Congo, Republic of
The taxable period is the calendar year.
Companies subject to the actual tax regime are required to file their tax returns and pay their taxes and duties online. Failure to comply with this obligation is subject to a penalty equal to 10% of the amount to be declared.
Taxes, duties, fees, levies and customs duties shall be paid at the one-stop shop regardless of tax residence. The modalities of organisation and operation of the one-stop shop shall be determined by regulation.
The payment of taxes, duties, fees and customs duties shall be made, for localities that do not have a one-stop shop, according to the common law procedure.
The annual CIT return is a specific form (Déclaration Statistique et Fiscale or DSF) that should be prepared in accordance with OHADA accounting principles. The form cannot be completed electronically.
Companies have to use the CEMAC CIT return form, which has been modified to be compliant with Congolese tax law (new form for the determination of the CIT basis and new tax balances for debts and liabilities).
The books must be maintained in French and in CFA francs. This accounting system must follow the OHADA chart of accounts. All entries have to be booked under OHADA standards throughout the year.
The annual CIT return must be filed on 20 May at the latest (Due to COVID-19, the annual CIT return related to FY 2019 can be filed on 25 August at the latest).
Payment of tax and penalties
Resident companies are required to pay quarterly instalments of tax (20 February, 20 May, 20 August, and 20 November), and these quarterly instalments are generally calculated with reference to the most recent CIT return. Special calculations of instalments apply to new taxpayers.
Based on the self-assessment system, when submitting annual tax returns due by 20 May every year, taxpayers must pay the amount of tax calculated in the annual tax return to the extent this amount exceeds tax instalments paid during the year.
Non-resident companies and individuals shall appoint tax representatives in the Republic of Congo. The Congolese resident shall be considered as tax representative if the non-resident person fails to appoint a tax representative.
Penalties, surcharges and interest for late payment claimed by the tax authorities shall be paid separately from the relevant principal duties via bank transfer or bank cheques.
Payment of penalties, surcharges and interest for late payment shall be made in cash for amounts less than XAF 5,000,000 into the current account of the Public Treasury.
Tax audit process
Tax audits are usually announced by a letter from the tax authorities to the entity concerned of their intention to audit, while stating the period to be audited and the taxes that will be covered by the audit.
During an audit of accounts or tax review, taxpayers shall within 8 days from receipt of a request list from the tax auditors make available all requested information.
Taxpayers whose annual turnover, excluding taxes, exceeds FCFA 100 million, shall, from the first day of a general audit, share all internal and external audit reports with the tax auditors. The tax auditors may request any internal or external audit report relating to periods not covered by the accounting audit.
The tax authorities may organise meetings with the taxpayer to inform the taxpayer of the preliminary outcomes of the audit, and the taxpayer has the possibility to make counter remarks.
Thereafter, the tax authorities notify the taxpayer, in writing, of their proposed tax adjustments, and the taxpayer makes counter remarks in writing within 30 days from date of receipt of the tax adjustment notice.
Based on whether the tax authorities find the counter remarks from the taxpayer grounded or not, a letter confirming the tax adjustments or renouncing the proposed tax adjustments shall be sent to the taxpayer, who has the choice to either pay the taxes claimed, negotiate for a reduction of fines, or open up a tax litigation process.
The taxpayer may negotiate the taxes, fines, and the mode of payment of the tax claimed by the tax authorities thereby renouncing one’s right to open up tax litigation.
The taxpayer has the right to request from the Director General of Taxation and Real Estate a transactional mode of payment of fines or payment of tax by friendly settlement. If the taxpayer opts for the transaction, the taxpayer loses the right to object to the outcome of the transaction and is obligated to immediately pay the taxes due (principal and penalties) according to the agreement.
To open up a tax litigation process, the taxpayer will pay a prior deposit of 10% of the sum contested as guarantee (or a banking guarantee as security for litigation) and 5‰ (5 per thousand) of the sum contested for the treatment of the tax claim file and will submit the tax claim file to the Tax Head Office if the amount of the claim exceed XAF 30 million and to the Director of Tax Department if the amount claimed is less than XAF 30 million.
When the amounts challenged by a taxpayer, in the context of a contentious claim, exceed XAF 500 million, the said taxpayer must file a copy of one’s claim with the Minister in charge of Finance.
The tax authorities will respond to the tax counter claim of the taxpayer, who, if not satisfied, could open a court claim.
Statute of limitations
Generally, the statute of limitations period for CIT is four years following the year in which the tax was due. However, this rule does not apply in the case of fraudulent acts reported by the tax administration.
Topics of focus for tax authorities
The tax authorities particularly focus on aspects such as:
- Compliance of deductible expenses.
- CIT compliance.