Capital Gains Tax in Djibouti

Djibouti's capital gains tax (CGT) framework covers gains from the disposal of various asset classes. The tax treatment differs between individuals and corporations, with specific rules for real estate, securities, and business assets.

Scope of Capital Gains Tax

Capital gains in Djibouti are generally taxed as ordinary income for both individuals and corporations. There is no separate capital gains tax regime; gains are integrated into the regular income tax framework.

Capital Gains for Individuals

Real Estate Gains

Gains from the sale of real estate are subject to a 20% withholding tax for residents who do not declare the gain in their annual tax return. If declared, the gain is taxed at progressive personal income tax rates. A 5% surcharge applies to non-residents on real estate gains.

Exemptions apply for the sale of a primary residence if the proceeds are reinvested in another primary residence within 24 months.

Securities Gains

Gains from the sale of listed securities are exempt from capital gains tax for individual investors, provided the seller holds less than 25% of the company. Gains from substantial shareholdings (≥25%) are taxed as business income.

Capital Gains for Corporations

Corporate capital gains are treated as ordinary business income and taxed at the standard corporate income tax rate of 25%. This includes gains from the sale of fixed assets, investments, and intellectual property.

Exemptions and Reliefs

Calculation of Gains

The capital gain is calculated as the difference between the sale price and the acquisition cost, adjusted for:

Filing and Payment

Individuals must declare capital gains in their annual tax return (Déclaration d'Impôt sur le Revenu). Payment of tax due must be made by the filing deadline of April 30 of the following year. For real estate transactions, a notary typically withholds the tax at source.

Corporations report capital gains as part of their annual corporate tax return, with payment due by April 30.

Double Taxation Treaties

Djibouti has limited double taxation agreements. Where applicable, treaty provisions may reduce or exempt capital gains taxation for non-residents. Foreign tax credits are available for Djibouti residents on gains taxed abroad.

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