Employers have several tax responsibilities that they must fulfill. These include contributions to social security, medical insurance, housing tax, flat-rate contributions, apprenticeship tax, and professional training tax.

Social Security Contributions (INPS)

Employers contribute 4% of an employee's gross salary to the National Social Insurance Institute (INPS). This contribution covers various benefits like old-age pensions, disability, and survivor benefits.

Medical Insurance Contribution (AMO)

Employers contribute 4.48% of an employee's gross salary to the National Health Insurance Fund (AMO). AMO covers health-related expenses for employees and their families.

Housing Tax (Taxe-logement TL)

Employers pay a housing tax at the rate of 3.5% of the gross amount of wages.

Contribution Forfaitaire

Employers must pay a flat-rate contribution of 3.5% on the total gross salaries they pay. This covers occupational accidents.

Apprenticeship Tax (Taxe d'apprentissage)

Employers must pay a 2% tax on gross wages for employee training and development.

Professional Training Tax (Taxe de la Formation Professionnelle)

The rate can vary, but it's typically around 2% of gross wages. This tax funds vocational training and professional development programs.

In Mali, a progressive tax system is employed where higher income levels face higher tax rates. The income tax (ITS – Impôt sur les Traitements et Salaires) is withheld directly from the employee's salary. Certain allowances, such as reimbursements for work-related expenses, are not covered by ITS.

Social Security Contributions (INPS)

Employees contribute a percentage of their pre-tax salary towards the National Social Security Institute (INPS - Institut National de Prévoyance Sociale). Contributions are also made for mandatory health insurance (Assurance Maladie Obligatoire).

Other Mandatory Deductions

Employers must deduct a flat-rate contribution (Contribution Forfaitaire) of 3.5% based on the total gross salary paid to employees. Another flat-rate deduction, the housing tax, is also levied at 3.5% of the gross wages.

Understanding Fringe Benefits

Most fringe benefits are subject to ITS (Income Tax) as part of the employee's overall taxable income. However, fringe benefits that cannot be readily converted into cash may be exempt from taxation.

Additional Considerations for Payroll Management

Staying up-to-date with the latest tax rates and filing deadlines is crucial. Income tax and payroll regulations may have further nuances when employing foreign nationals in Mali.

In Mali, the standard VAT rate is currently 18%. Businesses with an annual turnover exceeding 50 million CFA francs are generally required to register for VAT. Most services supplied within Mali are subject to VAT, with a few specific exceptions.

Key VAT Considerations for Service Providers

VAT invoices must include specific information such as the supplier's and customer's tax identification numbers, the VAT rate applied, and the amount of VAT charged. Service providers are responsible for collecting VAT from their customers and remitting the collected VAT to the tax authorities on a regular basis, usually monthly or quarterly. Businesses can generally deduct the VAT paid on their business-related purchases (input VAT) from the VAT they collect on their sales (output VAT). This mechanism helps avoid double taxation.

Special VAT Regimes for Services

Certain services, such as financial and medical services, may be exempt from VAT. Exported services are typically zero-rated, meaning no VAT is charged, but the supplier may still be entitled to reclaim input VAT.

VAT and International Services

Services imported from outside Mali may be subject to VAT under a reverse charge mechanism, where the recipient of the service is responsible for accounting for the VAT. As mentioned earlier, services exported from Mali are generally zero-rated for VAT purposes.

Staying Compliant

Maintain accurate records of sales, purchases, and VAT calculations. File VAT returns on time and pay any VAT due promptly to avoid penalties. Consider seeking professional advice from a tax advisor to ensure compliance, especially in complex situations.

Mali's Investment Code is the primary source of tax incentives in the country, offering incentives to both domestic and foreign investors across various sectors.

Types of Tax Incentives

• Corporate Income Tax (CIT) Reductions/Exemptions: New investments in priority sectors or specific geographic zones may be eligible for reduced CIT rates or temporary exemptions.
• Import Duty Exemptions: Businesses can obtain exemptions from customs duties and import taxes on equipment, machinery, and raw materials critical to their investment projects.
• Local Sourcing Incentives: Companies that use a significant percentage of locally sourced raw materials can qualify for reduced CIT rates.
• Research & Development Incentives: Companies that spend a portion of their turnover on local R&D may be eligible for payroll tax reductions on Malian employees engaged in research.

Specific Sectoral Incentives

• Agriculture and Agribusiness: Incentives are available to promote investment in agriculture, livestock, and agro-processing.
• Mining: The mining sector may benefit from specific tax incentives depending on the type of investment.
• Industry and Manufacturing: Tax breaks exist to encourage industrial development and manufacturing activities.
• Free Zones: Companies operating within designated free zones or export processing zones can enjoy significant tax advantages for a specified period.

How to Apply for Incentives

• Investment Promotion Agency (API-Mali): The Investment Promotion Agency can provide guidance on eligibility and the application process.
• Negotiation: For larger, more strategic investments, companies may negotiate specific incentive packages on a case-by-case basis.