Congo, Democratic Republic of
SIGNIFICANT DEVELOPMENTS
Since February 18,1998, the government has established a kind of levy or withholding on individual and corporate income tax (precompte sur la contribution sur les benefices ou precompte B.I. C).
TERRITORIALITY AND RESIDENCE
Congo applies the rules of the territoriality of income. It taxes its citizens and aliens (residents and nonresidents) on income derived from professional, commercial, and employment activities carried out in Congo; from rental of real estate located in Congo; and from domestic investments. Foreign-source income is not taxable. The tax system is scheduler.
GROSS INCOME
Employee gross income/ The following items are included in taxable compensation: salary, living allowance, tax reimbursements, benefits-in-kind, and any other reimbursement of personal expenses, except medical expenses and reasonable housing and transportation allowances.
Company-owned or company-leased housing may be provided to employees without being considered a taxable benefit, provided housing allowances or benefits-in-kind do not exceed 30% of gross salary. Nontaxable transportation allowances are fixed by reference to official public transportation prices.
The private use of company-owned or leased vehicles is taxable. Moving and home-leave transportation expenses are nontaxable.Family allowances are nontaxable to the extent that they do not exceed the legal limits. These are at present negligible. There are no special concessions for foreigners.
Capital gains and investment income/ Capital gains are taxable at 40%.Dividends and other profit distributions by domestic companies are subject to a final tax at the rate of 20%, which is withheld at source.Rental income from real estate is subject to tax at 22% on gross income (contribution sur les revenus locatifs). The main tax amount is withheld by the tenant when paying his or her rent (20% of the rent paid).
DEDUCTIONS
Business deductions/ Reimbursement of genuine business expenses is generally nontaxable.
Nonbusiness expenses/ Expenses deductible by an employee are listed below.
1.Medical expenses for employees and their dependents to the extent not reimbursed by the employer.
2.Pension and health plan contributions to a recognized scheme, provided these are payable under the terms of the employee’s work contract.
3.Social security contributions.
Personal allowances/There are no personal allowances available, except for the family allowances mentioned above (see “Gross income”). Tax reductions are negligible.
Tax credits
No tax credits are available
OTHER TAXES
Social security taxes / All employees must contribute to a national pension scheme. Since August 20, 1992, the contributions have been fixed at 8.5% of the total gross remuneration; 5% is paid by the employer and 3.5% by
the employee, based on gross remuneration less transport allocation, family allowance, and housing allowance.
These contributions are deductible in determining taxable income.Local taxes on income/There are no income taxes payable in addition to central government taxes.
TAX ADMINISTRATION
Tax returns and payment/ Salaries and wages are subject to tax withholding at source, and employers are required to make annual tax returns for their employees prior to January 10 following the end of the fiscal year (December
31). Individuals with no sources of income other than wages and salaries need not file a tax return; this is the employer’s responsibility. In all cases, income of spouses is combined.
TAX RATES
The annual taxable income is subject to tax at graduated rates. For annual taxable income up to CDF78,000 , the tax payable at graduated rate is CDF26,269.95. The excess over CDF78,000 is taxed at 60%. However, the total tax payable is limited to 35% of total taxable income.End-of-career indemnities an indemnities paid by the employer (contractual
or otherwise) following cessation of employment or on breaking a contract of employment are taxed separately at 10%.
For occasions workers, the rate for the calculation of tax on remuneration is fixed at 15%.
INDIVIDUAL TAX CALCULATION
Assumptions Resident alien husband and wife, two children; one spouse earns all the income. The employer furnishes housing and a car and also reimburses medical expenses.Tax computation
Basic salary CDF 2,400,000
Overtime &nb
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