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6.4. Deduction of Cross-Border Payments and Non-Deductible Expenses

The following expense types are not deductible (or are subject to deductibility limitations) for Mali tax purposes:

  • All payments by way of interest, royalties or services of any type made to persons established in a low-tax or non-cooperative jurisdiction are not deductible unless the payer evidences that the payment is in remuneration of a genuine service and is not excessive. For these purposes, a person is deemed to be established in a low-tax jurisdiction if not taxable therein, or if taxable therein but a rate which is more than 10 percentage points lower than the rate that would have applied in Mali has the person been resident there. A jurisdiction is classified as a non-cooperative jurisdiction if it is not committed to the international standards on transparency and the exchange of tax information;
  • Head office overhead allocated to a branch or PE in Mali is deductible, but the deduction is capped at a maximum of 20% of the branch or PEs accounting profit before the deduction; and;
  • With effect from 1 January 2019, interest paid on direct or indirect loans granted by shareholders is deductible only when:
    • The share capital is fully paid up and the loan amount does not exceed the share capital; and
    • The interest rate does not exceed:
      • the "Libor" rate under an agreement signed with the Malian State plus 2 percentage points; or
      • the interest rate of the Central Bank for West African Countries plus 3 percentage points in all other cases;
  • With effect from 1 January 2019, the deduction of royalties, interest expense, and service fees paid to non-resident companies that are directly or indirectly participating in the management or share capital of the Malian taxpayer, is limited to 3.5% of the Malian taxpayer's annual revenue;
  • With effect from 1 January 2019, interest paid on loans granted by non-residents (other than banks and financial institutions) is deductible only to the extent the loan is justified and calculated according to a legal interest rate.