Congo: Business Environment

Company Tax

28%

Tax Rate For Foreign Companies

Resident companies are taxed on their worldwide income, while non-resident companies are assessed only on profits earned or transactions carried out in Congo.
Non-resident companies with a temporary authorisation to operate (ATE) are subject to a rate of 7.26% of turnover. Services rendered by foreign companies that qualify for this simplified tax regime are taxed at a rate of 33% 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).
70% of the net profits made by branch offices and foreign companies carrying out business are automatically considered as distributed profits and subject to tax on dividends at the rate of 15%.

Capital Gains Taxation

Capital gains are treated as ordinary business income and are taxed at the standard corporate income tax rate (28%). Capital gains realised on the disposal of a fixed asset in the course of trading are excluded from income for a period of three years, provided the taxpayer reinvests the gain in new fixed assets for the business.
Gains realised by non-residents on transfers of shares of Congolese companies are taxed at a 20% rate.
Capital gains realised on the sale of rights and obligations related to oil contracts are taxed at 10%.

Main Allowable Deductions and Tax Credits

Generally, expenditures incurred to obtain, collect, and maintain business turnover are tax-deductible when documented.
All types of fixed assets (with the exception of land) are depreciable for tax purposes when acquired for business purposes (the straight-line method applies). Goods costing less than XAF 500,000 per item may be written-off at purchase as expenses.
Start-up expenses can be amortised in one or two years. Interests are deductible up to a limit of 5.25%.
Donations and gifts made to beneficiaries in the Republic of Congo are deductible according to certain limits: 0.5‰ (general limit); 0.5% (for donations to sport activities); 50% (charitable contributions in case of natural or accidental disaster); 100% (donations made to fight the COVID-19 epidemic). Taxes are usually deductible (except for income taxes), fines and penalties are not.
Losses can be carried forward for three fiscal years, carryback losses are not permissible.

Other Corporate Taxes

Royalties apply to the energy sector: 0.75% on turnover for self-producers; 1% on turnover for independent producers; up to XAF 400 per cubic metre of water withdrawn for the hydraulic sector. Delayed payments are subject to a 10% penalty, in case of omissions the penalty is equal to 100% of the fee.
All legal entities that carry out a commercial or industrial activity, or any other activity not included in the statutory exemptions are subject to a business tax (also known as "patente"). The business tax is payable on the basis of graduated rates that range from XAF 10,000 (turnover below XAF 1 million) to 0.045% (turnover above XAF 20 billion). Newly registered companies are taxed based on the forecast turnover which they declare.
A land tax is payable annually on built properties (with a three to ten years exemption for residential buildings and five years for commercial buildings). A similar tax applies on unbuilt properties (with exemptions from three to ten years for lands intended for plantations and breeding). In both cases, the rates are determined every year by the local council.
A rent tax is levied at the rate of 1/12 of the annual rent (with a 50% fine for late payments).
Social security contributions paid by the employer are as follows: 10.035% of gross salary for family allowance (capped at XAF 7.2 million/year); 2.25% for work accident contribution (capped at XAF 7.2 million/year); 8% for old age, invalidity, and death insurance (capped at XAF 14.4 million/year).

Other Domestic Resources

Directorate-General for Taxation

Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

When calculating the taxable income from employment, social security contributions are deductible, as well as a standard deduction of 20% of the salary (after contributions).
Other deductions include alimony payments; interests on loans for the first residence (maximum six years, up to XAF 1 million per year); healthcare expenses (up to 10% of net income, capped at XAF 200,000); annuities.
An income splitting system applies, meaning the total taxable income of the family group is divided into a number of units, and the tax applicable to a single unit is multiplied by the total number of units to give the total amount of tax payable.

Special Expatriate Tax Regime

An individual domiciled in the Republic of Congo, regardless of nationality, is liable for personal income tax on his/her worldwide income. If an individual is not resident, he/she is only liable for incomes generated in Congo. Furthermore, a tax rate of 20% is imposed on the non-commercial income of a non-domiciled individual and on salaries for duties performed in the Republic of Congo by foreign employees seconded to work in the country for limited periods.