Congo (Rep): Finance Law 2015 (part II) – Corporate income tax

Congo (Rep.)

Report from Anapaula Trindade Marinho, IBFD Research Associate

Finance Law 2015 (part II) – Corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The...

The provisions of Finance Law 2015 (Law No. 48-2014 of 31 December 2014) have been made available to the public. Finance Law 2015 (the Law) introduces further tax amendments in addition to those reported on the Finance Bill (see Congo (Rep.)-1, News 24 October 2014 and Congo (Rep.)-1, News 27 January 2015). The amendments on corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The..., which apply as from 1 January 2015, are summarized below.

Withholding taxes

The withholding tax rates provided by both the African and Malagasy Common Organization (Organization Commune Africaine et Malgache, OCAM) Convention and the France – United States Tax TreatyA Double Taxation Agreement (DTA), also known as a Double Taxation Treaty (or a Tax Treaty), is an international tax treaty between two or more countries that aims to prevent individuals or businesses from being taxed twice on the same income. With globalisation and the increase in cross-border economic activities, DTAs have become essential tools for promoting trade, investment, and..., which were extended and applicable in Congo, cease to apply.

Consequently, the applicable withholding tax rate is at 5.75{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e} on:

Regime of taxation

The derogation regime provided for oil companies must cease to apply as soon as the turnover derived from oil activities is below 70{780f53c297e2c008074d23b865a0ce0b35a4f08852d8e1e49466a5a902c4e44e}. In such a case, oil companies will be subject to corporate income taxCorporate Tax refers to the tax imposed by governments on the income or capital of corporations. Corporations, considered separate legal entities, are taxed on their profits, meaning the income generated from their operational activities, investments, and other financial undertakings. This tax is generally a key revenue source for governments, helping to fund public services, infrastructure, and other essential functions. The... under the regular regime. The Law provides a detailed definition of what is considered “turnover derived from oil activities” for assessment purposes.

Administration

(a) Tax returnsA Tax Return is a formal statement filed by an individual or entity that details income, expenses, and other pertinent tax information to a tax authority. Its primary purpose is to assess tax liability, determine refunds owed, or highlight outstanding taxes due. Tax returns may include information about earnings, capital gains, allowable deductions, and credits, depending on the tax regulations... and assessment

Companies taxed under the presumptive regime must declare, at the latest on the 20th of every month, the amount of income derived in Congo during the previous month. The declaration is mandatory, regardless of whether invoices were issued.

In addition, the Law introduces a mandatory declaration to oil operators, who must provide to the Directorate General of the tax administrationTax authorities are fundamental institutions within government frameworks, overseeing tax assessment, collection, and administration. Their operations ensure that tax laws are enforced and public funds are collected efficiently. This article delves into tax authorities' purpose, responsibilities, and structure, offering insights into their essential role in supporting government functions and economic stability. What is a Tax Authority? A tax authority is... an exhaustive list of the oil subcontractors. According to the new provisions, this concerns each oil subcontractor developing a business relationship with oil operators. The list must contain, inter alia, the subcontractor’s address and national identification number, the amount of the contract, the currency used for the transaction, invoice details and the oil licence’s reference.

(b) Payment of tax

Companies providing to the treasury bank guarantees or bank cheques signed by a bank or a financial institution sited in Congo, or sited within the Central African Economic and Monetary Community (CEMAC), can benefit from a deferral of payment of the remaining amount of tax to be paid. The granting of the deferral is exceptional and made under previous request.