Global Mobility Services: Taxation of International Assignees - Democratic Republic of Congo

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Global Mobility Services:
Taxation of International
Assignees - Democratic
Republic of Congo
Taxation issues &
related matters for
employers &
employees 2016
Last Updated: June 2016
This document was not intended or written to be used, and it cannot be used for the purpose
of avoiding tax penalties that may be imposed on the taxpayer.
Country:
Democratic Republic of
Congo
Introduction:
4
Step 1:
Income tax summary
5
Step 2:
Rates of tax
9
Appendix A:
Contacts and offices
10
Additional Country Folios can be located at the following website:
Global Mobility Country Guides
Global Mobility Country Guide (Folio) 3
Introduction:
PwC is the world's leading provider of
professional services. The People and
Organisation group works together
with its clients to find solutions for the
challenges they encounter when
transferring people from one country
to another.
This summary is intended to inform
foreign nationals and their employers
4
People and Organisation
about high level tax, social security and
immigration issues.
before any specific decisions
are made about these issues.
This guide is not exhaustive and
cannot be regarded as a substitute for
professional advice addressing
individual circumstances.
Nevertheless, answers will be found to
most of the questions raised by an
expatriate or his/her employer. More
detailed advice should be sought
More information can be
obtained from our offices
specializing in People and
Organisation, Global Mobility.
Step 1:
Income tax summary
Question
Answer
Basic information
1
The date of the tax year end
31 December
2
Types of income that are liable to tax
Salaries, wages, fees, benefits which do not
represent reimbursement of professional expenses,
gratuities, bonuses and all other payments fixed or
variable, whatever their qualification and all
benefits except those resulted from housing,
transport and family allowances and medical
expenses to the extent that they are legal or
reasonable.
3
How are residents and non residents
treated differently for tax purposes?
4
Do spouses file tax returns jointly or as
individuals?
Expatriate employees (resident or not) are subject to
personal tax in the same way as local employees.
However, employers of expatriate employees are
subject to a tax of 25% on the expatriates’
remuneration. This amount is not deductible for
corporate tax purposes. However, the holder of a
mining title and their subcontractors are subject to
preferential regime. In this regard, the applicable
rate is 10% and this amount is deductible for
corporate tax purposes.
Not applicable. There is no personal tax return
filing obligation. The DRC only levies tax on
employment income and the employer is required
to file the tax return.
5
Method of determining domestic tax
residence
Criteria to determine the residence status are
provided by the law related to corporate income tax.
In DRC, personal income tax is withheld by
employers.
Is be deemed to reside effectivelyDRC:
• the one who, whatever his nationality, DRC has
established his real residence,effective, continuous,
• The one who DRC's domus, family, activity center,
the headquarter of its business andhis occupations;
• The person who completed the country seat of his
fortune. The word headquarters must be heard not
that the place of the situation of goods but the place
Global Mobility Country Guide (Folio) 5
Question
Answer
where the owner administers or supervises the
administration or the place which it moves away
only to return there when the cause of expulsion has
ended, that is to say, the place where it is so fixed
that it is considered absent when he is not there and
that absence is finished when he returned.
6
Provide some details of the exchange
controls in this jurisdiction
-
6
People and Organisation
Payments to or from a foreign country are
subject to a 0.2% exchange control fee.
Payments of taxes must be made in
Congolese Francs
Question
Answer
Tax rates, allowances and credits
DRC income tax rates are progressive between 0%
and 40% in accordance with the taxable income
brackets provided by the law. The overall tax shall
not exceed, in any case, 30% of the taxable income.
A rebate of 2% applies on the tax due for each
dependent. This tax rebate is not applicable for
revenues which exceed the 7th level of the tax scale
and is limited to 9 dependents.
Theoretically the capital gains on securities shall be
included in the taxable amount and subject to IPR.
In practice, since there is no modality of individual
statement, the capital gains are not taxed.
7
Income tax rate
8
Income tax allowance amount
9
Capital gains tax allowance amount
10
Rate of capital gains tax
There is no specific tax rate for capital gains. The
capital gains are considered as taxable income,
according to the Schedule of the IPR.
11
Rate of tax on interest
Not applicable. This income is not taxable in the
DRC
12
Rate of tax on dividends
Dividends are subject to withholding at source by
the paying company established in the DRC at the
rate of 20%. The rate (10% for dividends paid by
mining companies.
13
Rate of employer social security
14
Rate of employee social security
The employer's share calculated on the gross salary
is:
• 9% for the INSS,
• 0.2% for the ONEM,
• 1% to 3% for the INPP by the number of company
employees
The rate is 3.5% of gross salary.
15
What types of income are exempt from
tax/deductible from taxable income?
The following benefits in kind are tax exempt:
-
-
housing allowances (up to a maximum of 30%
of the gross salary);
transportation allowances (as far as they do not
exceed four bus tickets per day or four taxi rides
per day in the case of executives);
family allowances paid to employees, subject to
certain limits; and
medical expenses (if they are not excessive).
Global Mobility Country Guide (Folio) 7
Question
Answer
Before arriving in the country
16
What must an individual do in order to be
able to work in the country ie obtain a
work permit, intra company transfer visa,
critical skills visa
In addition to a work permit, the expatriate
employee who intends to work in the DRC must
obtain a residence visa for a period of two years. The
request for the work card and work visa is subject to
the employer's request for its expatriate employees
from competent administrations.
17
What conditions must be met to be eligible
to have a work permit
In order to be eligible for a work permit the
following documents have to be submitted:
- Copy of passport with a valid visa (six months
validity);
- Four passport photos (less than six months old);
- Copy of resume of the employee;
- Copy of degree or relevant diploma;
- work contract approved by the National Office
of Employment;
- Medical or health certificate;
- Copies of evidence of affiliation with social
administration (social security and training
institutions in DRC).
18
What is the maximum period a work
permit will be issued for
A work permit is issued for to 2 years.
19
Can a work permit be renewed
Yes, it is renewable
20
What would be the immigration
requirements for a short term business
visitor
For a short term business visitor, it is
recommended to apply for an ordinary visa which
lasts up to 6 months.
The conditions to apply for the ordinary visa are
the following:
- Hold a valid passport;
- Fill out the visa application form;
- Attach a passport photo;
- Have sufficient means of living;
- Be supported by a legal or natural person
regularly established in the DRC.
21
At what point/type of activity would
trigger a tax liability in the country
Once the existence of a contractual relationship is
established in all its form. The tax liability is
triggered by the payment of salaries. However,
companies are required to file at the beginning of its
activities a nil return in the absence hiring staff as
well as in the absence of payment of salaries
8
People and Organisation
Question
Answer
During the assignment
22
Does an individual need to register as a
taxpayer
Not applicable
23
Timeline and process for registering as a
taxpayer
Not applicable
24
Are provisional taxes required?
Not applicable
25
If yes, on which dates?
Not applicable
26
If yes, what are the penalties for non
compliance?
Not applicable
27
Important dates to remember during the
tax year
It is important for the employer to remember the
15 of each month since it is considered as the
deadline for filing and for the payment of returns.
At the end of the tax year
28
Tax return filing deadline
The employer tax return filing deadline is on the
15th of January
29
Penalty for late filing
The 25% is calculated on the taxes due. However,
article 9 of the Finance law 2014 requires the filing
of return :
- For taxpayers that benefit from exemption
;
- For taxpayer that perform exempted
transactions;
- For taxpayer that have a nil return
The absence of return will lead to a fine equal to
200 000 Congolese Francs.
30
Tax payment deadline
At latest the 15th of the month following the
payment of salaries
31
Penalty for late payment
4% per month of delay
At the end of an assignment
32
The process and actions required before leaving
the country
In principle, before leaving the DRC, it is important
to request the final tax discharge. In practice, no
formal requirement is prescribed.
Other comments
The local employees of international organizations
and diplomatic missions can under the law to
subscribe and pay themselves returns on allocated
remuneration, insofar as the employer is not subject
to any tax liability (even declarative) under
international conventions. It is therefore a
qualification to the withholding mechanism.
Global Mobility Country Guide (Folio) 9
Step 2:
Rates of tax
Personal income tax rates for 2015 ( Congolese Franc or CDF)
Number
Rate
1
0,0%
for the income
bracket from
0,00 to 524 160,00
2
15%
for the income
bracket from
524 161,00 to 1 428 000,00
3
20%
For the income
bracket from
1 428 001,00 to2 700 000,00
4
22,5%
For the income
bracket from
2 700 001,00 to4 620 000,00
5
25%
For the income
bracket from
4 620 001,00 to7 260 000,00
6
e 30%
For the income
bracket from
7 260 001,00 to10 260 000,00
7
32,5%
For the income
bracket from
10 260 001,00 to 13 908 000,00
8
35,0%
For the income
bracket from
13 908 001,00 to 16 824 000,00
9
37,5%
For the income
bracket from
16 824 001,00 to 22 956 000,00
10
40%
For the rest
22 956 001,00 and more
10
Threshold (CDF°)
People and Organisation
Appendix:
Contacts and offices
Contacts
Emmanuel Lebras
Partner
Damien BOUTROS
Senior Manager
Tel:
+242 05 557 76 76
Tel:
+243 99930 9900
Email:
[email protected]
Email:
[email protected]
Léon Nzimbi
Director
Jerry Tshiyamu
Senior Manager
Tel:
+243 81525 6713
Tel:
+243 81511 6500
Email:
[email protected]
Email:
[email protected]
Siegfried Dibong
Senior Manager
Tel:
+243 82605 7400
Email:
[email protected]
11
Global Mobility Country Guide (Folio)
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