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Congo, The Democratic Republic of the: New Tax Measures Adopted

(Jan. 31, 2013) The Democratic Republic of the Congo (DRC) has adopted an array of changes to its tax regime through ordinances issued by the President. While for the most part the changes became effective on January 1, 2013, some of the changes came into force as of October 18, 2012. One of the amendments effective in October is a change to the law covering tax procedures, lowering the rate of interest due on late tax payments from 10% to 4% a month. (Alexis Ribeiro Reis & Albert <?Atangana, Congo (Dem. Rep.): New Tax Measure Enacted, TAX NEWS SERVICE (Jan. 17, 2013), International Bureau of Fiscal Documentation online subscription database.)

Direct Taxation

The changes to the direct taxation rules include:

  • decreasing the standard business tax rate to 35% from 40%;
  • introducing a 14% withholding tax on payments for services within the DRC given to or used by non-residents who lack permanent offices in the country;
  • using the same definition to determine if a non-resident individual has a permanent establishment as is now used to determine if a business has a permanent establishment in the country;
  • amending the rates for the tax on income from employment, which now ranges from 15% for incomes of CDF524,161-CDF1,428,000 to 40% for incomes over CDF22,956,000 (about US$24,000) (those earning less than CDF524,161 do not owe income tax); and
  • introducing a new plan for taxation of the business income of micro- and small-sized companies, as follows:
    • for companies with an annual turnover of CDF80 million (about US$88,400) or less (considered to be small businesses under their system), the rate is 1% on income from sales of goods and 2% on income from services (however, such companies may permanently opt to be subject to the standard business income tax rate, as long as they decide to do so by February 1, 2013);
    • for companies with an annual turnover of CDF10 million or less (considered to be micro-sized businesses under their system), the tax is a lump sum of CDF50,000 (about US$55). (Id.)

Indirect Taxation (changes effective Oct. 18, 2012)

The threshold for required registration for value-added tax (VAT) has been increased from CDF50 million to CDF80 million. In addition, it is now possible for individuals and companies with an annual turnover lower than the new threshold to decide to be subject to the VAT. (Id.)

Other indirect taxes affected by the recent ordinances include new customs tariffs on imports and exports and a code of excise duties. (Id.)

Mining Tax

The rates for mining fees, taxes, royalties and fines have been revised. (Id.)