Mauritania payroll and tax overview.

Located on Africa’s west coast, Mauritania is bordered by Western Sahara and Algeria to the north, and Mali and Senegal to the south. One of western Africa’s most resource-rich nations, Mauritania has struggled with economic challenges throughout its history: located on the shores of the Atlantic Ocean, the country is ideally placed for international trade but thanks to an agriculture-based economy, did not emerge on the world stage until the 20th century. Agriculture remains an important part of 21st century Mauritania’s financial profile but the discovery of substantial iron, gold, and copper deposits has brought economic diversity and a range of international investment interests. In 2001, oil was discovered off Mauritania’s coast: although difficult to exploit, analysis has shown reserves of around 120,000,000 barrels - an amount which represented around a quarter of the state budget ($180 million) in 2006. Although Mauritania’s economic progress has been slow over the past decade, notable growth sectors include banking, fossil fuels, mining, agriculture, livestock, and tourism. Driven by the export of natural resources, Mauritania’s GDP reached $7.59 billion in 2019 with an estimated 6.7% growth. Mauritania is a member of the UN, the AU, AfCFTA and CEN-SAD and was ranked 152 on the World Bank’s Ease of Doing Business Survey 2019.

Why Invest in Mauritania?

Despite a challenging economic environment, interested investors may discover a number of reasons to venture into Mauritania:

• Economic reform: Mauritania’s government is attempting to position its economy as an attractive investment target. In 2017, the World Bank ranked Mauritania in the top 10 countries which had pushed through the most ‘business friendly’ reforms.
• Strategic location: At the western tip of Africa, and on the shores of the Atlantic, Mauritania represents a continental gateway. Beyond road links to neighbouring countries, including the Cairo-Dakar and the Trans-African highways, Mauritania also host two international seaports, and 20 airports.
• Oil expansion: Mauritania’s oil reserves have already attracted investment from across the globe, but the industry continues to expand. In addition to the explored Chinguetti field, new unexploited reserves may have been detected in the Taoudeni Basin.
• Economic diversity: Beyond its oil industry, Mauritania’s economic landscape is diverse, with sectors of particular interest including livestock, fisheries, agriculture, textiles, and renewable energy. Mauritania continues to be one of Africa’s most prominent sources of iron and copper.
• Investment initiative: Confidence in Mauritania is growing - in 2016, the World Bank delivered a grant of $10 million to the Nouadhibou Project, in an effort to stimulate foreign investment in the project, which aims to transform the management of the country’s fisheries.

Foreign Direct Investment in Mauritania

Mauritania remains relatively on the margin of foreign investments flows. The Foreign Direct Investment flows into Mauritania have been fluctuating during the recent years, including a significant dip in 2009 and in 2010 due to the global economic crisis and the country's own political instability. It reached over a billion USD in 2013 after a peak of 1.35 billion USD in 2012.

The majority of the investments have been involved in the sectors of oil exploration and exploitation, mineral mining of iron ore and gold, telecommunications with the acquisition of mobile phone licenses, and the construction sector.

Political tensions are persisting in the country. China is more and more interested in Mauritania and its traditional trading partners; including its European partners (primarily France) seem likely to pursue their investment projects in the country (infrastructure and telecommunications).

Registering a Company and Establishing an Entity in Mauritania

The company must have a legal entity established or be represented by a legally registered third party in order to process payroll. Any company operating in the country for more than 6 months should register an entity.

A SARL (Limited Liability Company) can be operational within 1 week to 10 days. In order to register standard Articles of Association must be established and be signed by someone with a power of attorney from the foreign company (if sole shareholder) or from the different partners in the case of multiple shareholders.

For registering a Branch, it is necessary to have legalized and authenticated copies of the Articles of Association from the company, certified by the Embassies/Ministry of Foreign Affairs. (Registering a branch usually takes longer).

All types of companies (SARL, SA, ETS) as well as Branches are required to register with the tax and social security authorities if they are looking to process payroll in this country.

It is estimated that once all registrations are in place, the actual payroll implementation process will take between three and five days.

If the client is already processing a payroll in-country using another provider, legally no other specific registrations/documents have to be completed to transfer the payroll to a new provider.

However, in practice the following documents are needed:

• Statement of the holidays acquired per employee to know what are the cumulated basis and the number of days as per the date of transfer;
• Statement of the cumulated salaries since the beginning of the year for the annual declaration of salaries;
• Statement of the cumulated payments to CNSS (employees/employer);
• Statement of the cumulated payments to CNAM, if any (employees/employer)
• CNSS numbers as employer;
• Statement of information on employees (internal numeration; CNSS number; name; salary structure)
• Any statement that will enable the collection of the information necessary to ensure the continuity of the payroll process and information for the client

Business Banking in Mauritania

Mauritania’s currency changed on 1st January 2018, turning from the Ouguiya (MRO) to the New Ouguiya (MRU) with an exchange rate of 1 MRU = 10 MRO.

It is not mandatory to make employee salary payments from an in-country bank account, however it is mandatory to make third party authority payments from an in-country bank account.

In terms of the different payment options to the employee and/or authorities, in Mauritania the employees can be paid in cash, by check or bank transfer, while for authorities the payment has to be completed by the 15th of the following month by certified cheque (ITS, CNSS, CNAM) or bank transfer.

The funds can be transferred from a client account to the employee’s bank account in the same day if the accounts are with the same bank or a minimum of 72 hours if they are with different banks (can take up to 10 days for the funds to clear).

Dealing with international transfers is possible but not always easy.

For expatriate salaries, the Central Bank considers 60% of the salary as being a normal level of savings to be transferred to the home country. The unspent balance is not treated as such and may create issues.

What Are the Working Days and Working Hours in Mauritania?

Mauritania observes a Sunday as the weekend and the working week is therefore Monday to Friday. Saturday is worked in some companies but not in government and banks.

The standard working hours for government departments are 8.00am to 5.00pm from Monday to Thursday and 8.00am to 12.00pm on Friday.

Private entities can structure their working hours differently and, to avoid working 9 hours a day from Monday to Thursday, they can work on Friday afternoon and on Saturdays.

Basic Facts about Mauritania

General

Mauritania is officially known as the Islamic Republic of Mauritania, and lies at the western tip of Africa, in the sub-Saharan Maghreb region. Bordered by the Western Sahara, Algeria, Mali, and Senegal, Mauritania’s history stretches back to the 3rd century, and the civilisation known as the ‘Berber Kingdom of Mauretania’. Mauritania was colonised by France in the late 19th and early 20th centuries, during which time its largely nomadic civilisations urbanised. After becoming independent in 1960, Mauritania became a presidential republic but struggled with political and economic turmoil for years in the aftermath. In recent years, Mauritania has taken steps to reform and modernise and, in 2014, was invited as a non-member guest to the G20 summit in Brisbane. Almost three quarters of Mauritania is covered by desert, and the country experiences a climate ranging from hot, dry Saharan heat, to extreme cold, wind and rain.

Full name: Islamic Republic of Mauritania

Population: 4.42 million (World Bank, 2017)

Capital: Nouakchott

Major Languages: Arabic and French

Major Religion: Islam

Monetary Unit: Mauritanian Ouguiya (MRU)

Main Exports: Iron (44% of total exports), fish, oil, gold and copper

GNI per Capita: $1,190 (World Bank, 2018)

Internet domain: .mr

International Dialling Code: +222

The Tax Year runs from 1st January to 31st December.

The key legislative authorities for tax and payroll purposes in Mauritania are the Tax Department, Ministry of Employment and Professional Training, Caisse National de Securite Sociale (CNSS) and Caisse Nationale d’Assurance Maladie (CNAM).

Income Tax in Mauritania

ITS (Tax on Salaries) is based on the gross salary after the deduction of social security contributions, CNSS and CNAM.

The applicable income tax rates in Mauritania are:

• 0% for income between MRU 0 and MRU 6,000
• 15% between MRU 6,000 and MRU 15,000
• 25% between MRU 15,000 and MRU 27,000
• 40% over MRU 27,000

Other than the monthly income tax contribution, an apprenticeship tax of 0.6% of the annual payroll costs has to be paid annually.

The tax contributions must be made to the authorities by the 15th of the following month.

The typical penalty awarded for the late submission and payment of ITS is 10% of the amount due.

Social Security in Mauritania

In Mauritania, both the employee and employer make monthly contributions to CNSS and CNAM.

CNSS (Caisse National de Securite Sociale): The employee contributes 1% of his monthly salary and the employer contributes 13% to Social and 2% to Medical. The maximum monthly earnings for contribution calculation purposes are 15,000 ouguiyas.

CNAM (Caisse Nationale d’Assurance Maladie): The employee will contribute 4% of the monthly salary and the employer will contribute 5%. The basis is the gross salary and employees are to be under open term contracts.

The social security payments must be made to the authorities:

• Quarterly - Before 15th of next month (for less than 20 employees)
• Monthly - Before 15th of next month (for more than 20 employees)

The typical penalty awarded for the late submission and payment of social security contributions is 10% of the amount due to CNSS.

Government Pension Scheme

Old-age pension qualifying conditions: Age 60 for both men and women (for women it was changed from 55 to 60 in 2016) with 20 years of insurance and 60 months of contributions in the last 10 years (including those made under the previous non-public program). The pensionable age is reduced by 5 years if prematurely aged.

Retirement from gainful employment is necessary and the pension is payable abroad if there is a reciprocal agreement.

Reporting Tax in Mauritania

Monthly:

• Déclaration – 3 sets:

1. ITS
2. CNSS (if more than 20 employees)
3. CNAM

The documents should be submitted to the Tax Department/CNSS/CNAM at the latest by 15th of next month.

Information required for completing the above mentioned forms: the employees names/salaries/date of start/end

Quarterly:

Déclaration – CNSS (if less than 20 employees)

Annually:

• Annual Salary Declaration
• Apprenticeship tax

The documents can be submitted by the payroll provider, however only after they’ve been signed and sealed by the client or by a representative with a relevant PoA.

New Employees in Mauritania

New employees must be registered with the local authorities when the employment contract is signed and the employer must declare them to social security.

Registration is required for ITS and CNSS payments and is usually done within the first payment to be made on behalf of the new employee.

To set up a new employee the following are required:

• Two ID photos
• A copy of ID card (new ID card for Mauritanians)
• Birth certificate
• Copy of first page of the CNSS book (if already registered)
• Criminal record
• CV
• Copies of diploma
• Copies of experience certificates
• Certificate stating the new employee is free from any employment contract with anyone and allowed to engage with the company
• Wedding certificates
• Copies of the family members
• ID cards / birth certificates for minors

Expat new starts need a work permit to be issued before starting work.

Officially, the work permit has to be issued before starting work, however it’s common practice for an expat to start working on a “Mission Letter” basis.

Leavers in Mauritania

There are no legislative specifications regarding the time-scale for an employee’s final payment, however it is usually no later than the eighth of the following month, which is the limit date stated by the law for monthly salary payment.

Notifications have to be made to the local authorities when there is a leaver: When a local employee leaves the company declarations must be made to CNSS & CNAM or for expat employees their work permit must be returned and declaration to CNSS & CNAM must be made.

Additionally, an annual declaration of leavers to Tax Department through the Annual Declaration of Salaries is mandatory.

Payroll in Mauritania

Payroll in Mauritania involves certain withholding obligations on the part of employers, for each pay cycle. Taxes due from employee salaries include income tax, and social security contributions, (for health, disability and unemployment insurance, and pension schemes). Failure to observe compliance regulations may result in financial penalties.

It is not legally acceptable in Mauritania to provide employees with online payslips.

The payroll provider does not need any specific licensing to make the tax and/or social security filing on behalf of the client. Payroll reports must be kept for a minimum of 10 years.