Côte d'Ivoire: Simplified VAT compliance mechanism for nonresident digital service providers

An explanatory note published on 9 October 2023 describes the value added tax (VAT) on digital services rules and announces the implementation of a new simplified VAT compliance mechanism for nonresident digital services providers to collect and remit 18% VAT on the sale of digital services to customers in Cote d’Ivoire.

The explanatory note provides that its enforcement will commence six months from the date of its publication.

• The regime applies to operators of digital platforms, regardless of their legal form, that are not established in Côte d'Ivoire.
  • A digital platform is defined as any website or application using software solutions to remotely connect service providers with customers, facilitate transactions between these parties, and, if applicable, allow for online payment of said transactions.
  • The regime also covers digital platforms owned by service sellers that do not play an intermediary role in concluding other transactions than their own.
  • Websites or platforms that both carry out non-revenue-generating activities and paid services fall within the scope of the regime. However, their obligations are limited to the revenues they derive from paid services. This includes social networks that allow, on one hand, some of their users to connect and freely exchange information and, on the other hand, offer other user categories the opportunity to broadcast their advertisements on the network for a fee.

• The VAT collection requirement applies to digital services, which include, but are not limited, to the following services:
  • Online advertising services
  • Online data services
  • Online markets, including online food and delivery, online housing rentals, and online vehicle rentals
  • Digital content services
  • Online gaming services
  • Cloud computing services
  • Social network platforms to the extent they offer paid services
  • Search engines to the extent they offer paid services

• The VAT collection requirement applies to both sales made to direct consumers (B2C) and to sales made to business customers (B2B).
  • B2C sales are defined as services provided to “non-commercial users.”
  • B2B sales are defined as services provided to commercial users or between digital platforms. 

• Nil

• In general, digital services are subject to VAT in Côte d’Ivoire if the user, beneficiary, or recipient of the service is located within Côte d’Ivoire at the time of service delivery.
  • The customer location may be established either based on the details chronicled by the platform on their individual profile or, in the absence of such details, through geolocation data or the IP address associated with the device employed during the transaction.
  • For commissions earned by intermediary platforms, such commissions are subject to Côte d’Ivoire VAT if either the operator of the digital platform, the vendor of the underlying goods or services, or the purchaser or user of the goods or services is situated in Côte d’Ivoire.

• For B2C sales, taxpayers may continue to issue receipts to customers according to their current business processes. These receipts, issued in accordance with current business practices, remain valid and recognized by the tax authority.
• For B2B sales, while retaining their current methods, nonresident companies must include the following details to enable VAT recovery for B2B customers:
  • Customer's name
    
  • Customer’s taxpayer identification number
  • Nature of the service
  • Date of the service
  • Relevant amounts
     

For more information, contact a KPMG tax professional:

Philippe Stephanny | philippestephanny@kpmg.com

Chinedu Nwachukwu | chinedunwachukwu@kpmg.com