Congo, Democratic Republic of the

Taxable income consists of profits from any industrial, commercial, agricultural, or real estate operations entered into by a taxpayer in the Democratic Republic of the Congo, as well as any increases in the net assets as a result of such activities and any increases derived from capital gains, either realised or not, of any nature and origin.

Inventory valuation

Since adhesion of the Democratic Republic of the Congo into the Organisation for the Harmonisation of Business Law in Africa (OHADA) law treaty effective from 12 September 2012, or as from 1 January 2015 as far as accounting matters are involved, the inventory valuation methods permitted are as follows:

• The weighted average cost method.
• Last in first out (LIFO).

Capital gains

Capital gains are included in the corporate taxable basis of the local entity benefitting from the capital gain and, as such, subject to the 30% CIT.

However, new rules have been enacted by the updated Mining Code as regards capital gain realised by non-resident entities when selling shares. Indeed, capital gain recognised at the level of the legal entity that sold shares and is deemed to be of Congolese origin to the extent that the assets of the legal person whose shares were sold are located in the Democratic Republic of Congo. The tax is deducted at source by the assignee legal person who pays it according to the terms of payment of taxes due to the Treasury.

Capital gains realised by natural persons are subject to 20% tax.

Dividend income

Local-sourced dividends received by a local company are subject to a 20% income tax rate under standard law. 

Interest income

Local-sourced interest received by local companies is subject to the standard CIT regime.

Royalty income

The DRC Tax Law defines royalties as any kind of remuneration paid for the use, or for the concession, of a copyright on art works, scientific works, film works, brands, charts, any design or formula, or any secret process or recipe, as well as for the use of industrial, commercial, or scientific equipment and for intellectual property (IP) in any industrial, commercial, or scientific field.

The tax base of royalties is calculated by deducting 30% from the royalties invoiced (i.e. the taxable basis will be 70% of the royalties invoiced).

Personal income tax applies to the net amounts of the royalties, which are understood to be the gross amounts less the expenses or charges incurred by the beneficiaries with a view to acquiring or retaining them. In the absence of evidence, the expenses or charges are fixed at a flat rate of 30% of the gross amount of the royalties".
The term "royalty" refers to remuneration of any kind paid in particular for :
-  the use , or the right to use, copyright in a work literary, artistic or scientific, including cinematographic films, a patent, design or         model, trade name or sign, plan, formula or secret process;
- the use , or the right to use, industrial, commercial or scientific equipment;
- the granting of the right to exploit a mine or quarry for a specific or indefinite period, whether or not by the owner of the soil and subsoil;

- information relating to industrial, commercial or scientific experience;
- the right publicly display a portrait a person;
- advertising space;
- the granting of leasehold.

Royalties paid to resident companies are taxed at 30% under CIT.

Royalties paid to non-resident entities are taxed at 14%.

Foreign income

If an income is considered as foreign-sourced, by application of the territoriality principle, it is not taxable in the Democratic Republic of the Congo.