REPUBLIC OF BURUNDI

MINISTRY OF FINANCE, BUDGET AND ECONOMIC PLANNING

OFFICE OF THE MINISTER

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MINISTERIAL ORDER NO. 540/12.59 OF 01/04/2025 ON THE TAX TREATMENT OF CREDIT-LEASE OPERATIONS

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THE MINISTER OF FINANCE, BUDGET AND ECONOMIC PLANNING,

Having regard to the Constitution of the Republic of Burundi;

Having regard to Law No. 1/02 of February 4, 2008 on the fight against money laundering and terrorist financing;

Having regard to Law No. 1/34 of December 2, 2008 on the Statutes of the Bank of the Republic of Burundi;

Having regard to Law No. 1/01 of January 5, 2016 revising Decree-Law No. 1/41 of July 9, 1993 defining credit-lease operations and provisions applicable to the credit-lease contract and regulating the conditions for exercising these activities;

Having regard to Law No. 1/17 of August 22, 2017 governing banking activities;

Having regard to Law No. 1/05 of February 27, 2019 governing the Burundian capital market;

Having regard to Law No. 1/10 of November 16, 2020 amending Law No. 1/12 of July 29, 2013 revising Law No. 1/02 of February 17, 2009 on the establishment of Value Added Tax;

Having regard to Law No. 1/12 of November 25, 2020 on fiscal and non-fiscal procedures;

Having regard to Law No. 1/14 of December 24, 2020 amending Law No. 1/02 of January 24, 2013 on Income Taxes;

Having regard to Law No. 1/20 of June 20, 2022 revising Law No. 1/35 of December 4, 2008 on public finances;

Having regard to Decree No. 100/029 of February 9, 2024 amending Decree No. 100/029 of September 24, 2020 on the missions, organization and functioning of the Ministry of Finance, Budget and Economic Planning;

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HEREBY ORDERS:

Article 1:

This Order applies to all existing and future credit-lease contracts.

Article 2:

This Order aims to specify the application procedures for tax provisions relating to credit-lease operations, as defined by Law No. 1/01 of January 5, 2016 revising Decree-Law No. 1/41 of July 9, 1993 defining credit-lease operations and provisions applicable to the credit-lease contract and regulating the conditions for exercising these activities. It thus provides detailed directives concerning value-added tax exemption, expense deductibility, and the accounting of credit-lease operations, in accordance with prevailing fiscal standards and the National Accounting Plan in Burundi.

Article 3:

To benefit from the exemption provided for in Article 30 of Law No. 1/01 of January 5, 2016 revising Decree-Law No. 1/41 of July 9, 1993 defining credit-lease operations and provisions applicable to the credit-lease contract and regulating the conditions for exercising these activities, banks, financial institutions, and microfinance institutions authorized to conduct credit-lease operations by the Bank of the Republic of Burundi must meet the following conditions:

1. Proof of asset allocation: Institutions must submit to tax authorities the relevant credit-lease contracts, accompanied by invoices and other proof of purchase for assets designated exclusively for credit-lease operations;

2. Lessee documentation: They must also provide the necessary documentation to identify the lessee.

Article 4:

For the application of Article 31 of Law No. 1/01 of January 5, 2016 revising Decree-Law No. 1/41 of July 9, 1993 defining credit-lease operations and provisions applicable to the credit-lease contract and regulating the conditions for exercising these activities, institutions applying the suspension of value-added tax collection must comply with the following requirements:

1. Prior declaration: Any suspension of value-added tax billing on lessee leases must be declared to tax authorities within a period not exceeding fifteen (15) days from the date of occurrence of the event giving rise to said suspension, indicating the relevant assets and references to the corresponding credit-lease contracts.

2. Eligibility certificates: Institutions must provide documentation confirming that the lessee benefits from a value-added tax exemption regime. This includes a copy of the investment agreement, the eligibility certificate, or any other document granting the exemption.

Article 5:

In accordance with Article 32 of Law No. 1/01 of January 5, 2016, lessees may deduct depreciation expenses (amortization) related to assets acquired through credit-lease according to the following procedures:

1. Amortization calculation: Deductible amortization must be calculated based on the duration of the credit-lease contract and the initial value of the asset, in accordance with prevailing fiscal standards and the National Accounting Plan in Burundi;

2. Separate accounting: Lessees must maintain separate accounts for assets acquired through credit-lease and justify deducted amortization amounts during tax audits. Any undue deduction will be subject to readjustment by tax authorities, with applicable penalties where appropriate.

Article 6:

The Commissioner General of the Burundian Revenue Office is responsible for implementing this Order, which enters into force on the day of its signature.

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Done at Bujumbura, on 01/04/2025

THE MINISTER OF FINANCE, BUDGET AND ECONOMIC PLANNING

Hon. Nestor NTAHONTUYE