Business Environment

flag Congo Congo: Business Environment

In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
The tax year is the calendar year.
Accounting Standards
The Organization for the Harmonization of Business Law in Africa released a Uniform Act on Accounting and Financial Information (AUDCIF), which came into effect on January 1, 2018 for individual accounts and on January 1, 2019 for consolidated accounts, combined accounts, and financial statements prepared in accordance with IFRS.
As of 1 January 2019, IFRS Standards are required in the consolidated financial statements of all listed companies and companies making a public call for capital. Companies with more than 100 shareholders are required to use IFRS Standards, even if their securities do not trade in a public market.
All SMEs are required either to follow the SYSCOHADA system or to use full IFRS Standards.
Accounting Regulation Bodies
National Association of Accountants of Congo - (Ordre national des experts comptables du Congo - ONECC)
Accounting Reports
According to art. 8 of the Accounting Act of the Organisation for the Harmonization of Corporate Law in Africa (OHADA), companies must publish a balance sheet, a profit and loss account, a statement of cash flows and notes to the financial statements. All listed companies and companies making a public call for capital must use IFRS standards for their financial statements.
Publication Requirements
Annual financial statements include the Balance Sheet, the Income Statement, and Cash Flows statement, as well as the Notes to the financial statements. According to art. 23 of the OHADA's Uniform Act on the organization and harmonization of corporate accounting, annual financial statements shall be adopted no later than within four months following the closing of the fiscal year.
Professional Accountancy Bodies
National Association of Accountants of Congo - (Ordre national des experts comptables du Congo - ONECC)
Certification and Auditing
According to art. 8 of the Uniform Act on Commercial Companies of the Organisation for the Harmonization of Corporate Law in Africa (OHADA), private limited companies that meet, at the end of the fiscal year, two of following conditions are required to appoint at least one auditor: the total amount of the balance sheet is greater than XAF 125 million; the annual turnover is greater than XAF 250 million; the number of permanent staff exceeds fifty people. For private limited companies that do not meet these criteria, the appointment of an auditor is optional. Nevertheless, such an appointment maybe requested in court by one or more members holding at least one-tenth of the stated capital.
In public limited companies, supervision is exercised by one or more auditors.
Accounting News

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Tax Rates

Consumption Taxes

Nature of the Tax
Value added tax (VAT) - Taxe sur la valeur ajoutée (TVA)
Tax Rate
18% (effective rate of 18.9% with a 5% surcharge that applies to VAT on certain consumer goods)
Reduced Tax Rate
Imports and locally produced cement, glass products, diesel and lubricants imported from Cameroon by forestry companies, butane gas, and certain everyday consumer goods (such as sugar, sugar, tomato, soap, oil, etc.) are subject to a reduced tax rate of 5%. Exports, international transportations and local sales of timber are zero-rated.
Certain goods are exempt from VAT (for instance supply of products arising from extractive activities; banking and insurance operations; certain necessity goods like pharmaceutical products, rice, salt, bread, meat and poultry, corrective glasses, schoolbooks, fertilizers, etc.; transfer/sale of a business). Imports of agricultural, horticultural, forestry, or fishery equipment and machinery, fertilizers and other agricultural inputs, are exempt from VAT and customs duties.
Other Consumption Taxes
The rates of excise duty are as follows:

- Tobacco: 16.5%
- Alcoholic beverages: 12.5%
- Luxury food products, perfumes and cosmetics, arms and ammunition, jewellery: 25%
- Motor vehicles and motorcycles: 15%
- Gaming and entertainment equipment: 25%.

Import duties are applied according to the CEMAC legislation, with rates ranging from 5% to 30%.
Several other taxes and fee apply on imports such as:
CEMAC integration tax: 1% on CIF value
African integration contribution: 0.2% on CIF value
statistic tax: 0.2% on CIF value
OHADA contribution: 0.05% on CIF value
CEEAC contribution: 0.04% on CIF value
computer royalty: from 0.5% to 2% on CIF value.

A tax on company-owned cars applies with a rate of XAF 200,000 (for engine ratings not over nine horsepower) or XAF 500,000 (all other cars).

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Corporate Taxes

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.
 

Country Comparison For Corporate Taxation

  Congo Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 50.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 602.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 54.3 47.3 36.6 48.8

Source: Doing Business - Latest available data.

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Individual Taxes

Tax Rate

Personal Income Tax Progressive rates from 1% to 40%
From XAF 0 to XAF 464,000 1%
From XAF 464,000 to XAF 1 million 10%
From XAF 1 million to XAF 3 million 25%
Above XAF 3 million 40%
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.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
List of double taxation treaties signed by the Republic of the Congo
Withholding Taxes
Dividends: 15%; Interest: 0 (resident) / 20% (non-resident); Royalties: 0 (resident) / 20% (non-resident)

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Intellectual Property

National Organisations
National Industrial Property Unit (Ministry of Economy, Industry and Public Portfolio - ANPI)
Regional Organisations
The Republic of Congo is a member of WIPO and of the African Intellectual Property Organization (OAPI).

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Legal Framework

Independence of Justice
Although the constitution and law provide for an independent judiciary, political influence and corruption are still widespread. The constitution also provides for the right to a fair trial presided over by an independent judiciary, but it has been reported that authorities do not always respect such right. Furthermore, the judiciary is overburdened and poorly organized. According to Freedom House, defendants, including the government’s political opponents, are routinely denied due process, and arbitrary arrests and detentions are common. The constitution prohibits torture and inhuman or degrading treatment of detainees, however such provisions are frequently not respected.
Equal Treatment of Nationals and Foreigners
Foreigners cannot always expect an equal treatment.
The Language of Justice
French
Recourse to an Interpreter
Defendants have the right to be informed promptly and in detail of the charges, with free interpretation if necessary.
Sources of the Law and Legal Similarities
The legal system of the Republic of the Congo is based on French civil law and Congolese customary laws.
The formal sources of law in the Congo are the Constitution, legislation (ordinary and organic laws), international law, customary laws, judicial precedents, and publications by academic scholars.
Checking National Laws Online
Library of the U.S. Congress
Droit Afrique - Congo

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Standards

National Standards Organisations
Congolese Agency for Standardization and Quality (Agence Congolaise de Normalisation et de la Qualité)
Integration in the International Standards Network
The Republic of the Congo does not have a legal framework for standards and technical regulations and is not a member of ISO.
Classification of Standards
COG
Online Consultation of Standards
ISO website - Republic of the Congo standards consultation
Certification Organisations
Congolese Agency for Standardization and Quality (Agence Congolaise de Normalisation et de la Qualité)

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Business Practices

General Information
Opening Hours and Days
Public sector: 7.30am-3.30pm (with a thirty-minute lunch break)
Private companies: 7:30am-4pm (with a thirty-minute lunch break)
 

Public Holidays

1 Jan New Year's Day
02 Apr  Easter Monday
1 May Labour Day
10 May Ascension Day
21 May Whit Monday
10 Jun Reconciliation Day
15 Aug National Day
01 Nov All Saints' Day
28 Nov Republic Day
25 Dec Christmas Day
 
Holiday Compensation
Not applicable.
 

Periods When Companies Usually Close

Closure for Easter End of March/Early April
 
Closure for Christmas End of December
 

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Latest Update: October 2022