Taxes in Djibouti

Djibouti applies a territorial tax system: income and business profits generated in Djibouti are generally within the national system, regardless of whether the taxpayer is a company or an individual. The annual tax year follows the civil year. National rules apply throughout the country; no separate regional or municipal tax divergence was evidenced in the reviewed sources. The Code Général des Impôts (CGI) contains the main tax rules. The Direction Générale des Impôts (DGI) determines the tax base, registers taxpayers, assesses liabilities, receives declarations, conducts audits, collects taxes and handles tax disputes. The Direction des Grandes Entreprises (DGE) deals with large taxpayers, while the Direction PME et Particuliers handles small and medium-sized businesses and individuals. The Direction Générale des Douanes et Droits Indirects (DGDDI) assesses and collects customs duties and import TVA. The Trésor Public, through the Trésorier Payeur National, receives tax payments. A business or individual starting an activity must apply for a Numéro d'Identification Fiscale (NIF) within 12 days after the activity begins. The NIF is required for tax declarations and payments, imports and exports, and public procurement. A person receives one NIF. Changes of activity, cessation, transfer or a secondary establishment must also be reported within 12 days. The NIF does not itself create a tax exemption, and no exemption is available without one. The reviewed official sources did not evidence a general online filing system. Employment income for work performed in Djibouti, as well as pensions and annuities, is subject to Impôt sur les Traitements et Salaires (ITS). Employers normally withhold it from salary and pay it by the 15th of the following month. The monthly progressive bands are 2% below FDJ 30,000, 15% from FDJ 30,000 to 50,000, 18% from FDJ 50,000 to 150,000, 20% from FDJ 150,000 to 600,000 and 30% above FDJ 600,000. A fraction below FDJ 5,000 is ignored. Employment lasting less than one month is taxed at a flat 15%. Mandatory pension and CNSS deductions are deductible. If monthly ITS does not exceed FDJ 50,000, payment can be made quarterly by the 15th day after the quarter. Taxpayers subject to an annual return generally file by 31 March. Two advances equal to 30% of the last assessed tax are due by 15 November and 15 March, with the balance due by 30 June. A foreign or multiple employer may leave the beneficiary with a direct obligation to settle the remaining amount. A net gain from an immovable-property sale is generally taxed at 5%. A principal residence is generally exempt when it was the habitual residence and was held or completed for at least five years, subject to statutory exceptions. The sale deed and declaration are filed within one month. Remuneration paid to a non-resident for services provided or used in Djibouti, royalties or intellectual property, head-office fees, studies, technical assistance or prospecting is generally subject to 10% withholding on the gross amount excluding TVA. The sources also identify exemptions for certain Djibouti-company dividends under the older non-resident rule, training costs and qualifying free-zone or investment-code remuneration. Since 2024, dividends of at least FDJ 10,000,000 are taxed at 5%; distributions below that amount are exempt under the stated rule. Undistributed, reinvested or reserved profits are not taxed as distributions. The rule covers resident and non-resident shareholders. The Impôt sur les Bénéfices Professionnels (IBP) taxes taxable net profit at 25% for legal and natural persons and public or private entities carrying on profitable activities. The system is territorial. A business loss may be carried forward for up to three following years. The Impôt Minimum Forfaitaire (IMF) is 1% of prior-year turnover excluding TVA, with a minimum of FDJ 120,000. It applies when it exceeds the IBP or when the business reports a loss. Investment, free-zone, externally funded and IBP-exempt entities can still be liable for IMF. Businesses with annual turnover below FDJ 20,000,000 for goods, on-site sales, hospitality and construction supplying materials, or below FDJ 10,000,000 for services, liberal professions and hospitality without on-site sales, can fall under the forfait regime. Turnover above the applicable threshold leads to the real-profit regime. A business below the threshold can opt for the real-profit regime before 1 February; the option applies for the current and following year and renews tacitly for two years. Choosing TVA also triggers the real-profit regime. An IBP declaration is due before 5 March. Real-regime businesses keep sales, purchases, miscellaneous-operations, journal, ledger and inventory records, together with original vouchers. Records may be kept in French or with a certified French translation available in Djibouti and must be retained for 10 years. A qualifying Centre de Gestion Agréé member with turnover below FDJ 80,000,000 may receive a 20% abatement when it maintains compliant books and filings. IBP advances normally consist of three payments equal to 25% of the previously assessed tax, due during the first 15 days of April, August and November. No advance is due when the reference tax does not exceed FDJ 120,000. New-company advance rules depend on the patente and capital. A domestic payer withholds tax on covered services at 10% when the provider has no NIF, 2.5% for construction and public-works services, and 5% for other covered services. The payer remits it within 15 days of the following month. Service withholding is creditable against IBP. Rent withholding is 8%. The patente is an activity-based fixed or proportional contribution, with special advance-payment rules for businesses without fixed premises and certain importers. The 2025 Startup Act removed the previous reference to a class-6 patente for startups. TVA, or value-added tax, applies to independent economic operations, including imports, goods and services. It generally applies when annual turnover reaches FDJ 80,000,000. If turnover exceeds FDJ 120,000,000 during the year, liability begins from the month in which that threshold is exceeded. The normal rate is 7%. Exports, qualifying export or transit services, specified international transport and certain foreign-funded public contracts can have a 0% rate. DGDDI assesses and collects import TVA. Entry into a free zone suspends TVA, but release into the domestic market makes the transaction taxable. Input TVA can be deducted for taxable business use, but deductions are blocked for lodging, hospitality, meals, receptions, entertainment, passenger transport, certain vehicles, gifts or transfers below value, petroleum except for resale, and electricity. A TVA declaration for the previous month is due by the 20th of each month, including when the return is nil. Payment is made with the filing or following an Avis de Mise en Recouvrement (AMR), an enforceable tax assessment. A TVA invoice must show the supplier and customer NIF, date and serial number, description and quantity, amount excluding tax, rate, TVA and total including tax. Accounting records and vouchers are retained for 10 years. A credit refund request may be filed quarterly in April, July, October or January with the previous quarter's declaration, a bank account identity document and purchase invoices. The taxpayer must be current with filings. The DGI decision target is 20 days, and a solvable guarantee may be required. The Taxe sur les Prestations de Services (TPS) is 7% on hotel services not subject to TVA, with monthly declaration and payment by the 15th of the following month. From 1 January 2026, an outgoing international-transfer tax applies at 0.2% of the transferred amount. Banks, mobile-phone companies and money-transfer agents collect and remit it. Transfers below FDJ 53,316.3, stated as USD 300, are exempt. For customer transfers, the cap is FDJ 17,721, stated as USD 100, per operation; account-to-account transfers within the same institution have no cap. Collectors declare and remit the tax by the 10th of the following month. The DGI may request information and explanations, generally allowing 20 days for a response. It may inspect professional premises, invoices, books and records. Private enterprises generally cannot invoke professional secrecy against the DGI during ordinary tax control. Late or missing filing attracts interest of 0.5% per month. Late payment adds 5% plus 0.5% per month. TVA late or missing filing has a minimum penalty of FDJ 50,000. A false TVA invoice or deduction can attract a 100% penalty; a missing TVA invoice can attract 50% of the compromised tax, rising to 100% for recurrence. An AMR becomes an enforceable title, and payment is due within 15 days. Forced recovery, including seizure, can follow. Tax claims and TVA refunds follow the tax-contentious procedure. Principal TVA is not remissible by gracious relief, although penalties may be treated differently. Cross-border cases require attention to the source and use of income, the place of activity, residence or domicile, imports and exports, and non-resident withholding. Djibouti's broad treaty network was not evidenced as effective in the reviewed material. A Kuwait exchange-of-information treaty signed in 2009 has disputed force, and the exchange network was assessed as ineffective. The 2024 CGI permits DGI information exchange only with states having a reciprocal tax-assistance convention, subject to commercial, industrial and professional secrecy and public-order limits. A generally available treaty-relief or foreign-tax-credit pathway was not evidenced. Investment and free-zone benefits do not remove every obligation, particularly IMF and TVA rules. Businesses and individuals should therefore verify the applicable liability, NIF status, records, filing date and payment channel with the DGI or DGDDI for the specific transaction.