1. TAXABLE TRANSACTIONS
(ART.172 OF THE CGI) Deliveries of goods and services carried out for consideration by a taxable person acting as such are subject to VAT. Example: sale, exchange of tangible movable property, industrial gas, heat, cold, custom work, repairs, transport, brokerage, study work, real estate work, etc.

2. PERSONS LIABLE OR SUBJECT BY FULL RIGHTS
(ART.177 OF THE CGI) Are subject to VAT, natural or legal persons who independently carry out, on a habitual or occasional basis, one or more operations subject to the tax, when they achieve a turnover of more than sixty million (60,000,000 ) CFA francs. Legal or natural persons exercising a liberal profession as well as holders of positions and offices are automatically subject to the tax on added value, regardless of the amount of turnover achieved. The same applies to natural or legal persons practicing the profession. air and sea transport brokers, air freight agent and maritime, approved port brokers, ship consignees and maritime expertise professions.

3. NON-TAXABLE TRANSACTIONS AND EXEMPTIONS
(ART.180 & 181 OF THE CGI) Non-taxable transactions are those which normally fall within the scope of VAT, but which escape taxation by virtue of the express provisions of the law. The exemptions are strictly legal (article 180 of the CGI). Example :
• Businesses or operations subject to another tax (TCA, TAF, Registration duties etc.)
• Teaching activities carried out by university, school, technical or professional educational establishments;
• As-is deliveries of agricultural, livestock and fishing products made by artisanal farmers, breeders and fishermen;
• Operations carried out by school and business canteens;
• Services relating to medical and paramedical professions and ancillary operations;
• Products exempt in the VAT annex of the CGI,
• etc...

4.TERRITORIALITY
(ART.182 OF THE CGI) VAT, which is a tax on consumption, must be collected in the country where the goods and services are consumed or used. The rules of territoriality therefore aim, based on a specific taxable transaction, to specify the State which will ultimately be the beneficiary of the tax. For Togo, VAT is only due for operations carried out on the national territory where the legislation relating to VAT applies, namely continental Togo, territorial waters, the continental shelf, the economic zone subject to specificities laid down by law.

5. TAX BASIS
(ART.182 OF THE CGI) The tax base is constituted for deliveries of goods and services by all sums, values, goods or services received or to be received by the supplier or service provider in consideration for the delivery or service. The taxable base corresponds to the consideration (generally the price) expressed excluding taxes. The product of this base by a rate gives the amount of gross VAT. The price excluding tax must normally appear in accounting and on invoices issued by companies to their customers. However, taxpayers who ordinarily generate revenues including all taxes (TTC) can enter them in tax-inclusive accounting and calculate the turnover excluding VAT using a conversion coefficient of the formula below: Price excluding tax = price including tax X 100/118 Included in the tax base:
• Taxes, duties, levies and levies of all kinds including customs duties, excise duties or specific taxes, with the exception of VAT itself;
• Costs incidental to deliveries of goods or services such as commissions, interest, packaging, transport and insurance costs requested from customers.

6. RATE
(ART.195 OF THE CGI) The current rate is a single rate of 18% applicable to all activities and all products.

7. THE PRINCIPLE OF THE RIGHT TO DEDUCTION
(ART.196 OF THE CGI) Unique and global, VAT is only charged once on the final value of the product. The principle of the right to deduct is enshrined in these terms: “The VAT which charges the elements of the price of a taxable transaction is deductible from the VAT applied to this transaction”. Only taxpayers are authorized to deduct the tax charged on the goods and services they have acquired from the moment they carry out transactions giving right to deduction, namely:
• operations subject to VAT;
• certain exempt operations, essentially those relating to foreign trade (exports) assimilated to operations taxed at zero rate.

8. EXCLUSION OF THE RIGHT TO DEDUCTION
(ART.197 OF THE CGI) Even if they contribute to the carrying out of transactions giving right to deduction, the following goods and services are excluded:
• passenger cars as well as their parts, spare parts or accessories, excluding utility vehicles and passenger cars purchased for the purpose of carrying out a leasing or leasing operation with regard to the lessor ;
• expenses for accommodation, restaurants, receptions and shows;
• furniture and housing equipment;
• etc...

9. OBLIGATIONS OF PAYERS
(ART.60 OF THE LPF) Any taxable person, even occasional taxable person, must subscribe to a declaration of existence provided by the Tax Administration within 15 days following the start of its operations or the opening of the establishment. He must also subscribe to the tax service no later than the 15th of each month and, for the previous month, a declaration conforming to the prescribed model indicating the amounts of his taxable and non-taxable transactions, the gross amount of the tax paid, the details of the deductions made, the amount of tax payable or, as the case may be, the tax credit. The declaration must be filed within the same period when the taxable person has not carried out any taxable transaction. Likewise, every person subject to VAT must keep a register on numbered pages which are entered, day by day, without blanks or erasures, the amount of each of its taxable transactions and those which are not.

10. INVOICES
(ART.64 OF THE LPF) Any VAT payer who delivers goods or provides services to another taxpayer or who requests advance payments giving rise to the tax being payable must issue him with an invoice or a document in lieu thereof, showing:
• The invoice number in an uninterrupted series;
• A sticker according to a model determined by the Tax Administration;
• The company’s tax identification number;
• The date of invoicing;
• The name or company name, geographical address and registration number in the commercial register of the supplier;
• The nature and purpose of the transaction;
• The price excluding tax;
• The rate and amount of the tax due;
• Where applicable, the mention “exempt”;
• The total amount owed by the customer. Taxpayers must use standardized invoices whose publishing and management conditions are determined by Order No. 092/MEF/TRA/CG/CI of the Minister of Economy and Finance dated May 11, 2018. These invoices include, in addition to the information listed above, a sticker according to a model determined by the tax administration. In accordance with Communiqué No. 004/2020/TRA/CG/CI of the CG of the TRA dated January 29, 2020, VAT payers are authorized to issue their own invoices in strict compliance with the information cited above. The standardized invoice is also applicable to companies whose turnover is below the VAT threshold (60,000,000 F CFA). In this case, the invoice must include the words “DO NOT CHARGE VAT”.

11. PRACTICAL CASE
(ART.195 OF THE CGI) Suppose that company A sells its production (without using any inputs) at a price of 100,000 CFA francs (excluding tax) to company B, which in turn resells its production to 175,000 F CFA (excluding tax) to the final consumer. The single VAT rate applied to the operation is 18%. Company A then invoices 118,000 CFA francs including tax to company B and pays the State 18,000 CFA francs corresponding to the amount of VAT collected; it being understood that in this particular case, there is no deductible VAT. Company B then charges the final consumer 206,500 F CFA and pays 13,500 F CFA in VAT to the State, i.e. an output tax of 31,500 F CFA less a credit of 18,000 F CFA corresponding to the input tax paid to its supplier A. The State therefore collects a total of 31,500 CFA francs in revenue.
Seller A
Sales price excluding tax = 100,000 FCFA
VAT (18%) = 18,000 FCFA
Sale including tax = 118,000 FCFA
VAT collected = 18,000 FCFA
Deductible VAT = 0 FCFA Net VAT to pay = 18,000 FCFA
Seller B
Cost price excluding tax = 100,000 FCFA Margin (75%) = 75,000 FCFA
Sales price excluding tax = 175,000 FCFA
VAT (18%) = 31,500 FCFA
Sale including tax = 206,500 FCFA
VAT collected = 31,500 FCFA
Deductible VAT = 18,000 FCFA Net VAT to pay = 13,500 FCFA