Congo, Republic of

Congolese-registered companies are taxed on the territoriality principle. As a result, Congolese companies engaged in business outside of the Republic of Congo are not taxed in the Republic of Congo on the related profits.

In the absence of a tax treaty stating otherwise, a non-resident company is liable for corporate income tax (CIT) on income realised in the Republic of Congo or derived from or resulting from work/services of any nature supplied or used in the Republic of Congo.

The standard CIT rate in the Republic of Congo is 28%, with certain exceptions.

A withholding tax (WHT) of 5%, 5.75%, 10%, or 20% is imposed on income sourced in the Republic of Congo that is derived by foreign companies not necessarily engaged in activities in the Republic of Congo (see the Withholding taxes section for more information).

Minimum tax

The minimum tax payable is 1% of the annual turnover and cannot be less than XAF 1 million (XAF 500,000 if annual turnover is less than XAF 10 million).

The 1% rate is applied to the sum of gross turnovers, products, and benefits realised by the company in the most recent year in which it earned a profit. The 1% tax is not deductible for CIT purposes. However, in a company's first profit-making year after incurring the losses, half of the 1% tax is deductible.

The minimum tax is 1% of the taxable base, with a minimum amount payable of XAF 1 million, for companies that are totally exempt from CIT during the extension of their Convention of Establishment and/or any specific agreement.

The minimum tax is levied at a rate of 2% for taxpayers whose income has remained in deficit for two consecutive years. The minimum tax must now be paid between 10 March and 20 March of each year.

Industry specific rates

Companies in the following sectors are exempt from CIT:

• Agriculture.
• Agro pastoral.
• Poultry or fishing.

A CIT rate of 25% applies for microfinance companies and private schools organised as a company.

A CIT rate of 28% applies for mining companies and real estate companies.

A CIT rate of 33% is applied on a deemed profit equal to 22% of the total gross remuneration (i.e. an effective tax rate of 7.26% of the taxable turnover made in the Republic of Congo) derived from services rendered by:

• Foreign companies that qualify for this simplified tax regime.
• Local companies and branches that realise more than 70% of their annual turnover with oil companies and oil services companies (in this case, the deemed profit tax is regarded as a final burden).
• Catering activities performed or delivered on petroleum sites.

Note that these companies revert to the general taxation regime the second year after the turnover realised with oil and gas sector companies becomes less than 70% of their annual turnover.

A substantiated request shall be made to the Director General of Taxation between 10 October and 20 October of the second year, who shall reply, at the latest, by 15 December of the same year.

Headquarters operations of foreign companies

The headquarters operations of foreign enterprises taxation regime is subject to prior approval by the tax authorities.

If enacted, headquarters operations of foreign enterprises and international groups will be granted a favourable tax status in the Republic of Congo. For those that qualify, CIT is charged on a deemed profit equivalent to a prescribed percentage of headquarters expenses, the percentage of which is currently unknown.

To qualify, the headquarters must be registered under the form of a public limited company or branch and must act solely for the benefit of the group in the area of management, control, or coordination.

Global flat taxation

The global flat tax is at 5% (of the annual turnover) or 8% (of the annual margin) and applies in lieu of the standard CIT rate. It is calculated on the annual turnover of enterprises taxable under the flat rate regime, whose turnover does not exceed XAF 100 million.

Local income taxes

See Business tax in the Other taxes section.