Employers have several tax responsibilities that they must fulfill. One of these is the withholding of IPR (Impôt sur le Revenu des Personnes Physiques) from employee salaries for submission to tax authorities. The rates for this tax are progressive and employers should refer to the latest tax brackets from the Office Togolais des Recettes (OTR). The payment deadline for this tax is monthly.

Social Security Contributions

Employers also have the responsibility of paying social security contributions on behalf of their employees. The rates for these contributions are as follows:

• Employer contribution: 17.5% of the employee's monthly gross salary
• Employee contribution: 4% of the employee's monthly gross salary (employers withhold this)

These contributions are typically paid along with income tax on a monthly basis.

Other Potential Taxes

There are other potential taxes that employers may be responsible for. These include:

• Payroll Tax: This is 3% of gross salaries.
• Property Tax: This may apply if the employer owns real estate property.
• Apprenticeship Tax and Professional Training Tax: These are other potential taxes that employers may be responsible for.

In Togo, all employees earning income are subject to Income tax on employment income (Impôt sur le Revenu des Personnes Physiques, IPR). This is a progressive tax system with varying rates based on income level. The tax is calculated on the employee's gross salary after applicable deductions and allowances.

Income Tax (IPR)

• Type: Income tax on employment income (Impôt sur le Revenu des Personnes Physiques)
• Eligibility: All employees in Togo earning income
• Rates: Progressive tax system with varying rates based on income level
• Calculation: Tax is calculated on the employee's gross salary after applicable deductions and allowances

In addition to income tax, all employees in Togo are obligated to make mandatory contributions to the Caisse Nationale de Sécurité Sociale (CNSS). This is calculated based on a percentage of the employee's gross salary.

Social Security Contributions

• Type: Mandatory contributions to the Caisse Nationale de Sécurité Sociale (CNSS)
• Eligibility: All employees in Togo
• Rate: 4% of the employee's gross salary
• Calculation: Based on a percentage of the employee's gross salary

In Togo, the standard Value Added Tax (VAT) rate is 18%. This rate is applicable to most services unless they are specifically exempted.

VAT Exemptions

Certain services in Togo are exempt from VAT. These include:

• Financial Services: This category includes services such as banking, insurance, and some financial transactions.
• Medical and Healthcare Services
• Educational Services
• Other Exemptions: There are a limited range of other services that might be exempt. For an updated list, it's recommended to consult the Office Togolais des Recettes (OTR).

VAT Registration and Filing

Businesses with a taxable turnover exceeding the threshold specified by the OTR must register for VAT. VAT returns are generally filed on a monthly basis. Similarly, VAT payments are typically due every month.

Tax incentives are a key tool used by governments to stimulate economic growth and development. They come in various forms, including corporate income tax exemptions or reductions, import duty exemptions on equipment, machinery, and raw materials. To qualify for these incentives, businesses must meet certain criteria such as minimum investment thresholds, which vary depending on the sector and location, and contribute to employment creation and economic development. The application process involves submitting an application to the Agence de Promotion des Investissements et de la Zone Franche (API-ZF) outlining the investment project and demonstrating adherence to eligibility criteria.

Export Processing Zones (EPZs)

Export Processing Zones (EPZs) offer significant tax and customs incentives within designated zones. These include a 10-year corporate income tax exemption, followed by a fixed rate of 15%, and exemptions on import duties, VAT, and other taxes. To qualify, businesses must be export-oriented manufacturing and agro-processing businesses and meet minimum investment requirements. The application process for EPZs involves contacting API-ZF for EPZ-specific application procedures.

Other Potential Incentives

There are other potential incentives available to businesses. These include a tax credit for job creation, which may be available for businesses creating new jobs, and accelerated depreciation for investments in machinery and equipment.