Business Environment

flag Democratic Republic of Congo Democratic Republic of 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
IFRS Standards are required for all listed companies and companies making a public call for capital. All other companies are permitted, but not required, to use IFRS Standards.
Accounting Regulation Bodies
Organisation for the Harmonisation of Business Law in Africa (OHADA)
Permanent Accounting Council of the Democratic Republic of Congo (CPCC)
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
Companies are required to submit an annual financial statement and tax returns (before April 30th, subject to a penalty of 20% for the first offence and 40% for the second one).
Professional Accountancy Bodies
Permanent Accounting Council of the Democratic Republic of Congo (CPCC)
Certification and Auditing
The financial statements of PLCs must be audited. The appointment of an external auditor is mandatory for all limited companies, but also for limited liability companies that meet two of the following three conditions: annual turnover exceeding FCFA 250,000,000, balance sheet total exceeding FCFA 125,000,000, permanent staff over 50 people.
Accounting News

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Tax Rates

Consumption Taxes

Nature of the Tax
Value-added tax (VAT) - Taxe sur la valeur ajoutée (Local name)
Tax Rate
16% (standard rate)
Reduced Tax Rate
Certain goods and services are exempted from VAT, including certain banking and financial services; education; medical services; charitable and social activities; transactions that are subject to a specific taxation; wheat flour, corn, and cornflour; the domestic sales of animals; the import and sale of inputs for agriculture; supply of secondhand movable property, supplied by persons who used the goods for the purposes of their business when those goods do not have the right to deduct the VAT upon their acquisition; sales and imports made by not-for-profit associations legally constituted when these operations are of a social nature, sporting, cultural, religious, educational or philanthropic purpose; sales and imports of official stamps or stamped papers; importing banknotes, associated costs in the production process of the bank notes equipment serving in the manufacture of monetary signs and their spare parts made exclusively by the Currency Issuing Institute; sales and imports of boats; imports made by airline companies (from 24 July 2021 to 24 July 2023).
Exports of goods and services are zero-rated.
A rate of 8% applies on airline tickets (from 24 July 2021 to 24 July 2023).
Other Consumption Taxes

Some goods are affected by consumption and excise duties, like alcohol, tobacco, carbonated drinks, mineral oils, vehicles, perfumes and cosmetics, plastic and rubber articles, etc.
Several para-fiscal taxes are collected at the time of the import and/or export of goods, including:

  • Administrative fee: 2% of the CIF value
  • Congolese Control Office (OCC) fee: 1.5% of the CIF value, plus various other administrative charges
  • Office de Gestion du Fret Maritime (OGEFREM) fee: 0.58% of the CIF value
  • Funds for the Promotion of Industry (FPI) charge: 2% of the CIF value
  • Cost of inspection from the Bureau of Inspection, Valuation, Assessment, and Control (BIVAC): 1.5% of the free on board (FOB) value.

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Corporate Taxes

Company Tax
30%
Tax Rate For Foreign Companies
The Democratic Republic of the Congo levies taxes on resident companies and individuals on a territorial basis (or source basis) of taxation. Non-resident companies or individuals that carry out an activity in the Democratic Republic of the Congo are taxable on profits they realise through permanent or fixed establishments that are located within the country.
Branches of foreign companies are liable for taxation of deemed distributed profits, hence on profits realised a branch will pay both the 30% corporate tax and a 20% tax based on 50% of the net profits after deduction of the corporate tax.
Capital Gains Taxation
Capital gains are treated as taxable income and are subject to the standard corporate income tax rate.
Main Allowable Deductions and Tax Credits
Deductible expenses include interests on funds borrowed from third parties and invested in the company (unless the borrower is a private limited company and the lender is one of its shareholders), start-up expenses, rental expenses linked to buildings or parts of buildings used in the exercise of the activity, overhead costs from maintenance of furniture and equipment used in the business activity, wages, salaries, bonuses, and allowances of employees and workers used in the operation, as well as benefits in kind if these have been added to remunerations paid, etc.
Charitable donations, bad debts, fines, penalties and taxes are generally not deductible.
Business losses can be carried forward indefinitely, up to 60% of the tax profits made in the tax period prior to applying the deduction of said business losses. The carryback of losses is not allowed.
Other Corporate Taxes
Other taxes include a property tax (payable by the owner of the property or land, exemptions apply), a transfer tax (payable by the purchaser, at a rate of 3% of the building's value for a normal sale), a business tax of 10% based on pension capital (for companies applying a supplementary pension scheme).
In the event of business termination, companies pay a lump-sum amount as follows: CDF 500,000 for large companies; CDF 250,000 for medium-sized companies; CDF 30,000 for small-sized companies.
Rental income tax applies to income from the rental of buildings and land located in the DRC. Rental income is taxed at 22% in the province of Kinshasa; 20% is withheld and paid by the tenant, and the landlord pays the remaining 2%. The 20% tax due from the tenant must be paid within 10 days following the payment of the rent. The balance of 2% of the rental income received during the year is due and payable by the landlord no later than February 1 of the year following the year in which the income was realised.
Social security contributions paid by the employer amount to 13% for the national insurance fund, between 1-3% for the national office for professional training, and 0.2% for the national office of employment.
Other Domestic Resources
Directorate General of Taxation
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  Democratic Republic of Congo Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 52.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 346.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 50.7 47.3 36.6 48.8

Source: Doing Business - Latest available data.

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Individual Taxes

Tax Rate

Personal income tax (IPR, Impôt Professionnel sur les Rémunérations) Progressive rates from 3% to 40% (cannot exceed 30% of the taxable salary)
CDF 0 - 1,944,000 3%
CDF 1,944,0001 - 21,600,000 15%
CDF 21,600,001 - 43,200,000 30%
CDF 43,200,001and above 40%
Sums paid to casual employees 15%
Allowable Deductions and Tax Credits
The employee's share of the National Insurance Fund (INSS) contributions (5%) is deductible. An allowance of 2% per dependant may be deducted: however, it is limited to nine dependants.
30% of basic salary, certain transportation and legal family allowances that are part of fringe benefits are not taxable.
Special Expatriate Tax Regime
Both residents and non-residents are taxable on income sourced in the country.
Where a company hires expatriates, it has to pay an exceptional tax called Impôt Exceptionnel sur la Rémunération des Expatriés (IERE). The tax rate is 25% (12.5% for mining companies in the first ten years of activity).

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of double taxation treaties signed by the Democratic Republic of Congo
Withholding Taxes
Dividends: 10% (mining sector)/20%; Interests: 0% (paid by mining companies for loans borrowed in foreign currency abroad)/20%; Royalties: 20%.

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Intellectual Property

National Organisations
Directorate of Industrial Property, Secretariat for industry and small and medium enterprises (IPMEA) - Ministry of Industry and SMEs
Regional Organisations
n/a
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Agreement Revising the Bangui Agreement of March 2, 1977, on the Creation of an African Intellectual Property Organization, February 24, 1999
20 years
Design
 
Agreement Revising the Bangui Agreement of March 2, 1977, on the Creation of an African Intellectual Property Organization, February 24, 1999
5 years, renewable for two further 5-year periods  

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Legal Framework

Independence of Justice
The Constitution ensures the independence of the judiciary, it is still widely influenced by political leaders. It is reported that civilian cases are sometimes tried in military courts, which are subject to interference from high-ranking military personnel. Arbitrary arrests and detentions are also common.
Ethnic discrimination is still a significant problem in some parts of the country (especially against the Kinyarwanda-speaking minority).
Equal Treatment of Nationals and Foreigners
Corruption is widespread in the country and foreigners cannot expect an equal treatment.
The Language of Justice
The judicial language used in the country is French.
Recourse to an Interpreter
It is possible to have access to an interpreter in the DRC.
Sources of the Law and Legal Similarities
The DRC is a civil law country whose legal system is largely derived from the French and Belgian ones. The main sources of the law are the Constitution, regularly signed and ratified international treaties, acts of parliament (ordinary laws and decrees; "loi organique" or "loi ordinaire"), ordinances, decrees.
Checking National Laws Online
Library of the US Congress website

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Standards

National Standards Organisations
Office Congolais de Contrôle (OCC)
Integration in the International Standards Network
OCC is a member of the International Organisation for Standardisation (ISO). - https://www.iso.org/member/308894.html
Classification of Standards
COD
Online Consultation of Standards
ISO website - DRC standards consultation
Certification Organisations
Office Congolais de Contrôle (OCC)

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Business Practices

General Information
Opening Hours and Days
Offices: Monday through Friday, 7:30am to 3pm, Saturday 7:30am to 12pm.
Banks: Monday through Friday, 8am to 11:30pm.
Government: Monday through Friday, 8am to 5pm (with a one or two-hour break).
Retail: Monday through Saturday, 8am to 6pm.
 

Public Holidays

New Year’s Day January 1
Day of the Martyrs January 4
National Heroes’ Days January 16 and 17
Labor Day May 1
Liberation Day May 17
Independence Day June 30
 
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: November 2022