A practitioner's guide to transfer pricing in Chad: the indirect-profit-transfer rule in CGI article 41, the two-tier documentation regime above XAF 500 million, the 30 April filing date, and how the Direction Générale des Impôts audits, adjusts and penalises intra-group pricing.
A directorate-general of the Ministry of Finance (styled in 2025 texts as the Ministère des Finances, du Budget, de l'Économie, du Plan et de la Coopération Internationale). Transfer pricing sits with the Direction de la Législation, du Contentieux et des Relations Fiscales Internationales (DLCRFI), which issued the 2023 TP Instruction.
Instruction n°02/MFBCP/SE/SG/DGI/DLCRFI/2023, letterhead; dgi.tdBoth articles were replaced by articles 31 and 32 of Finance Law 2023 (Law n°016/PT/2022 of 30 December 2022) and were not amended by the 2024, 2025 or 2026 finance laws. Article 41 sits in the income tax part of the code but reaches companies through CGI article 134, and is restated inside CGI article 26 from 1 January 2026.
Finance Law 2023, arts 31–32; CGI arts 41, 134, 1000-XIV; CGI art. 26 (Finance Law 2026)Issued expressly to apply articles 31 and 32 of Finance Law 2023. It covers dependence (s. I.A), adjustment mechanics (s. I.C), the two documentation tiers (s. I.D), comparability and method selection (s. I.E), the extended limitation period (s. I.F), APAs (s. II) and penalties (s. III). It is often miscited as n°012; the handwritten number on the scan is 02.
Instruction n°02/MFBCP/SE/SG/DGI/DLCRFI/2023, introduction and contents; PwC Worldwide Tax Summaries, Chad (circular ref 02/MFBCP/SE/SG/DGI/2023)CGI article 41 never uses 'pleine concurrence'. It uses the French indirect-transfer formula: profits shifted by inflating or deflating purchase or sale prices, or by any other means, are added back. The Instruction states that the price between associated companies must equal what independent enterprises would have applied in comparable conditions.
CGI art. 41 (nouveau) I–II; Instruction n°02/2023, introductionLegal dependence covers preponderant capital, an absolute majority of votes, decision-making functions, chains and sister-company structures. Dependence in fact turns on the capacity to impose economic conditions — imposed prices, reporting duties, royalties disproportionate to what is supplied. CGI article 41 paragraph 1) drops the dependence condition entirely for counterparties in privileged-regime or non-cooperative territories.
Instruction n°02/2023, s. I.A.1–I.A.3; CGI art. 41 (nouveau), para. 1)A privileged regime means non-taxable persons, or persons taxed on profits or income at a rate more than half below Chadian ordinary law. The definition was inserted into CGI article 26 with effect from 1 January 2026.
CGI art. 26 as amended by art. 7 of Finance Law 2026The OECD has published no Transfer Pricing Country Profile for Chad, and regional peers Cameroon and Côte d'Ivoire are likewise absent from the series. The OECD Guidelines are not incorporated into Chadian statute; they bind practice only because the Instruction requires the full documentation to follow them and reproduces the nine-step comparability process.
Instruction n°02/2023, s. I.D.2.b and I.E; OECD Inclusive Framework composition, 5 December 2025CUP is treated as suited to commonly traded goods and unsuited to elaborate products or intangibles; cost plus to limited-risk service providers and subcontractors; resale price where the distributor is not the principal entrepreneur; TNMM across tangibles, intangibles and services.
Instruction n°02/2023, s. I.E.2.2A taxpayer's chosen method is accepted if justified, consistent with the functions performed and risks assumed, and productive of arm's length remuneration. Profit split requires proof that the other methods are not relevant, and is reserved for highly integrated transactions, high-value intangibles and situations lacking reliable comparables.
Instruction n°02/2023, s. I.E.2.1 step a) and I.E.2.2The analysis must identify the economically significant activities, the assets used or provided and the risks assumed, focusing on what the parties actually do, so as to locate the entity holding the strategic assets, funding the principal functions and bearing the principal risks.
Instruction n°02/2023, s. I.E.1Reliability is assessed case by case against the five comparability factors, with adjustments for differences such as accounting standards. Commercial databases are recognised as a usual source but must be handled with care, having been compiled for other purposes.
Instruction n°02/2023, s. I.E.2.1 steps a) and e)The DGI follows OECD practice here, which spares taxpayers a full search each year but not an annual financial update. Documentation itself remains a yearly obligation.
Instruction n°02/2023, s. I.E.2.1 step a)Outside the range the taxpayer must justify the position, failing which the DGI selects the point to which the condition will be adjusted. The Instruction's worked example (first quartile 2.20, median 3.00, third quartile 3.55) should be preferred over its internally inconsistent reference to 'quartiles 2 and 3'.
Instruction n°02/2023, s. I.E.2.1 step i) and worked exampleBoth are owed by the same population and both are demanded at the time the annual Déclaration Statistique et Fiscale is filed. The statute says the light tier is attached to the DSF and is accompanied by the full documentation — so the full report is not a document produced later on request. CGI article 1006 requires returns within four months of year end, extended to 30 April for traders, industrialists and farmers on the real or simplified regimes. The Instruction confirmed 30 April 2023 for FY2022 documentation, with a discretionary extension of no more than two months from the legal DSF date.
CGI arts 1000-XIV (Finance Law 2023, art. 32) and 1006-I; Instruction n°02/2023, s. I.D and s. IVThe same threshold governs both tiers — there is no higher trigger for the full report. Two relational conditions are added: dependence on or control of foreign enterprises, and transactions with associated enterprises abroad. The DGI reads 'enterprises established in Chad' as including foreign companies with a Chadian permanent establishment, though its cross-reference to CGI article 142 is loose, since that article governs place of assessment rather than PE status.
CGI art. 1000-XIV; Instruction n°02/2023, s. I.D.1.a; Circulaire on Finance Law 2023, para. 34Circular n°043/MFBEPCI/DGI/DIMF/2025 of 30 April 2025 confirmed that no physical filing is authorised before an online filing has been made. Under CGI article 1000-X, failure to translate results in rejection of the accounts; practice is conducted in French.
DGI Circulaire n°043/2025; CGI arts 1000-X and 1000-XIIILight tier, group level: business and changes, legal and operational structure, the associated enterprises in the controlled transactions, functions and risks affecting the Chadian result, main intangibles, TP policy and organisation chart. Entity level: the Chadian business, nature and amount of intra-group flows and royalties, cost contribution arrangements, APAs and rulings, the method with its functional analysis, and the comparables. The Instruction says a template form is annexed, but no annex appears in the published scan — practitioners should request it from the DGI. The full tier comprises executive summary, introduction, methodological approach, group and Chadian entity presentation, industry analysis, description of the tested transactions, functional analysis, financial analysis, method selection, economic analysis, conclusion, and annexes comprising the organisation chart, financial results and the benchmark; it must be drafted in accordance with the OECD Guidelines.
CGI art. 1000-XIV, paras 1)–2); Instruction n°02/2023, s. I.D.1.b and I.D.2.bNeither CGI article 1000-XIV nor any finance law from 2022 to 2026 mentions a CbC report. Chad has not signed the CbC MCAA and is not a participating jurisdiction in the Convention on Mutual Administrative Assistance in Tax Matters.
CGI art. 1000-XIV; OECD CbC MCAA signatories, 29 July 2026; OECD MAAC status, 1 September 2026CGI article 1000-V requires the statement plus the allocation basis between countries of operation; without it the charges are simply non-deductible. From 2026 the 10% cap carves out plant erection assistance, audiovisual content remuneration and certain grouped IT and telecommunications reimbursements. This pairing is the most common entry point for a Chadian adjustment.
CGI arts 1000-V and 26-XXI–XXII (Finance Laws 2023 and 2026)CGI article 1000-XIV disallows sums booked on transactions with associated enterprises where documentation is absent or incomplete. Separately, CGI article 1056 imposes XAF 100,000 per item of declaration or document not supplied, and permits withdrawal of tax advantages by ministerial decision.
CGI art. 1000-XIV (Finance Law 2023, art. 32); CGI arts 1056 and 1001-IIBoth limbs are statutory. The 5% fine with its XAF 50,000,000 floor attaches to CGI article 1000-XIV. The late-filing scale is CGI article 1060 — XAF 10,000,000 for the first month of delay, 20,000,000 for the second, then 25,000,000 plus 5,000,000 per further month — text already in force at 31 December 2023 and re-enacted by article 24 of Finance Law 2024 (Law n°031/PT/2023 of 29 December 2023). The Instruction's rappel des sanctions restates them.
CGI arts 1000-XIV and 1060; Finance Law 2024, art. 24; Instruction n°02/2023, s. IIISums added back are treated as distributed profits under CGI article 66, whose paragraph II presumes the company's director in title to be the beneficiary of disallowed charges. Where the year is loss-making the rule applies to the last profitable non-time-barred year, and where every open year is nil or loss-making the charges are disallowed and treated as distributed — a rule in CGI article 26-XXIV since the 2016 Code, not a 2026 innovation.
Instruction n°02/2023, s. I.C; CGI arts 66-I–II and 26-XXIII–XXIVThe Instruction lists these as part of the transfer pricing sanctions regime for sums paid to beneficiaries in privileged-tax or non-cooperative countries and territories.
Instruction n°02/2023, s. IIIThe request must state, by activity or product, the country, entity and amounts at stake. The DGI must prove the dependence link and then the abnormal transfer; low margins, recurrent losses or below-sector profitability justify a request but do not reverse that burden, and the administration must itself show that sector peers earn more. Adjustments should rest on the precise elements of the transaction, comparison with similar Chadian enterprises being expressly subsidiary.
CGI art. 41, paras 2)–4) and art. 1000-XIV, paras 5)–7); Instruction n°02/2023, s. I.A.3.b and I.D.3The general period runs to the end of the third year following the year of the tax (LPF art. L.82-I). Where an exchange-of-information request is made within that period, omissions may be repaired until the end of the year following the reply and at latest the fifth year. Chad joined the Global Forum in 2016 but is not a MAAC party, so requests depend on bilateral or CEMAC arrangements.
LPF art. L.82-I; CGI art. 1000-XIV al. 8; Instruction n°02/2023, s. I.FCGI article 1000-XIV permits taxpayers to request an APA and permits the DGI to conclude agreements with treaty partners' competent authorities. No filing threshold, fee, term, renewal rule or roll-back has been published, and no implementing arrêté exists. The Instruction itself warns that a unilateral APA does not eliminate double taxation risk.
CGI art. 1000-XIV, al. 9 et seq.; Instruction n°02/2023, s. IIChad has published no MAP guidance and, not being an Inclusive Framework member, has had no BEPS Action 14 peer review. PwC reports treaty partners as Cameroon, the Central African Republic, Equatorial Guinea, Gabon and the Republic of Congo, under the CEMAC framework.
PwC Worldwide Tax Summaries, Chad; OECD Inclusive Framework composition, 5 December 2025The claim runs from receipt of the avis de mise en recouvrement or from payment where tax was paid spontaneously — a sharp shortening of the former period, which ran to the end of the second year. Only lawyers on the roll or CEMAC-approved tax counsel may act for a third party.
LPF arts L.144 (Finance Law 2026, art. 50), L.148–L.152Suspension must be expressly requested with the amount and basis of relief specified. The 2024 Finance Law abolished the contentious bank guarantee under LPF article L.102. Judicial recourse lies to the tribunal administratif, then the Administrative Chamber of the Court of Appeal.
LPF arts L.102, L.169–L.170; DGI, Innovations fiscales LF 2024No Chadian transfer pricing judgment appears in the DGI's doctrine and jurisprudence pages or in open case databases. This reflects the absence of systematic law reporting rather than an absence of disputes, and it puts the weight of any defence on the audit record itself.
DGI published doctrine and open case-law sourcesNo income inclusion rule, undertaxed profits rule, domestic minimum top-up tax or 15% effective-rate mechanism appears in the 2023 to 2026 finance laws, and the GloBE rules are not referenced. Chad is not a covered jurisdiction for the Amount B political commitment and has no simplified distribution return.
Finance Laws 2023–2026; OECD Amount B covered jurisdiction statement (2024); OECD Inclusive Framework compositionArticle 51 allows the DGI to examine by electronic means the data, documents, entries, processing and information systems a taxpayer uses, with access to information systems and databases and a mandatory accounting-entries file, subject to prior notice, the adversarial principle and the limitation period. It is not a rule that audit programming, notices, questionnaires or closing operations run exclusively through e-Tax. Finance Law 2026 also widened the documents produceable on request to invoices, contracts, purchase orders and delivery notes, made accounts probative only where certified by a CEMAC-accredited chartered accountant, and allows a second general accounts audit of an already-audited year where a new fact emerges from cross-checks or a tax-fraud complaint.
Finance Law 2026, arts 48, 49 and 51 (LPF arts L.2, L.50); Circulaire n°001/MFBEPCI/2026, paras 108–120Law n°008/AN/SENAT/2025 of 26 December 2025 conditions the tax identification number on disclosure of shareholders and beneficial owners (CGI art. 147), transposes into the CGI the special economic zones regime already established by Ordonnance n°002/PCMT/2022 of 28 July 2022, and extends taxation of indirect transfers of shares in Chadian companies. New CGI articles 77, 82, 84, 90, 118 and 119 cut the rate on certain revenus de capitaux mobiliers from 18% to 15%, expressly excluding interest and dividends paid to persons with no professional establishment in Chad or CEMAC — a rate reduction, not a new withholding, since interest paid abroad was already taxed under CGI article 84 (reduced from 25% to 18% by Finance Law 2024) and dividends already bore IRVM. The 5% / 5% / 10% figures often quoted are the CEMAC tax convention's allocation ceilings, not a 2026 creation.
Finance Law 2026, arts 2, 9 and 20; CGI arts 77, 84 and 147; Circulaire n°001/MFBEPCI/2026, paras 11 and 86The 2024 Finance Law cut the corporate rate from 35% to 30% (25% for local product processing and energy, including green hydrogen) and reduced withholding on foreign study, head office, technical, financial and accounting assistance fees from 25% to 18%. The consolidated code still carries a 25% paragraph alongside the 18% one, so confirm the applicable rate before pricing a service charge.
DGI, Innovations fiscales LF 2024; CGI arts 26-XXIV–XXV, 143, 144, 151Chad's transfer pricing rules occupy two articles of the Code Général des Impôts and one administrative instruction. CGI article 41, replaced by article 31 of Finance Law 2023 (Law n°016/PT/2022 of 30 December 2022), lets the Direction Générale des Impôts add back profits indirectly transferred to enterprises outside Chad on which the local taxpayer depends, or which it controls. CGI article 1000-XIV, replaced by article 32 of the same law, carries the documentation regime. The 2024, 2025 and 2026 finance laws left both untouched, so the 2023 text remains the operative law.
The statute never says pleine concurrence. It uses the classic French indirect-transfer formula — inflated or deflated purchase and sale prices, or any other means — and extends to enterprises that are themselves dependent on a group which also controls foreign companies. The arm's length principle enters through the DGI's Instruction n°02/MFBCP/SE/SG/DGI/DLCRFI/2023 (widely miscited as n°012), which equates the required price with what independent enterprises would agree in comparable conditions and cross-refers to article 9 of the OECD Model. Article 41 sits in the personal income tax part of the code but reaches companies through CGI article 134, and from 1 January 2026 is restated inside CGI article 26.
Two gateways bring a taxpayer into scope. The first is dependence: in law, where a foreign enterprise holds a preponderant share of capital or an absolute majority of votes — in practice above 51% — or exercises decision-making functions, whether directly, through a chain or between sisters; in fact, where a foreign enterprise can impose economic conditions, evidenced by imposed prices, reporting duties or royalties disproportionate to what is supplied. The second gateway dispenses with any link at all where the counterparty sits in a privileged-regime or non-cooperative territory.
The Instruction adopts the five OECD methods in their two familiar families: comparable uncontrolled price for commonly traded goods and unsuited to elaborate products or intangibles; cost plus for limited-risk service providers and subcontractors; resale price where the distributor is not the principal entrepreneur; the transactional net margin method across tangibles, intangibles and services; and profit split as a method of last resort, reserved for highly integrated transactions, high-value intangibles and situations where reliable comparables are absent. Method selection begins with a functional review whose stated purpose is to identify the principal entrepreneur — the entity holding the strategic assets, funding the principal functions and bearing the principal risks.
The tested party is the one for which the most reliable comparables exist, usually the less complex party, and internal comparables come first. Foreign comparables must not be rejected simply for being foreign. The search may be refreshed every three years, but the comparables' financial data must be updated annually. The arm's length range is customarily the interquartile range: a result inside it attracts no adjustment, while outside it the taxpayer must justify the position or the DGI selects the point to which it will adjust. The Instruction's own worked example — quartiles of 2.20 and 3.55 around a median of 3.00 — should be preferred over its loose reference to quartiles two and three.
CGI article 1000-XIV creates two obligations for one population: a documentation allégée, the declarative tier that compresses master file and local file into a single form, and a documentation complète. Both are owed by enterprises established in Chad — including foreign companies with a Chadian permanent establishment — whose annual turnover excluding tax or gross balance-sheet assets reach XAF 500,000,000, and which are dependent on or control foreign enterprises with which they transact. There is no higher threshold for the full report.
The light tier tracks OECD headings: group business and changes, legal and operational structure, the associated enterprises engaged in the controlled transactions, functions and risks affecting the Chadian result, main intangibles, group transfer pricing policy and organisation chart; then, at entity level, the Chadian business, the nature and amount of intra-group flows and royalties, cost contribution arrangements and any advance agreements or rulings, the method applied with its functional analysis, and the comparables. The full report is a conventional benchmarking study.
Both tiers are demanded with the annual Déclaration Statistique et Fiscale, which CGI article 1006 requires within four months of year end, extended to 30 April for traders, industrialists and farmers on the real or simplified regimes. Since the DGI's circular of 30 April 2025, no paper filing is authorised before an online e-Tax filing has been made. Documents in a foreign language must be translated by a sworn translator on request, failing which the accounts are rejected under CGI article 1000-X. There is no country-by-country report in Chad, and no exchange channel through which one could be received.
Chad's design keeps the burden where article 41 puts it: the DGI must prove the dependence link, then prove the abnormal transfer of profits. Weak margins, recurrent losses or below-sector profitability allow the administration to open an information request but, as the Instruction concedes, do not reverse that burden — and the administration must itself show that sector peers earn more. Adjustments should be made on the precise elements of the transaction; comparison with similar enterprises operating in Chad is expressly subsidiary, available only where precise elements are lacking.
Procedurally, an information request must be precise as to country, entity, product and amount, and must allow at least one month to answer, extendable on a reasoned request to no more than three months in total. An insufficient reply draws a mise en demeure with thirty days to complete it, and the notice must state the applicable sanctions. Silence permits assessment from the elements in the DGI's hands, though the proposed adjustments must be reasoned in law and in fact.
The primary penalty is disallowance of the charges the documentation does not cover, alongside the general fine of XAF 100,000 per missing document under CGI article 1056. CGI article 1000-XIV carries a fine of 5% of aggregate intra-group flows subject to a XAF 50,000,000 floor, and CGI article 1060 sets the late-filing scale — XAF 10 million for the first month of delay, 20 million for the second, then 25 million plus 5 million for each further month — text in force since 2023 and re-enacted by article 24 of Finance Law 2024. Disallowed amounts are then treated as distributed and bear IRVM, with the director in title presumed beneficiary and, in a loss year, the charge referred to the last profitable non-time-barred year. Payments to listed jurisdictions face a 50% deduction cap and a 25% IRVM uplift.
Advance certainty exists on paper. CGI article 1000-XIV allows a taxpayer to request an advance pricing agreement, and permits the DGI to conclude agreements with treaty partners' competent authorities; the Instruction describes the mechanics and warns that a unilateral agreement leaves double taxation untouched. No filing threshold, fee, term of years, renewal rule or roll-back has been published, and no implementing arrêté or APA guide exists. A first applicant would be negotiating the process as well as the pricing.
Chad has no domestic mutual agreement procedure article and no MAP guidance, and its treaty network is essentially the CEMAC bloc. Not being an Inclusive Framework member, it has never been tested by an Action 14 peer review.
Domestic recourse is therefore the real route, and it has narrowed. From 1 January 2026 a claim must reach the Director General of Taxes within six months of the recovery notice, or of payment where tax was paid spontaneously — replacing a window that formerly ran to the end of the second year — and the administration must answer within six months. Payment is suspended only if the taxpayer expressly requests it, quantifies the relief sought and pays the undisputed tax plus 15% of the disputed amount; the contentious bank guarantee was abolished in 2024. Appeals lie to the tribunal administratif and then to the Administrative Chamber of the Court of Appeal. No Chadian transfer pricing judgment has been published.
Chad has enacted no Pillar Two rules — no income inclusion rule, undertaxed profits rule or domestic minimum top-up tax appears anywhere in the 2023 to 2026 finance laws — and has adopted neither Amount B nor any simplified distribution return. As a non-member of the Inclusive Framework it has made no commitment to the two-pillar solution. Groups should model Chad as a conventional corporate tax jurisdiction: 30% since 2024, 25% for local processing and energy, a 2% minimum turnover tax, and an 18% withholding on foreign services (the consolidated code confusingly retains a 25% paragraph alongside it).
What is changing is the enforcement architecture. Article 51 of Finance Law 2026 institutes the contrôle fiscal informatisé from 1 January 2026: the DGI may examine by electronic means the data, documents, entries, processing and information systems a taxpayer uses, with access to its information systems and databases and a mandatory accounting-entries file, subject to prior notice, the adversarial principle and the limitation period. The same law widened the documents produceable on request to invoices, memoranda, contracts, fee notes, purchase orders and delivery notes, made accounts probative only where certified by a CEMAC-accredited chartered accountant, and permits a second general accounts audit of an already-audited year where cross-checks or a fraud complaint reveal a new fact (LPF art. L.50). A tax identification number now requires disclosure of shareholders and beneficial owners, and the rate on certain investment income falls from 18% to 15% — a cut that expressly spares interest and dividends paid to persons without a professional establishment in Chad or CEMAC, both of which were already taxed.
Four priorities follow. First, test the threshold on both limbs — turnover and gross assets — because an asset-heavy Chadian operation can fall into the regime on a modest revenue base, and remember that a permanent establishment counts as an enterprise established in Chad. Second, build both documentation tiers as a single project against a 30 April delivery: the full study is not something to be produced later on request, since the statute contemplates it accompanying the light form. Ask the DGI for the annexed template, which does not appear in the published scan.
Third, model the sanction as a cash number rather than a rate. A disallowance, plus IRVM on the deemed distribution, plus the 5% flow-based fine under CGI article 1000-XIV and the article 1060 late-filing scale will usually dwarf the primary adjustment. The head office and technical assistance cap of 10% of pre-deduction profit under CGI article 26, and the detailed schedule required by article 1000-V without which those charges are simply not deductible, are the most common entry points to an assessment.
Fourth, argue procedure. The burden on dependence and on abnormal transfer sits with the administration; adjustments must rest on the precise elements of the transaction; and the extended five-year period opens only where a foreign competent authority has actually been asked. In a jurisdiction with no published case law and a shortened claim window, the record built during the audit is the record that decides the case.
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