Mauritania Personal Income Tax

Residents of Mauritania are taxed on worldwide income. Nonresidents are taxed on their Mauritanian-source income only.

Mauritanian and foreign individuals are considered to be resi­dents for tax purposes if they meet any of following criteria:

  • They maintain a home in Mauritania as owner or leaseholder.
  • They have their primary residence in Mauritania.
  • They perform a professional activity in Mauritania, unless such activity is accessory (not the principal source of income).

Foreign-source income is not taxable in Mauritania if the recipient can prove that such income has been taxed in the source country.

Income subject to tax. Resident individuals (natural persons) are subject to general income tax on their worldwide general income, including the following income:

  • Self-employment or business income derived from commercial, non-commercial or agricultural activities
  • Rental income
  • Investment income
  • Capital gains that are not taxable as self-employment or busi­ness income
  • Salaries and wages that have not been subject to the tax on salaries

Employment income. Employment income is taxed at progressive rates (see below). Gross employment income includes public and private wages, salaries, perquisites, bonuses, fringe benefits and supplement salaries (payments made in addition to salary, such as rental subsidies and overtime pay).

The following types of income are exempt from tax:

  • Compensation and allowances relating to governmental or local representative duties.
  • A fixed amount of MRO60,000.
  • Up to MRO10,000 per month for all compensation and allow­ances except those relating to housing, transportation, liability and office (allowances relating to liability or office are allow­ances paid to employees with administrative or financial respon­sibilities, such as those who are on call or must remain late at the office).
  • Family or state allowances.
  • Legal payments for war disability.
  • Allowances for professional accidents (allowances for accidents caused by working tools or the handling of products in the work place).
  • Legal retirement benefits.
  • Fringe benefits not exceeding 20% of remuneration. However, only 40% of fringe benefits exceeding the exempt amount is included in taxable income.

The following are the progressive tax rates for employment income.

Employment income

Exceeding      Not exceeding                                            Rate

MRO                    MRO                                                           %

0                          90,000                                                         15

90,000              210,000                                                           25

210,000                 —                                                               40

A nonresident individual is taxable on income derived from ser­vices performed in Mauritania.

Employers withhold tax from salaries monthly. Salaries that are subject to withholding tax are not included in the tax base for general income tax purposes.

Self-employment and business income. Self-employment activi­ties are divided into commercial and industrial activities, non­commercial activities, and taxable activities that are not subject to a special tax. Income from each category is subject to propor­tional tax and general income tax (see Rates). The taxation of these types of income is summarized below.

Individuals are taxed on commercial and industrial income if they derive profits from activities with respect to industry, skilled trade, commerce, agriculture, fishing and forestry. If agricultural products are sold, agricultural production is considered a com­mercial activity. If agricultural production is used as food for the farmer only, it is not taxed. Taxable income equals the net profit derived from all such activities carried on by the taxpayer, includ­ing capital gains on transfer of business assets. Taxable income is computed on an accrual basis and taxed at a rate of 25%.

Individuals are taxed at a rate of 30% on professional income from non-commercial activities and from other occupations and business activities not subject to a special tax. Taxable profes­sional income equals the difference between income received, including capital gains on transfer of assets, and expenses in­curred with respect to the performance of the relevant activities. Taxable professional income is computed on a cash basis.

Investment income. Investment income, which includes divi­dends, directors’ fees and interest on bonds, debentures and bank deposits is subject to proportional tax at a rate of 10%. However, interest on banking deposits up to MRO1 million paid to Mauri­tanians performing activities abroad are exempt from tax.

Rental income. Rental income includes rentals of houses, office buildings, factories and real estate without buildings. Rental in­come is subjected to proportional tax at a rate of 18%.

Taxation of employer-provided stock options. No specific rules apply to the taxation of employer-provided stock options.

Capital gains. Capital gains realized in the performance of profes­sional, commercial and agricultural activities are taxed as ordi­nary income, with certain relief available.

Capital gains realized on the transfer of commercial business assets are tax-free if the proceeds are reinvested during the fol­lowing three years in the business assets of an enterprise located in Mauritania that is owned by the taxpayer.

Capital gains on the transfer of shares and real property that were not realized in the performance of self-employment activities are not subject to tax.

Deductions

General. Expenses are deductible for general income tax purposes if they meet the following conditions:

  • They are excluded in the calculation of the categories of income described above.
  • They are effectively incurred during the tax year.
  • They are supported by relevant documents.

Personal deductions. Under the tax law, the following personal expenses may be deducted:

  • Interest paid on loans to acquire or build the taxpayer’s princi­pal residence in Mauritania
  • Pensions and allowances that were fixed by court decision
  • Proportional taxes paid on income
  • Voluntary premiums for retirement pensions, up to 6% of net professional income (for this purpose, net professional income equals general income minus proportional taxes paid)
  • Life insurance premiums, up to 6% of net professional income
  • Pensions paid to the taxpayer’s parents and other close relatives, up to a maximum of MRO48,000 (approximately USD200)
  • Zakat (individual’s wealth that is distributed to the poor as a prescription of Islam), up to 2.5% of income
  • Patronage and sponsorship expenses, up to 1% of income

Business deductions. For the self-employment and business income, the following expenses are deductible:

  • General expenses incurred for business purposes, which include personnel and social security contribution expenses, rental and leasing expenses, finance charges and certain professional taxes, including business tax, license fees and tax on wages
  • Depreciation expenses computed using the rates established by the tax administration

Rates. In Mauritania, the following two levels of income taxation exist:

  • Proportional tax on each particular type of income (employ­ment income, self-employment and business income, invest­ment income and rental income).
  • Annual general income tax, which is a tax on total or global income, including the specific types of income subject to pro­portional tax. If an individual has several sources of income, he or she is taxed annually on global income, and he or she may claim deductions for taxes that have been paid on the specific types of income.

The rates of the proportional taxes are described in Income sub­ject to tax above. The calculation of the general tax is summa­rized below.

General income tax is levied at rates ranging from 5% to 33%. Family-coefficient rules reduce the progressive general income tax rates for taxpayers. Under the family-coefficient system, the applicable progressive tax rates are determined by dividing tax­able income by the number of family allowances of the taxpayer.

The final progressive tax liability is calculated by multiplying the tax computed for one allowance by the number of allowances claimed. The number of family allowances depends on the tax­payer’s status, as shown in the following table.

Number of

Taxpayer’s status                                                     allowances

Single, divorced or widowed without children                   1

Married without children                                                    2

Single or divorced with one child                                       2

Married or widowed with one child                                   2.5

Single or divorced with two children                                 2.5

Married or widowed with two children                              3

Single or divorced with three children                                3

Married or widowed with three children                            3.5

Single or divorced with four children                                 3.5

Half of an allowance is added for each additional dependent child. A disabled child is counted as a full allowance. For taxpay­ers with more than one wife, each wife counts for a full allow­ance. However, the total number of allowances that may be taken into account cannot be greater than five allowances.

The following table presents the progressive rates of general income tax.

Taxable income per allowance

Exceeding       Not exceeding                                     Rate

MRO                    MRO                                                      %

250,000         750,000                                                       5

750,000          1,500,000                                                  15

1,500,000       2,500,000                                                    25

2,500,000                 —                                                     33

Relief for losses. Losses may not be deducted from income from other categories, but may be carried forward for three years to offset income in the same category.

Inheritance and gift taxes

The Mauritanian tax law does not contain an inheritance tax. However, donations and inter vivos gifts are subject to registra­tion fees. The rates of these fees vary according to the type of assets transferred. For example, donations and inter vivos gifts of real estate and goods are subject to a 2% registration fee.

Social security

Social security contributions are withheld monthly by employers. They are computed on the basis of gross remuneration paid up to MRO70,000. The rates of social security contributions are 15% for employers and 1% for employees.

Social security benefits relate to sickness, maternity, retirement, disability, or invalidity. The amount of benefits depends on the total amount of contributions made on behalf of the employee.

Tax filing and payment procedures

Employers must withhold individual income tax from wages and pay the withholding tax to the tax authorities by the 15th day of the following month.

Taxpayers must file a general income tax return by 1 March. However, for individuals performing commercial and non-commercial activities, the deadline is 1 April.

Individuals performing commercial, agricultural or professional activities must pay the tax due by 30 April.

Double tax relief and tax treaties

Foreign taxes paid may be deducted as an expense from taxable income.

Mauritania has entered into double tax treaties with France, Senegal and states of the Arab Maghreb Union (Algeria, Libya, Morocco and Tunisia).

The treaties generally provide the following relief:

  • Commercial profits are taxable in the treaty country where a for­eign firm performs its activities through a permanent establishment.
  • Interest is taxable in the state of residence of the beneficiary, but the state of source may withhold tax at source if provided by its domestic law.
  • Employment income is taxed in the treaty country where the activity is performed, except in the case of a short assignment.

The treaties with France and Senegal provide that royalties and remuneration paid to a nonresident for services rendered in Mauritania are taxable in the state of residence of the beneficiary, but the state of source may withhold tax at source if provided by its domestic law.