Tax
Territorial taxation with a 25 per cent company rate and heavy reliance on trade taxes
The Code Général des Impôts imposes corporate tax at 25 per cent and a consumption tax on goods and services. Free-zone entities receive extensive exemptions, and customs revenue is disproportionately important to the budget.
Key rules
- Jurisdiction — National. The Direction Générale des Impôts administers direct taxes; customs duties are collected by the Direction des Douanes.
Governing law
- Code Général des Impôts
- Loi 53/AN/04 on free zones — exemption regime
- Loi 107/AN/00 introducing the taxe sur les transactions
In practice
Djibouti's revenue base is unusual in that transit trade, port operations and payments associated with foreign military presence carry weight that domestic income taxation does not. Corporate income tax sits at 25 per cent on territorial-source profits, with a minimum tax based on turnover for loss-making or low-margin businesses, which is the provision that most often surprises new entrants. Free-zone status confers long exemptions from corporate tax, customs duties and several indirect taxes, and because the zones are central to the national strategy the exemptions are broad rather than marginal — meaning the effective tax position of a logistics business depends almost entirely on whether it sits inside or outside a zone. A conventional VAT has been discussed repeatedly; the operative indirect tax remains a consumption levy rather than a full credit-invoice VAT.