Congo, Republic of

The Finance Law for the year 2024 promulgated by the President of the Republic introduced changes to the General Tax Code and non-codified texts, the main ones of which are summarised below:

• Deductibility of provisions set aside in accordance with Central African Banking Commission (COBAC) regulations. Provisions set aside by lending institutions and other legal entities in the same business sector, in accordance with COBAC Regulation R-2018/01, are deductible from their taxable profits for corporate income tax (CIT) purposes.
• Restoration of the minimum tax (TSS) at the rate of 2%. The minimum tax is now levied at a rate of 2% for taxpayers whose income has remained in deficit for two consecutive years. 
• Adjustment of the penalty for failure to produce supporting documents during the contradictory phase. Any production, after receipt of the tax assessment letter, of documents, supporting evidence, and other accounting vouchers duly requested during the contradictory phase is null and void.
• Raising of the threshold for contentious files, copies of which must be sent to the Minister of Finance. The Minister of Finance must be sent a copy of all contentious claims where the amount of taxes contested, in principal and penalties, exceeds 1 billion CFA francs (XAF).
• Raising of the thresholds for jurisdiction in contentious matters. The Departmental Director of Taxes and Domains is empowered to rule on all contentious claims where the disputed amount, in principal and penalties, does not exceed XAF 50 million. The General Director of Taxes and Domains is empowered to rule on all contentious claims whose disputed amount, in principal and penalties, does not exceed XAF 1 billion. The power to rule in contentious matters is exercised by the Minister of Finance above the threshold of competence of the General Director of Taxes and Domains.
• Payment of processing fees to the public accountant. Payment of the processing fees is now made to the tax collector of the applicant's tax residence, against a receipt which must be attached to the claim, thus confirming current practice.
• Clarification on the addressee of the certified cheque for payment of local taxes. The certified cheque has to be made payable to the Treasury.
• Application of registration duties to independent counter-guarantees and all types of security not provided for under Organisation for the Harmonisation of Business Law in Africa (OHADA) law but accepted in the Congo. Autonomous counter-guarantee agreements and deeds recording all types of security not provided for under OHADA law but allowed in the Republic of Congo are subject to a proportional registration duty of 1%.
• Application of registration duties to contracts and treaties deemed to be commercial deeds and made under private signature. Contracts and treaties deemed to be commercial deeds by articles 3 and 4 of the OHADA Uniform Act on General Commercial Law and made or entered into under private signature are subject to registration duties at the rate of 1% of the contract estimate made by the parties.
• Application of registration duties to cash management agreements. Cash management agreements between group companies are subject to registration formality at a fixed rate of XAF 100,000. These deeds must be submitted to registration formality within three months of their date. However, their registration rate is a proportional duty of 1% of the amount of advances received or granted, when these agreements:
  • are concluded between companies that do not belong to the same group,
  • are submitted late for registration or are not submitted for registration, or
  • do not include the mandatory information required by the law.
• Application of registration duties to factoring agreements. Factoring agreements are subject to registration duties at the rate of 1% of the amount of the trade receivables or debts transferred to the factor, within three months of their date.
• Transposition of Directive n°11/22-CEMAC-UEAC-010A-38 of 10 November 2022 on the harmonisation of member states' value-added tax (VAT) legislation. The legislator has transposed the provisions of the new Economic and Monetary Community of Central Africa (CEMAC) directive on VAT into domestic law. The main effects of this transposition are as follows:
  • The application of VAT to services provided in the Congo via e-commerce platforms established in the Congo or abroad, including commissions received by the operators of these platforms.
  • The exclusion of the right to deduct VAT on the purchase of goods distributed free of charge as part of advertising or sales promotion operations.
  • The requirement to regularise VAT deducted on fixed assets that are no longer included in the fixed assets list or have undergone a change in their situation with regard to the right to deduct, either in the event of a change in regulations, loss of taxable status, or a change of use, before the end of the fourth year following the year of acquisition.
  • No adjustment is required for VAT deducted on fixed assets sold before the end of the fourth year following the year of acquisition, provided that such sales were subject to VAT.
  • No requirement to regularise VAT deducted on purchases of goods that have subsequently been accidentally destroyed, scrapped, or stolen.
• Application of the reduced VAT rate to transactions carried out by developers of special economic zones. Sales and acquisitions of goods and services by developers of special economic zones are subject to the reduced VAT rate (5%).
• Deadline for declaring and paying the flat-rate tax on telecommunications company masts. The flat rate tax on telecommunications company masts is paid by 31 March of each year at the latest, by spontaneous declaration and payment by the taxpayer to the collector of the local authority where the mast is located.
• The distribution key for the tax on fund transfer has been amended to introduce a 20% proportion for the remittance certification platform, to be paid to the service provider designated by the funds transfer regulation agency. From now on, all funds transfer agents must connect to this platform.
• Land acquisitions and disposals are subject to the payment of fees corresponding to 1% of the acquisition or disposal price.
• Duties, taxes, fees, and charges in the land transport sector. The Finance Law set the rate of the road safety fee at 10% of duties, taxes, and charges in the land transport sector, without however amending the provision that set this fee at XAF 500/passenger, and creates new duties, taxes, and charges and amends certain provisions.
• Reduction of customs duties and taxes on new private cars and exemption of certificate of conformity. New private cars falling under certain codes are now subject to customs duties and taxes and to VAT at the reduced rate of 5% at the import; the rates of IT fees and community taxes remain unchanged.
• Exclusion of gambling from the scope of the electronic transactions tax. Gambling has been excluded from the operations covered by the electronic transactions tax.
• Introduction of the land freight management tax. The legislator has instituted a land freight management tax, payable by intra- and inter-state freight operators. The amount of this tax is set at XAF 60,000 for national freight operators and XAF 106,000 for interstate freight operators.
• Creation of the Congo commercial real estate infrastructure development zone. The Congo commercial real estate infrastructure development zone aims to promote urban development through the development of state real estate infrastructures, facilitating the operation, upkeep, and maintenance of commercial buildings and related equipment. It includes the construction, rehabilitation, renovation, and completion of commercial real estate infrastructures in the Congo. Congo's commercial real estate infrastructures benefit from a privileged tax and customs regime. A regulatory text will set out the terms and conditions for approval under the tax and customs regime for the Congo's commercial real estate infrastructure development zone.
• Decategorisation of certain everyday consumer goods. Staple goods, such as refined palm oil, frozen meats and edible offal, frozen sea fish, and powdered milk, have been decategorised as basic necessities and are now subject to 5% import duty and exempt from VAT, with the exception of computer fees and community taxes.
• Setting export duties for processed wood products. Customs duties on exports of processed wood products are set as follows:
  • 6% of the current value, which may be updated by regulation in line with market trends, for primary wood products.
  • 3% of the current value, which may be updated by regulation in line with market trends, for secondary wood products.
  • 0% of the free on board (FOB) value for third-process wood products.
• Recovery of storage and custody fees for goods placed in bonded warehouses. Warehousing duties on goods placed in bonded warehouses are assessed and collected by the customs administration, in accordance with the procedures laid down by order of the Minister of Finance.