Congo (Democratic Republic of the)Tax Obligations Detailed

In the Democratic Republic of Congo, employers face various tax obligations, including corporate income tax, payroll taxes, and value-added tax.

Corporate Income Tax (CIT)

• The corporate income tax rate is 30%.
• The CIT return and final payment are due by April 30th of the following year.
• Estimated tax payments are required:
  • 30% before August 1st of the tax year
  • 30% before October 1st of the tax year
  • 20% before December 1st of the tax year

Payroll Taxes

• Social Security:

  • Employers contribute 5% for the pension branch. Employees also contribute 5% up to an annual ceiling of EUR 21,952.65.
  • Employers contribute 1.5% for occupational risks.
  • Employers contribute 6.5% for family benefits.

• Professional Training (INPP):

  • 3% for state-owned companies and private companies with up to 50 employees.
  • 2% for private companies with 51 to 300 employees.
  • 1% for private companies with over 300 employees.

• Employment Office (ONEM): Employers contribute 0.2%.

• Unique Tax on Salaries: A 7.5% tax on gross salary, replacing several previous taxes (lump sum tax on salaries, apprenticeship tax, National Housing Fund contribution, and National Employment Office contribution).

• The deadline for INSS, INPP, and ONEM returns is the 15th day of the following month after salary payment.

Value-Added Tax (VAT)

• The standard VAT rate is 16%.
• A reduced rate of 8% applies to specific products (e.g., certain food staples).
• Exports and similar transactions are subject to a 0% VAT rate.

Other Considerations

• Taxpayer Classification: Enterprises are categorized based on annual turnover: Large (above CDF 10,000,000,000), Medium, and Small. This impacts certain tax procedures and obligations.
• Tax Amnesty: A tax amnesty program may be available for penalties and interest on unpaid taxes from periods ending December 31, 2022. Eligibility criteria may apply.

This information is current as of February 5, 2025, and subject to change. It is essential to consult official sources or seek professional advice for the latest updates and specific situations.

In the Democratic Republic of the Congo (DRC), employee tax deductions encompass several areas, including income tax, social security contributions, and a special tax for expatriates.

Income Tax (IPR)

The Impôt Professionnel sur les Rémunérations (IPR), or Professional Income Tax, is levied on employee salaries and benefits. A standard deduction of 20% of the salary after social security contributions is applied. The tax rate is progressive and capped at 30% of the taxable salary.

• Tax Brackets (Annual Income): While the sources don't provide updated brackets for 2025, previous information shows a progressive structure. Consult official DRC tax authorities for the latest details.
• Casual Labor: Income from casual labor is taxed at a preferential rate of 15%.
• Severance Pay: Severance and termination indemnities are taxed at a specific rate of 10%.

Social Security Contributions (INSS)

The Institut National de Sécurité Sociale (INSS) manages social security contributions. Employees contribute 5% of their salary towards the pension fund. Employers also contribute to INSS for various benefits like pension, family, and occupational risk coverage, totaling approximately 14.2% as of January 2025.

• INSS Employer Contributions: This includes contributions toward pension (6.5%), family benefits (1%), occupational risks (1.5%), professional training (1%-3% based on company size), and employment fund (0.2%).

Expatriate Tax (IERE)

The Impôt Exceptionnel sur les Rémunérations des Expatriés (IERE) is an additional tax levied on expatriate salaries. The IERE rate is 25% of the employee's taxable income calculated for IPR purposes. However, mining companies and their subcontractors benefit from a reduced rate of 12.5% for the first ten years of operation, after which they are subject to the standard 25% rate.

Other Considerations

• Allowances and Deductions: Certain allowances, such as those for housing, transportation, and medical expenses, may be exempt up to government-specified limits. Additionally, an allowance of 2% per dependent, up to a maximum of nine dependents, can be deducted.
• Tax Filing and Payment: Employers are responsible for withholding employee taxes and remitting them to the tax authorities. Specific deadlines and procedures should be confirmed with the relevant authorities.

It's important to note that tax regulations are subject to change. Always consult official DRC tax authorities or a tax advisor for the most up-to-date information.

In the Democratic Republic of Congo (DRC), the Value Added Tax (VAT) is a consumption tax levied on most goods and services.

VAT Rates

• Standard Rate: 16% This applies to most goods and services.
• Reduced Rate: 8% Applies to specific goods like certain food items (frozen horse mackerel, salted fish, fresh or chilled bovine meat, husked rice, milk powder), packaged table water, iodized salt, ordinary soap, matches, and air tickets.
• Zero Rate: 0% Applies to exports and similar transactions.

VAT Registration

There is no VAT registration threshold in the DRC. All businesses making sales in the country, including foreign businesses, must register for VAT, even if they make only one sale. Non-resident businesses without a Permanent Establishment (PE) in DRC must appoint a local VAT representative. If a representative isn't appointed, the DRC customer becomes liable for the VAT payment through a reverse-charge mechanism. A simplified registration process exists for non-resident digital service providers.

VAT Filing and Payment

• Filing Frequency: Monthly
• Deadline: 15 days after the end of the tax period. For example, the return for January is due by February 15th.
• Payment: VAT is payable at the same time as the filing of the return.

VAT Exemptions

Several goods and services are exempt from VAT, including some banking and financial services, education, medical services, charitable and social activities, and transactions subject to specific taxes. Certain basic food items like locally-sold bread, wheat flour, corn, corn flour, along with domestic sales of animals, and agricultural inputs, are also VAT-exempt. Imports of wheat flour, corn, and corn flour are exempt as well.

VAT on Digital Services

As of January 1, 2024, a 16% VAT applies to non-resident providers of electronic services (B2C and B2B) to consumers in the DRC. This includes various services like software, social media, online telecoms, e-learning, streaming, and online advertising. There's no threshold for registration – registration is required from the first sale. A simplified online registration and reporting system is available for these businesses.

Import Duties

The DRC applies import duties on goods based on a three-tiered system:

• 5% for equipment goods, raw materials, agricultural supplies, and unassembled equipment.
• 10% for certain food items, industrial inputs, spare parts, and items for social services.
• 20% for clothing, furniture, cigarettes, and other finished products.

Items like postage stamps, fiscal stamps, stamped papers with face value, central bank notes, and titles are exempt from import duties. Exemptions also exist for goods imported for official use by embassies, consulates, international organizations, and for the personal use of diplomats, consular agents, and international civil servants. Donations and non-reimbursable subsidies under cooperation projects are also exempt.

Additional Information

This information is current as of February 5, 2025, and is subject to change. Consult with a tax advisor for the most up-to-date information.

The Democratic Republic of Congo (DRC) offers various tax incentives to attract investment and stimulate economic growth. These incentives target specific sectors like mining and generally aim to promote local development.

Investment Code Incentives

• General Incentives: The Investment Code provides general incentives applicable to various sectors (excluding mining, hydrocarbons, banking, insurance, and trade). These include exemptions from corporate income tax (CIT) for specified periods, accelerated depreciation, and loss carryforward for the first three tax years. Investments must meet certain criteria, including a minimum investment of USD 200,000 and compliance with environmental regulations.

• Eligibility Criteria: To qualify for Investment Code incentives, the investor must be a Congolese legal entity, make a minimum investment of USD 200,000, comply with environmental regulations, commit to training local personnel, and create added value equal to 35% of the initial investment within a specified timeframe.

• Application Procedure: Applications are reviewed by the National Agency for the Promotion of Investments (ANAPI) and submitted to the Minister of Finance for final approval.

Mining Code Incentives

• Specific Tax Benefits: The Mining Code offers a distinct set of incentives, including exemptions from withholding tax (WHT) on interest paid on foreign currency loans obtained abroad (under specific conditions), a reduced 10% WHT rate on dividends, and a special expatriate tax rate of 12.5% for the first ten years of a project (increasing to 25% thereafter). The code also allows deductions for specific provisions.

Special Economic Zones (SEZs)

• Designated Zones: Four SEZs are designated in Pointe-Noire, Brazzaville, Ouesso, and Oyo. These zones are intended to attract both domestic and foreign investments. As of February 2025, these SEZs have not yet been fully operationalized.

Carbon Tax

• Planned Implementation: Starting in 2026, the DRC plans to introduce a carbon tax on industrial activities, likely targeting the mining sector. The details of this tax are currently under review.

Additional Considerations

While no specific foreign tax credit is currently available in DRC law, double taxation treaties exist with countries like South Africa and Belgium. It's worth noting that the DRC government is focusing on increasing domestic revenue mobilization, which includes streamlining tax exemptions and combating tax evasion. As of February 5, 2025, this information is current and subject to change. Future tax policies will likely reflect the government's ongoing efforts to balance investment promotion with fiscal stability.