Democratic Republic of the Congo

Rates and scope

The standard rate of 16% applies to all taxable operations (except for exportation, which is zero-rated).

VAT applies to:

• Delivery/sale of goods

• Services

• Self-assessed transactions

• Imports

A new VAT rate of 8% applies to basic necessities which are notably the following:

• Frozen chard
• Salted fish 
• Meat of bovine animals, fresh or chilled 
• Husked rice
• Other milk powder
• Packaged waters for the table
• Iodized salt
• Soap for ordinary use
• Matches
• Fresh and frozen meats
• Various fish
• Dried and salted cod
• Rice
• Sugars. 

As a general rule, VAT is levied on economic activity carried out for a consideration by a taxable person.

VAT is levied whenever the transaction is carried out in the DRC regardless of the residence status of the parties to the transactions.

VAT registration

Compulsory registration

Both legal entities (in the private and public sectors) as well as individuals can be considered liable for VAT if they carry out taxable operations within the scope of VAT, independently and habitually, and the operations consist of economic activity for valuable consideration.

Apart from the general principle of liability, liability to account for VAT is compulsory when annual turnover equals or exceeds CDF80,000,000 (EUR43.502) for all activities.

However, legal entities and individuals whose annual turnover is below the threshold for liability to VAT may opt for the VAT system.

Furthermore, the Finance Law n°18/025 dated 13 December 2018 relating to fiscal year 2019 provides that VAT payers are now identified by a VAT number. An order issued by the Minister of Finance will specify the conditions for granting the VAT number.

This number will be different from the tax number granted to companies at the start of their business.

An operation consisting of imports, delivery of goods or the provision of services which forms part of an economic activity for consideration by a taxpayer is taxable if it is carried out for valuable consideration by individuals or entities.

The performance of an operation for a consideration implies that the acquirer of the goods or the beneficiary of the services provides consideration regardless of its nature (money, goods, services, etc.) and value.

In this respect, it is irrelevant whether the operation is carried out for profit or speculatively, or whether it results in a profit or loss. Thus, the delivery of goods or the provision of services is liable to VAT even if such activity is undertaken at a loss.

Voluntary registration

Group registration

Non-residents

Non-resident businesses are required to appoint a solvent resident as tax representative in order to register for VAT in the DRC.

Indeed, as for services rendered in DRC, a non-resident having no permanent establishment in DRC but who raises an invoice on a DRC resident is required to appoint a VAT representative who is based in the DRC and who will be accountable for the payments and collections that rest with the supplier non-resident.

Failing to appoint a representative will result in the authorities holding the DRC resident customer liable for the payment of VAT due by application of a reverse charge mechanism.

The resident tax representative could be subject to the penalties specified in matters where operations performed by the service provider are in its favour.

Application for registration

New taxpayers (exempted or not) undertaking a commercial activity in the DRC are required to apply for a tax number (NIF) within 15 days of the beginning of activities. The tax number must be mentioned on all documents issued by the taxpayers (letters addressed to the tax administration, invoices, receipts and other documents related thereto).

Failure to obtain a tax number within the prescribed time limits is punishable by a fine. Furthermore, a tax number will be automatically assigned to any defaulting taxpayer discovered by the tax administration in the performance of its duties.

Deregistration

All changes relating to the identity, management, physical or electronic address, telephone number or affecting or terminating a taxable item or operation will be reported to the tax administration within fifteen days of the occurrence of the event.

Therefore, all taxpayers must inform the tax administration about the termination of their business. As there is no standard form, this declaration must be made on plain paper by the taxpayer.

Output tax

Calculation of output tax

The amount of VAT is determined by applying the rates to the net selling price of goods and/ or services, excluding the VAT itself. In practice, suppliers of goods and services show prices excluding VAT and will add VAT to the net price.

Non-resident businesses are required to appoint a solvent resident as tax representative in order to register for VAT in the DRC

Output tax for goods must be recorded on the date of the delivery, and for services on the date the payment is received.

Exempt supplies

Goods

The following items are exempt from VAT:

• sales of second-hand movable property made by the persons who used it for the purposes of their business where such property was not eligible for deduction of tax at the time of its acquisition

• sales and imports made by legally constituted non-profit associations when such operations are of a social, sporting, cultural, religious, educational or philanthropic nature in accordance with their purpose, under the conditions provided for by regulation

• sales and transfers made by the state, provinces, decentralised territorial entities and public bodies not having an industrial and commercial character

• sales and imports of official stamps or stamped papers

• the import of banknotes, inputs, equipment used to manufacture monetary signs and their spare parts produced exclusively by the issuing institute as well as import of foreign currency by commercial banks under conditions set by the central bank. 

• sales and imports of agricultural inputs intended for agriculture on the basis of a list determined by regulation

• transactions involving the transfer of real estate by persons other than real estate developers and liable to registration fees

• the import and delivery of human organs and blood by medical institutions or accredited bodies as well as the import and supply of prostheses

• the import and sale of fishing boats and nets

• the import and acquisition of pharmaceutical products intended for the prevention, diagnosis and treatment of diseases, pharmaceutical packaging and pharmaceutical inputs, the list of which is established by regulation, by the pharmaceutical industries, as well as the import and acquisition of medical devices

• the import and sale of mosquito nets

• the import and acquisition of equipment, materials, reagents and other chemicals intended exclusively for prospecting, exploration, research and the construction and development of mining and petroleum projects, before exploitation

• the import of:

  • samples without commercial value which are considered by customs to be of negligible value and which are only used to seek orders for goods of the kind they represent

  • movable property, excluding industrial or commercial equipment, for the personal use of a person or family members who are brought to the DRC at the same time as that person or at another time for the purpose of transferring their residence

• property collected by succession by a person having, on the date of the death of the deceased, his main residence in the DRC, provided that such property was used for the personal use of the deceased

• rewards granted to persons residing in the DRC, subject to the submission of supporting documents deemed necessary by customs

• coffins containing the remains and funeral urns containing ashes of the cremated remains, as well as the ornamental objects accompanying them

• products for testing, provided that the quantities do not exceed those strictly necessary for the testing and that the products are fully consumed during the testing or that the non-consumed products are re-exported or processed, under customs control, so as to remove any commercial value

• donations, legacies or material provided free of charge to the state, provinces, decentralised territorial entities and bodies governed by public law

• baggage of travellers not liable to the duties and taxes provided for by customs legislation

• sales of original works of art by an artist

• the import and sale of coffins

• the import of wheat, maize, wheat flour and maize flour

• the local sale of wheat, bread, maize, wheat flour and maize flour

• local sale of live animals

• the importation of goods by mining companies, excluding petroleum products, under the conditions laid down by regulation

• the import by new companies of capital goods intended for creative investments, under the conditions determined by regulation.

Services

The following services are exempt from VAT:

• the composition, printing, importation and sale of newspapers, books and periodicals, excluding advertising revenue

• the rental of books, periodicals and other magnetic media containing scientific, educational, cultural or religious information as well as the provision of services to library readers, archives and documentation services

• revenue from visits to national historic monuments and museums, zoos and botanical parks

• school fees and boarding fees collected in the normal course of business in national educational institutions duly authorised, as the case may be, by the minister responsible for primary, secondary and vocational education or higher and university education

• examinations, consultations, care, hospitalisation, analytical and medical biology work for humans

• the transport of the sick and wounded by means of transport specially equipped for these purposes

• services provided by funeral directors and body transport

• services provided in the course of their normal activities by legally constituted non-profit associations, where their non-registration does not distort the conditions of competition

• the following services relating to aircraft intended for air navigation companies whose services to or from abroad represent at least 80% of all the services they operate:

  • landing and take-off

  • use of aircraft lighting, parking, mooring and shelter

  • use of facilities provided for the reception of passengers and goods

  • use of aircraft refuelling facilities

  • technical operations relating to the arrival, parking and departure of aircraft

  • use of air navigation assistance devices, the use of mechanical, electrical or pneumatic means to start aircraft engines

  • crew transport on the airport area

  • maintenance and repair operations of aircraft and on-board materials and equipment

  • fire prevention and control service

  • safety visits, technical expertise, aircraft lifting and rescue

  • expertise relating to the assessment of damage to aircraft and insurance indemnities to compensate for the resulting damage

  • operations performed by aircraft consignors and air agents

• the air transport of persons or goods to or from abroad

• land, lake, river, sea and rail transport of persons or goods for the part of the journey carried out outside the national territory

• roadworthiness tests on the weight and quality of goods intended for export carried out by a public body

• the following services, provided for the direct needs of merchant ships, vessels used for industrial activity on the high seas, rescue and assistance at sea:

  • control

  • mooring

  • towing

  • rental of the gantries

  • stay of the boats

  • use of port facilities

  • assistance and rescue of ships and boats

  • maintenance of the vessel and on-board equipment

  • fire prevention and control services

  • use of the facilities provided for the reception of passengers and goods

  • use of facilities for ship refuelling

  • safety visits, hull examination, technical expertise

  • expert reports relating to the assessment of damage to ships

• interest on bank investment loans, leases, agricultural loans and bank overdrafts

• interest on deposits made with credit institutions by non-professionals

• interest on external loans

• social or agricultural credit operations carried out by mutual credit unions, savings and credit unions, savings and credit cooperatives and other micro-finance institutions

• services directly related to oil operations carried out by foreign suppliers for the benefit of oil production companies under the conditions determined by regulation

• the renting of bare premises for residential use by persons subject to value-added tax other than real estate developers

• the premium for life insurance, the premium for health insurance, the premium for direct insurance abroad provided that it has been authorised by the minister responsible for the insurance sector, and the reinsurance premium.

Conditional VAT exemptions

The following activities and services are exempt from VAT, provided that they are subject to specific taxes exclusive of any turnover tax:

• sales of tickets for access to leisure events in sports facilities

• admission fees to a cultural event

• the following operations, subject to registration fees:

  • transactions involving the transfer of ownership or usufruct of real estate, business or customer goodwill, right to lease, with the exception of sales of new buildings built by real estate developers

  • public auctions

• gamblers’ winnings in games of chance

• subject to reciprocity, goods and services intended for the official use of diplomatic and consular missions and international organisations

Zero-rated supplies

The zero rate applies to exports that are considered as consignments of goods beyond the Congolese customs territory.

The zero rate applies whether the goods are delivered directly by the exporter or via an agent.

Input tax

Input tax allowed

VAT charged in advance on the price of a taxable operation is deductible from the VAT applicable to such operation. The concordance between the payment and deduction of VAT implies that the right to deduct is created when the tax becomes payable by the taxpayer.

As regards foreign suppliers of goods (including purchasing bodies or groups), payable at the time of the declaration of release for consumption in the DRC for goods imported directly, goods placed under suspensive procedures or goods taken out of the free zone.

VAT for foreign providers of services become payable once the invoice is paid. 

Taxpayers who have opted for the debit system (service providers as well as constructors are authorised to do so) must specify this option on their invoices so that the recipient can deduct the VAT paid as soon as they receive the invoice instead of at payment.

To deduct VAT, the VAT must be shown on the following documents:

• in general, on an invoice or any other document in lieu thereof (except for invoices issued by foreign service providers)

• as for imports, on the declaration of release for consumption issued by customs

• as for supply of goods or services to oneself, on an invoice to oneself

As soon as the right to deduct VAT arises, the taxpayer may claim the VAT deduction on the monthly return filed on the 15th of the following month.

Input tax expressly denied

Input tax is specifically denied in respect of:

• expenditure on housing, accommodation, catering, entertainment, hiring of passenger cars and passenger transport, except for expenditure incurred by tourism, catering and entertainment professionals in respect of their taxable activity

• goods and services acquired by the company but used by third parties, managers or employees of the company except for work or protective clothing, premises and equipment assigned to the collective satisfaction of the needs of the personnel as well as free accommodation in the workplace for employees specifically responsible for the supervision or custody of these premises

• petroleum products, except those intended for resale by wholesalers or acquired for electricity production to be resold

• petroleum products, except for fuels used by fixed appliances as fuel in industrial companies under conditions laid down by regulation or in aircraft by air carriers

• petroleum products, up to a maximum of 50%, for cases other than those aforementioned

• services of any kind, in particular rental, maintenance, repair, relating to goods, products or merchandise excluded from the right of deduction

• movable objects other than those used by the taxable person for his operation

• buildings (except buildings and premises for professional use)

• goods transferred and services rendered free of charge or at a price lower than the cost price, as commissions, salaries, bonuses, gifts, whatever the quality of the beneficiary, except in the case of advertising objects of low unit value excluding tax

• VAT on vehicles or machinery, whatever their nature, designed or adapted for the transport of persons, constituting fixed assets, as well as VAT on the rental, spare parts and accessories or services related thereto except for:

  • road vehicles with ten or more seats, including a driver, used by companies for the exclusive transport of their staff

  • vehicles or equipment acquired by public passenger transport companies and used exclusively for the purpose of carrying out such transport

  • passenger cars acquired by car rental companies

• carriage of persons and operations ancillary to such carriage, excluding carriage performed either on behalf of a public passenger transport company or under a permanent contract of carriage concluded by the companies to bring their staff to the workplace

• VAT included on an invoice issued outside electronic tax devices by persons subject to the obligation to use such devices

• the VAT collected by persons who are not authorised to do so is not deductible. These persons will still be liable to pay it to the public treasury.

Partial exemption

Under the allocation rule, taxpayers may deduct VAT in terms of the allocation of the goods (depreciable fixed assets) on which the VAT has been paid. In principle, an entrepreneur is entitled to deduct the VAT paid on their purchases of goods, equipment and services for use in their business (input tax) against the total of the tax they charge to their customers for deliveries made and services rendered by them (output tax).

Taxpayers not exclusively carrying out transactions giving them a right to deduct VAT may deduct VAT proportionally based on the portion of the income pertaining to taxable transactions (pro rata). This deduction applies to fixed assets, goods and services, and is calculated on the turnover pertaining to the taxable transaction.

The pro-rata amount is computed from the share of the turnover pertaining to the taxable transactions eligible to the right to deduct.

The share is the ratio between:

• The yearly amount of the revenue pertaining to the transactions eligible to the right to deduct the VAT, including exportations and assimilated transactions

• And the yearly amount of the revenue of any kind carried out by the taxable person excluding the sales of intangible assets, the subsidies of equipment, the indemnities of insurance which are not qualified as the counterpart of transaction is subject to the VAT and is out-of-pocket.

Revenue means any fees, rights and taxes excluding the VAT.

Adjustments

The adjustment system consists of payments by the taxpayer of a fraction of the tax initially deducted for fixed assets:

• in the event that the asset is downgraded, transferred or contributed to another business before the end of the fourth year following the year of acquisition in the case of movable property and the nineteenth year in the case of fix property event, the removal of the assets from the balance sheet, or

• in the absence of this removal, in case of the fourth year 

  • modification of the situation of this asset with regard to the right to deduct

  • regulatory changes

  • change in use of the asset.

The fraction referred to in the above paragraph shall be equal to the amount of the deduction, less the amount of the deduction, as the case may be, of one fifth or one twentieth per year or fraction of a year since the acquisition of property.

In the event of transfer, if the property constitutes a fixed asset for the buyer, the latter may deduct the corresponding VAT to the amount repaid by the seller in respect of the adjustment, provided that they are subject to VAT themselves.

Furthermore, in order to proceed to this deduction, the buyer needs an attest issued by the seller and mentioning the amount of VAT refunded by the latter.

International trade

Imports

VAT is payable on the importation of goods when cleared for home consumption. The tax base for importation is the cost, insurance, and freight (CIF) value plus import duties and, where applicable, consumer duties, for imported products.

To be deductible, the VAT paid on imports must be shown on the import documents (declaration of release for consumption drawn up by the customs authorities).

Services provided abroad and used in the DRC are subject to VAT. When a taxable person established in the DRC receives services from a supplier domiciled abroad that is not registered for Congolese VAT, the recipient of the supply must account for the VAT when the invoice is paid.

Exports

Goods exported from the DRC are zero-rated and the zero rate applies whether the goods are delivered directly by the exporter, or via an agent.

The provision of services by a Congolese company abroad to a foreign company is subject to VAT if the service is used by the foreign company for an activity conducted in the DRC, whereas a service provided in the DRC but used abroad is not subject to VAT.

In practice, VAT incurred by foreigners is not refunded.

Place, time and value of supply

Place of supply

All transactions carried out in the DRC shall be subject to VAT, even when the domicile, residence of the natural person or the registered office of the taxable legal person is located outside the territorial limits of the DRC.

VAT should apply to all business conducted in the DRC, i.e. with respect to sales, under the conditions for the delivery of goods in the DRC and with respect to services, where the service rendered is used in the DRC.

As a result of these statutory provisions, the place of establishment of the parties to the contract, the place of invoicing or conclusion of the operation, and the place of performance of the service do not have any effect on the application of VAT.

Time of supply

The time of supply can be summarised as follows:

• goods — supply of goods or any other transaction having the effect of transferring ownership to a third party, where the said goods are within the national territory at the time of sale or any other transaction

• real estate works — where they are carried out in the country

• supply of services — where the service rendered, the right transferred or the object leased is used or exploited in the country

• commissions — shall be deemed to be received in the DR Congo on the sale of tickets by travel agencies or companies engaged in this type of activity, whatever the destination or mode of transport or the head office of the transport company.

Value of supply

The taxable value is all sums, securities, property or assets or services received as consideration for the transaction, including subsidies and any charges, taxes, duties, fees or levies of any kind connected therewith, but excluding VAT itself.

In particular, it is made up of:

• the CIF value increased by the entry duties and, where applicable, the consumption duties, for imported products

• free on board (fob) value, for exports of goods

• the value of the products at the time of their exit from the free zone

• all sums or values, all benefits, goods or services received or to be received by the supplier as consideration for the delivery, for supplies of goods

• all sums or values, all benefits, goods or services received or to be received by the service provider in return for the service, and where applicable, the value of consumable goods, for services provided

• the value of the goods received in payment for the goods delivered, plus where applicable, the amount of the balancing payment for exchanges

• the amount of contracts, memorandums or invoices, for construction works

• the cost price of the goods supplied, in the case of supplies of deliveries of goods to oneself

• expenses incurred for their execution, for services to oneself

• the difference between the sale price and the purchase price of each good, for sales made by dealers in second-hand goods, works of art, collectors’ items or antiques

• the amount of rents charged by leasing companies, for leasing operations

• the market price, including all taxes, for public contracts

However, these are excluded from the tax base:

• cash discounts, rebates, discounts and other reductions of prices granted provided that they actually benefit and for their exact amount to the customer and that they appear on an initial invoice or corrigendum

• disbursements that are only reimbursements of expenses and that are billed to the client for the exact amount

• receipts that are not in consideration for a deal

• indemnities having the character of damages

• bonuses and capital grants allocated to financing of a specified capital property

• sums reimbursed to intermediaries, other than travel agents and tour operators, who incur expenses on the orders and for the account of their principals, insofar as these intermediaries report to their principals and justify, to the tax authorities, the nature or exact amount of these expenses

• interest received in the form of interest on arrears

• sums received as a deposit on delivery of identifiable, recoverable and reusable packaging. Where such packaging has not been returned at the end of the time limits in use in the profession, VAT shall be due on the consignment price. However, if the latter is lower than the transfer price, it shall be taken into account

VAT compliance

Returns and payment of VAT

Under conditions, a VAT taxable person can deduct in its VAT return, amounts of input tax borne.

VAT returns must be filed by the 15th day of each month in respect of transactions made the previous month.

Payment of the net amount of VAT payable must be remitted to the tax authorities together with the return.

If VAT paid exceeds VAT charged, the resulting VAT credit can be carried forward.

Refund of VAT can only be requested in some very specific circumstances.

If no operations are carried out during a particular month, the return form still has to be filed, but will be marked ‘nil’.

The VAT to be paid is equal to the difference between the gross VAT paid during the month (tax base x 16%), and the deductible VAT plus any VAT credit recorded for the previous month. This

comparison, therefore, produces net VAT payable or a VAT credit.

In the first case, the net VAT payable must be paid when the return is filed.

In the second case, the VAT credit should be entered on a special line on the return for the following month.

Interest and penalties

Penalties which may be applied by the tax administration, depending on the offences committed, are summarised below:

Late filing of the return

• 25% in case the taxpayer files the return before receiving a formal notice from the tax administration.

Late payment 

• 2% per month of delay in case of late payment of all or part of the tax due.

Arbitrary assessment

• Non-filing of returns — in the event of an arbitrary assessment due to the non-filing of returns, a surcharge equal to:

  • 50% of the amount of tax due shall be applied

  • 100% (in case of recidivism).

• In other cases of arbitrary assessment, the tax due is increased by:

  • 25%

  • 50% (in case of recidivism).

Assessment

• In the event of a tax assessment after tax audit, an increase equal to:

  • 20% of the amount of tax evaded is applied

  • 40% (in case of recidivism).

 Any abusive mention of VAT on an invoice or document in lieu of an invoice, issuance of a false invoice or falsification of an invoice to justify a deduction will be charged with a penalty equivalent to three times the amount of the illegally invoiced tax.

A taxpayer who issues a false invoice including value-added tax or who falsifies an invoice presented as proof of a deduction is subject to the payment of a fiscal fine equal to three times the tax thus invoiced. 

The absence of an invoice or document in lieu thereof, in the case of the supply of goods and services by a person liable for value-added tax, is punishable by a fiscal fine equal to twice the amount of the duties compromised.

In the event of a repeat offence, the fine is tripled.

The miss of issuing standardised invoices is punishable by a penalty ranging from 10 000 000 CDF to 100 000 000 CDF. 

Any reimbursement of value-added tax credits obtained on the basis of false invoices shall give rise to the immediate restitution of the sums unduly received, together with a fine equal to the same amount. 

Any deduction made which does not correspond, in whole or in part, to the acquisition of goods or the provision of services shall be punished by a fiscal fine equal to the amount of the duties unduly deducted.

Refunds

Certain categories of profession and certain types of operation are entitled to refunds, such as:

• exporters

• companies making heavy investments

• mining and petroleum companies in the research or development and construction phase of a mining or petroleum project

• companies in cessation of activities

• public establishments and public enterprises in which the state holds the entire share capital and whose invoiced value-added tax has been withheld at source.

Objections and appeals

Taxpayers’ monthly returns are audited by the DGI (Direction Générale des Impôts) or CDI (Centre des Impôts). These audits are conducted by either reviewing documents or conducting an on-site inspection and may lead to an assessment.

Taxpayers may be represented by a third party in the form of a tax adviser of their choice at these audits, which can be initiated at any time.

Taxpayers who receive an assessment notice following an audit have a period of 20 days to make comments.

The tax administration must give a definitive response on receiving these comments and must provide grounds for any elements that it rejects.

Time limits

The deduction right arises when the tax is due by the taxable person.

This right shall be exercised until 31 December of the year following the year in which the tax became payable.

On expiry of that period, the VAT not deducted shall be definitively acquired by the treasury.

This period applies solely to exercising the deduction right, and not to VAT credits.

Thus, a VAT credit generated during a given month may be set off against the VAT collected in subsequent months without any time limit.

VAT records

Tax invoices

All taxpayers must issue a standardised invoice produced by electronic fiscal devices  for the goods that they deliver or the services that they provide to another taxpayer, and for advances received for the provision of services where tax is payable as a result. Generally speaking, the invoice or document in lieu thereof must be in French and must indicate the following:

• the surname, last name, first name or company name, the exact address, the tax number of the seller or provider

• surname, last name and first name or company name, the exact address of the client and his tax number

• the date and serial number of the invoice

• the description and quantity of goods or services

• the unit price and the total price of each type of goods sold and/or exported, services rendered or real estate works, in distinguishing, where appropriate, between taxable and non-taxable amounts those relating to duly justified non-taxable operations

• prices exclusive of value-added tax of the goods supplied or services rendered

• the rate of vat applied and the corresponding amount of the tax

• the non-taxable amount of the transaction

• the amount of the transactions including all taxes.

A service provider who has opted for payment on a debit basis must expressly state this option on the invoice.

In addition, there are other obligations under economic regulations (including the trade register number and bank account number).

Operations performed with non-taxpayers are invoiced for the amount including tax, unless they can claim a dispensatory tax system authorising invoicing excluding tax.

Credit notes and debit notes

A supplier must issue a credit note or a debit note in the following cases:

• if the amount payable for a supply has changed because the supply is cancelled, the nature of the goods or services has been fundamentally changed, or the accepted price has been changed

• if part of, or all the goods are returned to the supplier

• if a tax invoice has already been issued for the supply, which is now incorrect

Record-keeping

Taxpayers must keep regular accounts, including the balance sheet, the profit and loss account, the financial table of resources and uses, the annexed statement and the supplementary statistical statement in accordance with the OHADA Uniform Act.

The accounts must be available in the DRC, and presented in French, and made out in Congolese Franc (CDF). Accounting documents and supporting documents for operations performed by the taxpayer must be retained for ten years from being recorded.

Other indirect taxes

Land and buildings

Insofar as transfers of real estate assets are subject to registration duties, VAT is not applied to the sale of a house.

Rental of empty residential houses between individuals, between legal entities, and between individuals and legal entities is not subject to VAT.

However, rental of all types of premises for use as commercial, business or residential premises by real estate professionals, and rental of fully fitted premises (e.g. furnished residential premises), regardless of who the landlord is, are subject to VAT.

VAT applies to rent, rent supplements, and advance rent. A deposit is not subject to VAT unless it is applied as rent paid in advance. Service charges for which the tenant is billed in addition to the rent are exempt from VAT if they correspond to simple reimbursement of expenses but are subject to VAT if a flat sum is charged.

Leasing

Promotional gifts

Secondhand goods

Regularisation

The taxpayer shall be liable for a fraction of the tax previously deducted:

• in the event of the removal of the assets of the business of property which has been the subject of a deduction in respect of fixed assets,

• or in the absence of this removal, in case of:

  • Modification of the situation of this property with regard to the right to deduct

  • Regulatory changes

  • Change in use of the property before the end of the 4th year following the year of acquisition, for personal property, or before the end of the 19th year following the year of acquisition, for real property.

The fraction referred to in the above paragraph shall be equal to the amount of the deduction, less the amount of the deduction, as the case may be, of one fifth or one twentieth per year or fraction of a year since the acquisition of property.

In the event of transfer, if the property constitutes a fixed asset for the purchaser, the latter may deduct the corresponding VAT to the amount repaid by the vendor in respect of the adjustment, provided that he is subject to VAT himself.

As an exception to this rule, all operations carried out by dealers in second-hand goods fall within

the scope of VAT under ordinary conditions. The exemption for sales of second-hand goods is not applicable to sales made by professional second-hand traders.

Transfer of a business

Import duty

Customs duty on imports is calculated on the cost, insurance, and freight (CIF) value of the goods. The customs tariff in imports is the following:

• 5% (machine tools, materials and transport of merchandise)

• 10% (floor, aggregate, petrol, diesel, kerosene)

• 20% (chemical products, clothing, furniture, cigarettes)

Imported goods are also subject to the following levies at the time of border crossing:

• VAT on imports

• for certain goods, consumption and excise duties

• various para-fiscal taxes

Excise duty

Some products, such as tobacco, perfume and alcohol are subject to consumption and excise duties.

The rate of excise duties on locally made products and imported products varies between 5% and 80%.

Transfer duty

Funds transfer in and out of DRC are subject to exchange control regulations.

As such, payments to the local entity will require the subscription of a type RC return with a licensed bank for transactions equal or exceeding USD10,000.

In addition, the Central Bank of Congo levies an exchange control fee of 0.2% on all transactions subject to its regulation (payments in and out DRC).

Stamp duty