Accounting and tax

Tax Rates

1. The standard corporate tax rate in the DRC is 30%;
2. Capital gains are included in the taxable income and are hence taxed at the corporate income tax rate;
3. The standard VAT rate of 16% is levied on imports and supply of goods/services in DRC;
4. All dividends, royalties and interest payments are subject to a withholding tax rate of 20%. However, distributions to local mining companies and their subcontractors are subject to a reduced withholding tax rate of 10% for dividends. Interest paid by mining companies for loans borrowed in foreign currency abroad are exempted from withholding tax;
5. Payment for professional services performed and rendered by non-resident companies in DRC is subject to a withholding tax rate of 14%, if the period of the said service does not exceed 6 months;
6. Transfer of a building property or piece of land is subject to a stamp duty at the rate of 3% applicable on the total value of the property.

Tax Filings

1. Corporate tax returns must be filed before the 30th of April; failure to do so will subject the company to a penalty of 20% for the first offence and 40% for second offence;
2. In DRC, VAT returns must be filed on a monthly basis.

Miscellaneous Information

1. An indefinite carry forward of losses is permitted in the DRC. However, it may only be offset up to 70% of the pre-tax profit in any single fiscal year;
2. The Democratic Republic of Congo has signed only 2 double taxation avoidance treaties, with Belgium and South Africa.

Legal and compliance

Incorporation Regulations

1. Our Clients can setup a DRC company with 1 director and 1 shareholder. Under DRC law, there are no residency or nationality requirements for directors and shareholders;
2. In DRC, all companies are required to provide a local registered office in the country. However, there is no requirement to appoint a company secretary;
3. Before company setup is approved, A DRC company must open a capital account and deposit the minimum share capital amount;
4. A DRC company will be required to register for tax and social security with i) Tax Authority ii) Social Security office and iii) Ministry of Labour.

Labour Regulations

1. Employers are also required to remit Social Security contributions at the rate of 9% imposed on gross monthly salaries;
2. DRC law favours hiring of local workers. Consequently, percentage of foreigners in a local company may not exceed 15% of the total work force;
3. All employers must provide their employees fixed term contracts (up to 2 years) or open-ended contracts. All non-written contracts are assumed to be open ended;
4. Employers may hire new employees on probation. However, the probationary period may not exceed 6 months;
5. For night duty, employees will be paid 1.25 times the normal hourly wage. For overtime, they will be 1.375 times the normal hourly wage;
6. DRC law bans all employees from discriminating on the grounds of sex, gender, caste, creed, colour and religion.