Overview
VAT was established in the Democratic Republic of the Congo by Ordinance Law no. 10-10 on 20 August 2010 and Decree no. 11-42 of 22 November 2011, which included implementing procedures.
According to the law, electronic services supplied online include the supply and hosting of computer sites, the online supply and updating of software, the supply of images, text, and information, the provision of databases, the supply of music, films, and games, the supply of digitised books and publications, the supply of distance learning services, and the remote maintenance of programs and equipment.
Foreign providers must appoint a tax representative in the Democratic Republic of the Congo; otherwise, VAT is collected and paid by the service consumer based in the DRC. To this end, the reverse charge mechanism is available to service consumers to automatically deduct the VAT declared on behalf of foreign service providers.
The law makes no distinction in applying legal provisions concerning services to individual consumers (B2C) or businesses (B2B). It is, therefore, difficult for the tax authorities to collect the VAT triggered on B2C transactions between foreign suppliers and local consumers that are not subject to VAT since they will not declare on behalf of foreign service providers who do not have tax representatives in DRC.
All foreign suppliers have the option of appointing a fiscal representative in the DRC, who will be able to collect VAT on invoices from local customers (registered for VAT purpose) and remit it to the public treasury. If they do not have a fiscal representative, it is the local customer who must declare the VAT on behalf of the foreign supplier.
Release date: April 2024
Key provisions applicable to VAT on ESS |
Services in scope |
According to the law, electronic services supplied online include:
|
Registration and compliance |
| Non-resident suppliers with no permanent establishment in the DRC are not required to register for VAT in the DRC. Instead, they are required to appoint a tax representative resident in the DRC. The representative must be designated by means of a legalised or notarised letter addressed to the tax authorities, which the tax authorities will then approve. If no fiscal representative is appointed, VAT will be collected by the local customer or consumer. |
Invoicing |
| Non-resident suppliers must issue an invoice that allows the local customer to justify the expenditure. The invoice must contain certain information in order to identify the type of services rendered as well as the supplier and amount details. Otherwise, the deductibility of the item may be called into doubt by the tax authority. |
VAT on costs |
| Foreign companies charged with VAT on goods or services consumed in the DRC cannot reclaim this VAT. |
Other considerations |
Non-resident suppliers are required to pay a 14% tax on income earned in the DRC. The service consumer must withhold this tax at the time of payment of the bill. The amount must be declared and paid to the tax administration by the 15th day of the month following the payment. |
Particulars |
Description |
Scope |
Non-residents supplying electronic services to DRC individuals (B2C) or businesses (B2B) |
Liability to remit VAT |
A non-resident without a permanent establishment in DRC providing electronic services to DRC resident customers (B2B or B2C) is required to appoint a tax representative to comply with VAT regulations. If no tax representative is appointed, a reverse charge mechanism applies, whereby the local customer must declare the VAT on behalf of the foreign supplier and deduct it. |
VAT rate |
16% |
Taxable value |
The price payable by the recipient of the supply |
Effective date |
20 August 2010 |
VAT registration threshold |
CDF80,000,000 (circa USD30,769) However, companies that have not reached this threshold may have an option to register. This threshold does not apply to foreign service providers. |
Tax invoice |
The non-resident supplier must issue an invoice that allows the local customer to justify the expenditure. Otherwise, the tax authority may call into doubt the deductibility of the item. |
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