CongoTax Obligations Detailed

In the Democratic Republic of Congo (DRC), employers face various tax obligations related to payroll, social security, and other levies. As of today, February 5, 2025, these include specific percentages for INSS, INPP, and ONEM contributions, along with VAT and other considerations. Please note that tax laws and regulations can change, so staying updated is crucial.

Employer Payroll Taxes and Contributions in DRC

• INSS (Institut National de Sécurité Sociale):

  • Occupational Risks: 1.5% (employer)
  • Pension: 5% (employer) and 5% (employee)
  • Family Benefits: 6.5% (employer)

• INPP (Institut National de Préparation Professionnelle):

  • 1% - 3% (employer, varies by company size)

• ONEM (Office National de l'Emploi):

  • 0.2% (employer)

Employee Payroll Taxes and Contributions in DRC

• INSS Pension: 5% (employee)

Other Tax Obligations

• Value Added Tax (VAT): Standard rate is 16%, with reduced rates (8%) and exemptions for specific goods and services. Exports are zero-rated.
• Personal Income Tax (IPR): Progressive rates apply, capped at 30%. Tax is withheld from employee salaries.
• Tax on Casual Labor Salaries: 15% (employer)
• Special Expatriate Tax: 10% of the basic salary (employer). This does not apply to the employee.
• Corporate Tax: The standard corporate tax rate is 30%.

Tax Deadlines and Filing

• Monthly payroll taxes and contributions are generally due by the 15th of the following month. Annual declarations for professional taxes on remuneration (IPR) have varying deadlines, sometimes extended by the tax agency (Direction Générale des Impôts or DGI). Official communiqués provide specific dates.
• Specific deadlines and requirements can vary depending on the type of business, its size, and the relevant tax authority (e.g., DGI, IDFP for oil companies, UME for medium businesses, or UGE for large companies).

Tax Amnesty

Tax amnesties are sometimes offered. One such amnesty, related to penalties and interest on unpaid taxes up to December 31, 2022, was proposed with a deadline of June 30, 2025. However, details should be verified with official sources, as these programs can evolve.

Employee tax deductions in the Republic of Congo are determined by a progressive tax system with tiered rates, social security contributions, and certain allowable deductions.

Income Tax

Income tax is calculated based on a progressive system with the following tiers (as of January 1, 2025):

• 3%: Annual income up to 1,944,000 CDF
• 15%: Annual income between 1,944,001 and 21,600,000 CDF
• 30%: Annual income between 21,600,001 and 43,200,000 CDF
• 40%: Annual income exceeding 43,200,001 CDF

Social Security Contributions

Employees contribute 4% of their gross salary towards the National Social Security Fund (INSS) for pension. There's an annual ceiling of 21,952.65 EUR for this contribution. The employer also makes social security contributions including: INSS Occupational risks (1.50%), INSS Pension (5%), INSS Family Benefits (6.50%), National office for professional training (INPP) (1.00%-3.00% depending on company size), and the National office of employment (ONEM) (0.20%). The total employer social security contribution is 14.20%

Other Deductions

• A standard deduction of 20% of the salary after social security contributions is applied.
• Limited family allowances up to 5,000 XAF per child may be deductible.

Employer Obligations

Employers are responsible for withholding employee taxes and social security contributions and remitting them to the relevant authorities. Casual and consultant salaries are taxed at a flat rate of 15%, withheld by the employer. For expatriates, an additional tax of 12.5% is applied to their basic salary for the first 10 years of a project, which rises to 25% thereafter for mining companies and their subcontractors. This tax is deductible only for mining companies. A 25% rate applies in all other cases.

Tax Year and Administration

The tax year in the Republic of Congo runs from January 1 to December 31. All income, benefits, and applicable deductions are considered for the tax period within this timeframe. It's advisable to consult official government resources or a tax professional for the most up-to-date regulations, specific deduction limits, and compliance requirements. The information provided here is current as of February 5, 2025, and may be subject to change.

In the Democratic Republic of Congo (DRC), the standard VAT rate is 16%, with a reduced rate of 8% applying to specific goods like certain foodstuffs and air tickets. Exports are subject to a 0% VAT rate. As of January 1, 2024, non-resident providers of electronic services are also required to collect VAT. Several essential food products are exempt from VAT collection until December 31, 2025.

VAT Rates in the DRC

• Standard Rate: 16% (applicable to most goods and services)
• Reduced Rate: 8% (applicable to specific goods: frozen horse mackerel, salted fish, fresh or chilled bovine meat, husked rice, milk powder, packaged table water, iodized salt, soap for ordinary use, matches, and air tickets)
• Zero Rate: 0% (applicable to exports)
• Exempt Goods (until December 31, 2025): beef, pork, offal products, poultry, certain fish, milk powder, rice, corn, corn flour, and sugar.

VAT Registration

There is no VAT registration threshold in the DRC. All businesses making sales in the country, including those making only one sale and non-resident providers of electronic services, must register for VAT. Non-resident businesses without a permanent establishment can register through a simplified process via a dedicated online portal. This process avoids appointing a local tax representative.

VAT Filing and Payment

• Frequency: Monthly
• Deadline: Within 15 days after the end of the reporting period (e.g. for sales in April, the return is due by May 15th)

VAT Exemptions and Special Cases

• Exempt Services: Certain banking and financial services, education, medical services, charitable and social activities, and transactions subject to specific taxation.
• Other Exempt Goods: The import of wheat flour, corn, and corn flour; local sale of bread, wheat flour, corn, and corn flour; domestic sales of animals; import and sale of agricultural inputs.
• Non-Resident Suppliers: If a non-resident business without a permanent establishment doesn't appoint a local VAT representative, the DRC resident customer becomes liable for the VAT payment through a reverse-charge mechanism.

Digital Services VAT

Since January 1st, 2024, non-resident providers selling electronic services (e.g. downloads, streaming, online services, software, advertising) are required to charge 16% VAT to DRC customers. There is no registration threshold, meaning registration is required even for a single sale.

VAT Invoicing

Non-resident suppliers must issue VAT invoices to DRC customers to support their tax deductions. Without a valid invoice, authorities may disallow the deduction of the related expenses. Invoices should adhere to local standards and may require translation.

This information pertains specifically to the Democratic Republic of Congo (DRC) and not the Republic of Congo. The two countries have distinct tax regulations. Information is current as of today, February 5, 2025, and is subject to changes in tax legislation.

The Republic of Congo offers various tax incentives to attract investment and stimulate economic growth.

General Tax Incentives

• New Businesses in Remote Areas: Businesses registered under the (G) or (S) regimes operating in remote areas receive a 50% reduction in corporate income tax.
• Reinvestment of Earnings: Businesses reinvesting at least one-third of their existing assets in new investments can benefit from a 50% corporate income tax reduction for three years following the investment. This requires a declaration of planned and existing investments and capital assets to the permanent secretary of the National Investment Commission.
• Special Economic and Industrial Zones: These zones offer significant tax benefits:
  • Exemption from corporate income tax (CIT) and dividend tax for the first six years.
  • Reduced CIT and dividend tax rates (5% and 10% respectively) from years seven to ten.
  • Permanent CIT rate of 15% and dividend tax rate of 10% after ten years.
  • A permanent single tax on remuneration of 2.5%.
  • Exemption from business creation registration fees and 50% reduction on transfer deeds.

Investment Code Incentives

Congo's Investment Code outlines three regimes based on investment amount, location (remote areas), or presence in a Special Economic Zone. Benefits can include:

• 50% reduction in registration fees for business foundation, capital increases, mergers, and stock/share transfers.
• 50% to 100% exemption from corporate income tax. CIT exemptions can apply based on company size or activity. Personal income tax exemptions can also apply under similar criteria.
• Accelerated depreciation is allowed.
• Carry forward losses for the first three tax years is permitted.
• Zero-rate VAT on exported products.

Other Tax Considerations

• Corporate Income Tax Rate: The standard corporate income tax rate in Congo is 30%. This rate is projected to remain stable. Many tax incentives aim to reduce this rate.
• Mining Sector Incentives: The Mining Code offers a separate set of tax benefits for mining companies, potentially combined with benefits from the Investment Charter. These incentives have been criticized due to possible revenue loss.
• Tax Administration: Multiple bodies administer taxes: tax departments at the Ministry of Finance, the National Commission on Investments, and a separate agency for special economic zones.

Please note: This information is current as of February 5, 2025, and may be subject to change. Consulting with a tax professional or relevant government agency is recommended for the most up-to-date information and specific application procedures.