Congo, Republic of
Value-added tax (VAT)
The Congolese VAT rate is 18%. In addition to VAT, a surtax calculated at the rate of 5% applies to the amount of VAT, which must be invoiced and paid at the same time as the VAT. Therefore, the VAT rate is globally 18.9%. The surtax is not deductible (final cost).
A reduced VAT at the rate of 5% is levied on the following products produced locally:
- glass products.
- butane gas.
- mineral water.
Under the provisions of the VAT Law, all economic activities conducted in the Republic of Congo are subject to VAT, regardless of their purpose, profitability, or the legal status of the business performing them, and irrespective of whether these activities are habitual, occasional, or originate in the Republic of Congo or from a foreign country. Therefore, any person, natural or legal, engaged in an industrial, commercial, or professional activity is subject to VAT unless specifically exempt by law.
Section 8 of the VAT Law states that a service is considered as provided in the Republic of Congo when the service is used or exploited or materially locatable services performed in the Republic of Congo or the provision of intangible services when the recipient is established in the Congo.
In principle, an entrepreneur is entitled to credit the VAT paid on purchases of goods, equipment, and services for use in business (input VAT) against the total of the tax charges to one's customers for deliveries made and services rendered (output VAT).
Taxpayers not exclusively carrying out transactions giving rise to a VAT deduction shall deduct VAT proportionally on the portion of the income pertaining to taxable transactions.
VAT payers carrying structural VAT credit have the obligation to do inventories in the presence of tax administration representatives for companies in October, failure to which the VAT credit shall be cancelled.
VAT paid on behalf of foreign suppliers, provided that the related services have not been subject to income tax in Congo are not deductible.
VAT payers have the obligation to provide an excerpt of their VAT trial balance of each account on VAT in accordance with the accounting system used by the company, failure to which all VAT deductions shall be added back.
Taxpayers without a Tax Identification Number (NIU) and a receipt issued in their name by the collection service, indicating the amount of VAT paid will lose the right to deduct the VAT on custom clearance duties on goods.
Exporters subject to VAT who realise more than 80% of their sale transactions abroad are obligated to withhold VAT paid on the purchases of goods and services (the list of exporters entitled to withhold VAT will be published by the tax authorities).
VAT resulting from tax assessment is not deductible.
VAT paid in cash in connection with invoices exceeding XAF 500,000 is not deductible. VAT paid on behalf of foreign suppliers, provided that the related services have not been subject to income tax in Congo, is not deductible.
A VAT return must be filed on a monthly basis before the 20th day of every month.
When applicable, import duties are payable at rates ranging from 5% to 30% on the customs value of imported goods. Customs value is calculated on the cost, insurance, and freight (CIF) level.
Customs duties rates
|Raw materials and capital goods||10|
|Intermediate and miscellaneous goods||20|
Additional entry taxes
Additional entry taxes apply on the importation of goods, such as:
- Economic and Monetary Community of Central Africa (CEMAC) integration tax: 1% on CIF value.
- The African integration contribution: 0.2% on CIF value.
- Statistic tax: 0.2% on CIF value.
- Organisation for the Harmonisation of Business Law in Africa (OHADA) contribution: 0.05% on CIF value.
- Economic Community of Central African States (CEEAC) contribution: 0.04% on CIF value.
Reduced rate and exemption incentives
Imports of agricultural, horticultural, forestry, or fishery equipment and machinery, as well as fertilizers and other agricultural inputs, are exempt from VAT and customs duties. This list for VAT and customs duties exemption has been updated by the 2020 Finance Act.
The 2018 Finance Act provides for the application of a reduced rate of VAT to the customs border. Imports of products benefiting from the reduced rate of 5% (gas oil and lubricants imported from Cameroon by logging companies established in the Republic of Congo) or the overall reduced rate of customs duties, as well as imports of butane gas, are now subject to reduced VAT rate of 5% at the customs border.
Imports of wheat flour or of products similarly referenced for custom duties purposes are now subject to customs duties at the standard rate of 30%.
The forestry tax now applies to exports of resin and other exudates extracted from trees in natural forests and plantations, as follows:
Resin exports from natural forests and plantation trees are now subject to a 4% customs duty upon their export, on the free on board (FOB) value declared.
Computer royalty at a varying rate from 0.5% to 2% to cover expenses incurred by the Customs Administration on computer data processing, is applicable without exception or exemption to all importation and exportation of goods. The royalty applies on the customs taxable value of any imported or exported goods in the Republic of Congo. Computer royalty at 0% is applicable to transactions relating to donations, projects and other imports carried out by embassies, international non-governmental organisations covered by a headquarters agreement and on the export of crude oil.
Imports of agricultural, horticultural, forestry, or fishery equipment and machinery, as well as fertilizers and other agricultural inputs, are subject to the computer royalty and the community taxes.
The Finance law for 2020 has abolished the reduced rates and exemptions from computer royalty granted to all sector of activities.
The Finance law for 2020 establishes the list of products that are compulsorily subject to excise duties and therefore without possible exemption.
Excise duties are exclusive of other taxes assimilated to them.
The rates of excise duty shall be fixed as follows:
- Tobacco: 16.5%.
- Alcoholic beverages: 12.5%.
- Luxury food products, perfumes and cosmetics, arms and ammunition, jewellery: 25%.
- Motor vehicles and motorcycles: 15%.
- Gaming and entertainment equipment: 25%.
Land tax on built properties
Land tax is payable annually on built properties and is due from the owner. However, properties built for the purpose of accommodation are exempt for ten years, and properties built for business purposes are exempt for five years.
The effective rate for properties built for business purposes is determined every year by the local council. In this circumstance, the land tax is levied on the rental value after a deduction of 75% (decline, maintenance, and repair expenses).
Regarding properties built for accomodation purposes, the effective rate of the tax is determined based on the cadastral value, which is equal to the price per square metre multiplied by the land area. The price per square metre for these properties, which is halved for each floor, in the case of level buildings, is determined as follows:
- Zone 1 (downtown of full-function municipalities): XAF 250.
- Zone 2 (the districts of the said municipalities and the head of departments): XAF 150.
- Zone 3 (district main-towns): XAF 25.
- Zone 4 (other localities): XAF 12.5.
Land tax on non-built properties
Land tax is payable annually on non-built properties and is due from the owner. However, properties intended for plantations and breeding are temporarily exempt for a three to ten year range. The effective rate of the tax is determined based on the cadastral value, which is equal to the price per square metre multiplied by the land area.
Land tax on built properties is equal to the cadastral value after 75% deduction, while for un-built properties the tax is equal to 50% of the cadastral value. The land tax rate for built properties is at18% in Pointe-Noire, and 20% in Brazzaville while the rate is at 40% for un-built properties.
The price per square metre for these properties is determined as follows:
- Zone 1 (downtown of full-function municipalities): XAF 125.
- Zone 2 (the districts of the said municipalities and the head of departments): XAF 75.
- Zone 3 (district main-towns): XAF 12.5.
- Zone 4 (other localities): XAF 6.25.
Rent tax is at the rate of 1/12 of the annual rent, paid no later than February 20 each year or annually.
For new lease agreements, the rent tax is due within three (3) months following the date of entry into possession, at the rate of the 1/12 of the total rents due on 31 December of the said year.
The rent tax is imposed on the occupant of the premises (whether the occupant is the owner, a tenant, or a subtenant).
The rent tax is paid by the tenant on behalf of the owner, or by the subtenant on behalf of the tenant. The tenant/subtenant has the legal obligation to pay this tax on behalf of the lessor. Tenant and subtenants can make deduction of the tax paid between January 1 and April 10 of the same year from the rents due to the owner.
A 50% fine, assessed on the amount of the tax, is due for any late payment of the rent tax.
Registration fees and stamp duties
Lease agreement registration fees amount to 3% of the value of the annual rent paid during the tax year, including premises charges if any. ‘Additional centimes’ also apply at a 5% rate of the registration fees. Stamp duties and registration fees should be paid for the total duration of the lease agreement. In the case where the lease agreement is renewed, stamp duties and registration fees should be paid for the renewable period.
Stamp duty ranges from XAF 200 to XAF 20,000 on certain documents.
Examples of documents that are subject to stamp duty include:
- Letters of agreement and other letters that are prepared for use as evidence of act, fact, or condition of civil nature.
- Notarial deeds and their copies.
- Visas and flight tickets.
The following fees for the registration of contracts are due within three months from date of signature:
- Purchase orders for public contracts at the rate of 2% for contracts with a value exceeding XAF 10 million.
- Subcontracts in the building construction and public work sector at a fixed fee of XAF 100,000.
- Insurance contracts are registered free of charge and failure to register such contracts will be subject to penalty at the fixed fee of XAF 3 million.
- A fixed fee of XAF 1 million for the registration of every oil services contract with foreign companies and their sub-contractors before the execution of the contract.
- All insurance policies carried out by oil, mining, and telephone companies are subject to registration free of charge; failure to register will result in penalties that total XAF 3 million.
- Registration fee on lease of movables and immovables used for habitation or commercial purposes at the rate of 3%.
- Registration fee on the transfer of rights in a lease at the rate of 10%.
- Private contracts are registered at 1% of the contract amount.
- Novation contracts are registered free of charge.
- Registrataion of successor agreements arising from novation contracts are done under the same conditions as transfers of ownership for consideration of goodwill or customers, even when the said agreements are not accompanied by a transfer of customers.
- Purchase orders concluded in execution of a base oil contract are registered free of charge and failure to register within deadline will trigger a fine of XAF 10,000 per purchase order.
- Purchase orders concluded without a base oil contract are registered at a proportional registration fee of 1% and late registration gives rise to fines equal to the amount due.
Private contracts signed abroad are subject to registration within one month from their date.
Insurance contracts shall be registered and tax on insurance paid on the 20th day of the month following the insurance subscription. All importers have an obligation to insure imported equipment with local insurance companies.
Transfer of company shares are subject to a 5% registration fee.
Assignments of claims between legal entities governed by private law are subject to a registration fee of 4% based on the capital gain
resulting from the assignment.
Deeds materializing the transfer of participating interests (rights and obligations) in oil contracts are subject to a proportional registration fee of 5%, with a minimum collection of 1,000,000 FCFA.
The direct or indirect transfer of assets or social rights of Congolese companies is also subject to a registration duty of 5% calculated on the value of the assets transferred and social rights of these companies. This registration duty is also due in the event of change of control of the company by a change of at least 60% shareholding.
Real state properties for the period from 1 January 2018 to 31 December 2020 are subject to registration based on the flat-rate zone fees, summarised as follows:
- Zone 1 (downtown of full-function municipalities): XAF 1 million.
- Zone 2 (districts of said municipalities and head of departments): XAF 300,000.
- Zone 3 (district main towns): XAF 100,000.
- Zone 4 (other localities): XAF 25,000.
Single tax on remuneration
A single tax, at the rate of 7.5% on the gross salary of resident employees and non-resident seafarers’ employees, shall be borne by the employer. The tax is 6% on the gross salary of non-resident, non-seafarers’ employees. The rate of the single tax on salaries due by oil companies is fixed at 2.5% of the gross salary. This tax is payable on the 20th day of the following month after the remunerations were due.
The employer shall be liable for the following social contributions:
- Family allowance fixed at the rate of 10.035% of gross salary, benefits in kind inclusive, capped at XAF 7.2 million annually.
- Work accident contribution fixed at the rate of 2.25% on gross salary, benefits in kind inclusive, capped at XAF 7.2 million annually.
- Old age, invalidity, and death insurance fixed at the rate of 8% of gross salary, benefits in kind inclusive, capped at XAF 14.4 million annually.
Oil and gas
Specific rules and caps apply for the upstream (production) oil and gas industry.
Generally, oil and gas companies are now subject to taxation as under the common law.
Subject to the provisions of international tax treaties, interest on loans paid to foreign natural or legal persons by oil companies established in the Congo, where such loans relate to acquisitions directly intended for studies, research, exploration, development and exploitation of oil, are subject to a 5% withholding tax.
Royalties in the energy and hydraulic sector
For the energy sector, the royalty rate is as follows:
- 1% on turnover for independent producers.
- 0.75% on turnover for self-producers.
For the hydraulic sector, the fee ranges to XAF 400 per cubic metre of water withdrawn, depending on the usage (i.e. mining, industrial, agropastoral, etc.).
Any delay in the payment of the royalty is subject to 10% penalty, and omission to pay is subject to penalty at 100%.
Business tax and Solidarity contribution for universal health insurance coverage
The business tax ('patente', in French) is a tax collected for local communities.
Legal entities that carry out, in the Republic of Congo, a commercial activity, industrial activity, or any other activity not included in the statutory exemptions are subject to business tax.
The taxable basis of the business tax is:
- For taxpayers under the general regime: The annual turnover, excluding taxes of the previous fiscal year declared or assessed by the administration, for fiscal years ended on 31 December of the year N-1 and to be filed to the tax administration between 10 April and 20 April of the year N.
- For taxpayers that do not realise turnover: All operating expenses in the Republic of Congo.
Newly registered companies in their first calendar year are subject business tax based on the forecast turnover which they declare.
Oil companies are subject to the contribution business tax under the conditions of ordinary law but would be liable to 50% of the tax due.
Foreign companies subject to the deemed profit tax regime are taxed for the entire year from the start of operations in the Republic of Congo on the basis of the estimated contract value of their services.
The business tax is payable on the basis of graduated rates as follows:
|Annual turnover (XAF)||Rate|
|Below 1,000,000||XAF 10,000|
|1,000,001 to 20,000,000||0.75%|
|20,000,001 to 40,000,000||0.65%|
|40,000,001 to 100,000,000||0.45%|
|100,000,001 to 300,000,000||0.20%|
|300,000,001 to 500,000,000||0.15%|
|500,000,001 to 1,000,000,000||0.14%|
|1,000,000,001 to 3,000,000,000||0.135%|
|3,000,000,001 to 20,000,000,000||0.125%|
Business tax is due for the 12-month period from 1 January to 31 December of the taxation year and must be paid in full by the taxpayer, not later than 20 April of each year. Beyond this date, the taxpayer is liable to a penalty of 100% of the amount in excess of the principal amount.
Business tax due by foreign companies subject to the deemed profit tax is payable within 15 days after the beginning of activities. Otherwise, a penalty of 100% is applied.
Until now, the situation of taxpayers having no turnover or operating expense in the Republic of Congo was not dealt with. With the Finance Act 2018, taxpayers having no commercial contract or operating expense in the Republic of Congo will be subject to a 25% business tax, applied on the amount of the last business tax paid normally.
Business tax paid to the Inland Revenue is not refundable.
The solidarity contribution for universal health insurance coverage is payable by legal entities, individual farmers and holders of high incomes for the fraction of income exceeding XAF 500,000.
This contribution, liquidated at the rate of 0.5%, is based on the amount of the contribution for business tax during the financial year. The contribution due by companies is spontaneously declared and paid by the taxpayer to their tax residences, within the same deadlines as for the business tax and late filing and payment are fined in the same manner as for business tax.
Tax on company-owned cars
The tax on company-owned cars applies to the previous fiscal year company-owned cars and is due on 20 March at the latest.
With the exception of estate cars, private cars of companies falling into the category of own use cars for the issuance of vehicle registration documents are subject to tax.
The tax rates vary from XAF 200,000 for engine ratings not over nine horsepower, to XAF 500,000 for the rest.
Cars registered more than ten years ago are exempt from tax.