Democratic Republic of Congo Income Tax
Democratic Republic of Congo income tax rates are progressive between 3% – 50%.
Taxable Income (CDF) / Tax Rate %
CDF 0 – 72,000 3%
CDF 72,001 – 126,000 5%
CDF 126,001 – 208,800 10%
CDF 208,801 – 330,000 15%
CDF 330,001 – 498,000 20%
CDF 498,001 – 788,400 25%
CDF 788,401 – 1,200,000 30%
CDF 1,200,001 – 1,686,000 35%
CDF 1,686,001 – 2,091,600 40%
CDF 2,091,601 – 2,331,600 45%
Above CDF 2,331,600 50%
L’Impôt Professionnel sur les Rémunérations (IPR) is calculated from employee remuneration (salaries, fees, allowances which represent not the reimbursement of actual, professional expenditure gratuities, bonuses, pensions of any kind), the IPR is only tax on paid compensation deference by the company for the account of employee.
Impôt Exceptionnel sur les Rémunérations (IER): It is a tax paid exceptionally on compensation of expatriate staff. It is only to the burden of the company and not to the recipient.
Democratic Republic of Congo Corporate Tax
Democratic Republic of Congo corporate tax (L’impôt sur les revenus professionnels – IRP) rate is 40%. The recovery of profits and profits tax is done by way of instalments or withholding tax. The balance is regularized once the tax year is closed.
Withholding taxes – Dividends: 20% (10% in the mining sector)
Withholding taxes – Interests: 20% (0% in the mining sector)
Withholding taxes – Royalties: 14%
Social Security Contributions: 5%
Congolese Property Tax: Property tax rate in Democratic Republic of Congo (DRC) is fixed depending on the nature of good and the rank of the locality. The villas are taxable per square metre (SQM) area. Other buildings and grounds are taxable ordered.
Rental Income Tax (L’impôt sur le revenu locatifs – IRL): Rental income tax concerns income from rental of buildings and land located in the DRC. Rental income is taxed at the standard rate of 22%.
Congolese Tax System: Like all tax systems, the Congolese tax system is characterised by the multiplicity of taxes notably:
– direct taxes on revenue;
– indirect taxes on spending; and
– taxes on capital.
Due to the regulatory effect of taxes in relation to the present state of the economy, taxation can be either spontaneous or organised by the authorities. For example, progressive taxes on revenue for immediate payment. Such a tax, at a time when revenue is increasing, always levies a bigger part of revenue, thus limiting the possibilities for saving and investment.
Structural tax policies can work in encouraging or discouraging certain types of businesses. To encourage certain business people to transfer their activity to new areas for development, the State generally grants aid in two forms.
– Positive form: through subsidies and very low interest loans.
– Negative form: through exemptions or reductions in tax payments.
The Congolese State can also protect national industry by raising the tariffs on the rights of entry on foreign products in competition with similarly made products made in the country, thus practicing interventionism.
Mining Taxes in Democratic Republic of Congo (DRC)
Mining Royalty: A mining royalty is owed as from the date of commencement of effective exploitation. The mining royalty is calculated on the value of sales realised, less transport costs and less assay, insurance and marketing costs. The rate of the mining royalty is 0.5% for iron or ferrous metals, 2% for non-ferrous metals and 2.5% for precious metals.
Profit Based Tax – Professional Tax on Benefits: A professional tax on benefits at the preferential Mining Code rate of 30% (instead of the 40% corporate tax rate) is levied on the net profits from exploitation determined in accordance with the accounting and tax legislation
Withholding Tax on Interest and Dividends: The 20% standard rate of the withholding tax is not applied to interest paid on loans contracted abroad in foreign currency. In addition, loans from affiliates must be on interest rates and other conditions as favourable or better than loans that would be obtained from third parties to benefit from this exemption.
Dividends and other distributions are subject to the preferential Mining Code withholding tax at the rate of 10%.
Withholding Tax on Salaries: The holder is liable to pay the standard withholding tax on salaries payable to the employees.
Exceptional Tax on Expatriates’ Salaries: The holder is liable to pay the exceptional tax on expatriates’ salaries at the preferential Mining Code rate of 10%, instead of the 25% standard rate.
Annual Traffic Tax: The holder of a mining right is liable to pay the annual traffic tax pursuant to the general tax legislation except for those vehicles used exclusively within the mining perimeter.
Democratic Republic of Congo Sales Tax (ICA) Rate
The standard rate of Sales Tax (ICA) in Democratic Republic of Congo is 13.0%. The tax rate is 3% for products taxed between 5% and 15% by Customs.