BIF 450,000 per month.
• Occupational Risk Insurance: 3% of the employee's gross salary, capped at BIF 80,000 per month.
• Additional Occupational Risk Insurance (for arduous work): 8.8% of the employee's gross salary.

Other Taxes and Contributions

Employers are subject to a professional tax on the total salaries they pay. The rates vary depending on the business sector. Employers may also be liable for a Skills Development Levy (SDL) at a rate of 1% of gross payroll, based on business activities.

Important Considerations

Employers must register with the OBR and the INSS for tax purposes. Failure to comply with tax and social security obligations can result in significant penalties and interest charges. It is strongly recommended to consult with a tax advisor or accountant in Burundi to ensure full compliance with all relevant regulations.

Employees in Burundi are subject to mandatory deductions from their salaries. These deductions include Income Tax (Impôt Professionnel sur les Revenus - IPR) and Social Security Contributions (Institut National de Sécurité Sociale - INSS).

Mandatory Deductions

• Income Tax (Impôt Professionnel sur les Revenus - IPR): This tax is withheld at source, based on a progressive tax rate structure.

• Social Security Contributions (Institut National de Sécurité Sociale - INSS): Employees contribute a percentage of their gross salary to the INSS. These contributions cover pensions (old age, disability, survivors), occupational risks (work-related accidents or illnesses), and family allowances (maternity benefits, etc.).

Other Potential Deductions

• Mutuelle de la Fonction Publique (MFP): Civil servants are required to contribute to the MFP, which provides health insurance coverage.
• Union Dues: If applicable, union membership fees might be deducted from salaries.

Important Considerations

• Tax Code: The Burundi Tax Code is the primary resource for the latest information on tax rates and deductions.
• Tax Allowances: Employees may be eligible for certain tax allowances or deductions, which could reduce their overall income tax burden.

Staying Informed

Tax laws in Burundi are subject to change. Always consult the latest information from a tax advisor for the most accurate and up-to-date guidance regarding employee deductions.

The standard VAT rate in Burundi is 18%. This applies to most services provided within the country. However, certain essential services such as healthcare, education, and some financial services might be exempt from VAT. For the most updated list of exempt services, it's recommended to consult the Burundi Tax Code or the Office Burundais des Recettes (OBR) website.

VAT on Imported Services

Burundi may use a "reverse charge" mechanism for specific services received from outside its borders. In this circumstance, the recipient of the service in Burundi becomes responsible for calculating and paying VAT, even if the supplier is a foreign entity. It's important to assess if a particular imported service is taxable under Burundi's VAT regulations.

Important Considerations

The VAT treatment of certain services can have nuances. It's best to refer to Burundi's Tax Code or consult a tax advisor for clarification. The provision of services across borders may have more complex VAT implications regarding the place of supply.

Staying Compliant

The primary source of information on VAT regulations is the Burundi Tax Code. The OBR website offers additional resources on VAT. For complex situations, international transactions, or to ensure compliance, consult a tax advisor specializing in Burundi's tax system.

Burundi's Investment Code offers tax incentives for eligible investments across various sectors. These incentives may include corporate income tax exemptions or reductions for a specified period, exemptions from import duties and taxes on essential equipment and materials, and VAT exemptions in certain cases.

Sector-Specific Incentives

Incentives may exist to promote investment in the agricultural sector and agro-processing. Tax breaks or exemptions could be available to encourage investments in manufacturing industries. There might also be incentives to support the development of tourism infrastructure and activities. Tax benefits might be available for businesses focused on exports to boost foreign trade.

Regional Incentives

Businesses operating within designated Special Economic Zones (SEZs) may benefit from significant tax breaks, including exemptions from corporate income tax, VAT, and import duties.

Finding the Right Incentives

The Burundi Investment Promotion Authority (API) is a primary resource for information and assistance on available incentives for businesses. The Burundi Tax Code contains specific details on tax incentives. For personalized advice and identification of eligible incentives, it is recommended to consult a tax professional in Burundi.

Important Considerations

Incentives typically have strict eligibility requirements based on industry, investment size, location, or job creation goals. An application and approval process is usually required to qualify for and receive tax incentives. Tax laws and incentives in Burundi can be subject to change. Always obtain the latest information from the API, Burundi's Tax Code, or from a tax advisor.