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5.1. Tax Base for Resident Entities

Under the prevailing territorial system, taxable income is limited to income arising from or derived from a business undertaking in Mali. On the other hand, passive income is subject to tax on a worldwide basis, unless a specific exemption applies. Taxable income is accounting income as adjusted for tax. Expenses and other allowances incurred for the production of taxable income are generally deductible.

Dividends received qualify for a participation exemption regime whereby 95% of the amount received is excluded from the tax base (the remaining 5% is deemed to correspond to the expenses incurred with respect to the participation, and are therefore subject to tax). In order to qualify for the participation exemption, the parent company must be resident in Mali, must hold at least 20% in the capital of the subsidiary, and the shares must be held without interruption whether since their issue or for at least 2 years.

Capital gains realized on the occasion of a cessation or partial transfer of business benefit from a partial exemption from tax. The exempt portion amounts to 50% of the gain if the cessation or partial transfer occurs more than 2 but less than 5 years after the start of the business, and to 66.66% if after 5 years.