A. Value Added Tax/Sales Tax (National Government)
1. Name of Tax, Levied in Terms of Which Act (Name, Number and Year)
Turnover tax
Act No 69-058, dated 5 December 1969
Under the above-mentioned terminology, this law actually introduces three main categories of Turnover
Taxes:
- Turnover Tax on import
- Internal Turnover Tax, and
- Turnover Tax on export.
2. Department Responsible for Administration
- The General Tax Directorate; and
- The Customs and Excise Directorate, when it has to do with Turnover Tax on import.
3. Taxpayer
Depending on the type of tax concerned, the taxpayer is:
- In the event of the Turnover Tax on import, the importer (art.4);
- In the event of the Internal Turnover Tax, the manufacturer, the contractor or the service supplier (art.11); and
- In the event of the Turnover Tax on export, the exporter but the withholding at source is to be done by the bank involved in the export transaction (art. 60 and 61).
4. Time When Tax is Levied
Tax is levied when the chargeable event occurs and this happens, depending on the case:
- Regarding Turnover Tax on import:
At the time of the declaration of dispatch for consumption of the imported goods (the placing of goods in warehouse or the conditional import does not trigger a Turnover Tax assessment).
- Regarding Internal Turnover Tax:
In the event of sale of locally manufactured products:
Tax is levied at the time of dispatch for consumption of these products, meaning at delivery time, on the local market (art.12.2). By sale, we mean the exchange, the free distribution of products to staff members or through sponsorship, the consumption of the products by the manufacturer himself (industrial products, for example), the sale under condition subsequent. However, tax on the sale under condition precedent is only due when this condition is carried out.
In the event of provision of services:
Tax is levied at the time of the provision of services or assistance (art.12 1) or the use in DRC of these services, when the services are delivered in a foreign country. Usually, we are talking here of the provision or use of services, which differs from the time of signature of an agreement or from that of invoicing or still of receipt of payment.
In the event of construction works:
Tax is levied on invoicing of works carried out or on receipt of progress payment for works to be carried out (art 12.3) Carrying out construction works does not automatically bring about Turnover Taxes. It is considered to be one of the loopholes in the Law which mixes up the time when tax is due with the chargeable event which, in itself, onl gives rise to the Tax. However, taking into account the prescriptions of the Law, any construction works carried out for his own benefit, by someone who is habilitated as a property development contractor, is not liable for Turnover Tax on construction works as no invoicing is done.
- Regarding Turnover Tax on export:
At the time of the sale for export of goods subject to that Tax (art. 60) All transactions falling into that category, on the local scene, are also included in the sale. However, Tax is only due at the time of reparation of foreign currencies generated by the export and, in case of non repatriation of the foreign currencies, through automatic taxation for the account of the exporter (art. 61).
5. Included in Tax Base
- Regarding Turnover Tax on import:
Turnover Tax on import is based on the CIF value cleared through Customs (art.3). It is a fact the cost price of goods imported to which one must add the cost of freight and insurance as well as Customs duties. Not included in the Tax Base, if they are not invoiced with freight, are the following: postage and handling charges charges while the goods are at Customs, Agents or Shipping agents' charges as well as any other charges and taxes, even if they occurred before the intermediate reloading (one speaks of intermediate reloading when there is a change in the means of transport, before the agreed upon place for delivery.
- Regarding Internal Turnover Tax:
In the event of sale of locally manufactured products:
Turnover Tax is calculated on the gross amount of the Invoice (art. 10.2) The gross amount of the invoice consists not only of the value of the goods sold but all the other charges relating to the sale (especially transport, if it is to the seller's account), indirect taxes and other taxes, with the exclusion of Turnover Tax for the account of the seller and packaging charges, if the sale takes place packing lost. Despite the fact that the Law is silent about that matter, in practice, it is admitted that amounts given on consignment and charged to the Invoice are not liable for Turnover Tax. The same applies to rebates, refunds and other price reductions, as long as they are reflected in the Invoice. This means that only refunds exclusive of Invoice are taxable. When the sale takes place between interdependent people, the price to be taken into account is, at least, the usual price, meaning the price agreed upon when the sale with foreigners took place (art 10.2 a and b).
In the event of provision of services:
Tax is also calculated on the gross amount of the Invoice, having included any commissions, bonus or any other amount relating to the retribution of services, of whatever type they may be (art. 10.1) When the service offered includes the delivery of movables (spare parts, miscellaneous consumables etc.) the Turnover Tax only applies to the installation cost, the value of the movables themselves having first been deducted. However, if the goods have been manufactured by the service supplier himself, they will be liable for Turnover Tax, on the basis of use by the manufacturer himself.
In the event of construction works:
Turnover Tax is based on three-quarter of the gross Invoice, before deduction of any penalty for late payment (art. 10.2c).
- Regarding Turnover Tax on export:
Turnover Tax is based on the FOB value of the goods, the export duties to be paid being included, if applicable. Despite the fact that the Law is silent about that matter, we are once again referring to the usual price and, should the sale take place between interdependent people, the price to be taken into account is that usual price.
6. Positive Rates
- Regarding Turnover Tax on import (art.6):
For imported products liable to Customs duties inferior or equal to 15%, Turnover Tax is 3% (goods aimed at the social sector and products not levied at protective rates)’;
For products with Customs duties rates superior to 15% (semi-protected and protected rates), Turnover Tax is 13%.
- Regarding Internal Turnover Tax (art. 13):
In the event of sale of locally manufactured products:
The rates are the same as those levied on imported products of a similar nature (3% and 13%)
In the event of provision of services:
- For transport operations: the rate is 6% for internal transport, and 15% for international transport (art.);
- For services rendered or used in DRC, the rate is 18%;
- For services rendered in a foreign country and used in DRC, the rate is 30%.
In the event of construction works (art. 13.2 C):
The rate is then 18%
- Regarding Turnover Tax on export:
The following rates apply:
3% on coffee and crude oil
6% on unbarked timber
0,25% on mining products coming from traditional work methods
7. List of Goods/Services at Zero Rate
8. List of Goods/Services at Positive Rates Other Than Standard
9. List of Exemptions
- Regarding Turnover Tax on import:
Only imports of military goods and of diplomatic missions, as long as there is no exaggeration, are exempted from Turnover Tax.
Everything else, all the import goods liable to Customs duties are also subject to Turnover Tax on import.
- Regarding Internal Turnover Tax:
Are exempted from Internal Turnover Tax –
In the event of sale of locally manufactured products (art. 14 1):
- Sales on behalf of diplomatic or consular staff;
- Sales of objects of art locally manufactured, when the seller is the artist himself;
- Sales of local products similar to imported products exempted from import duty.
In the event of sale of locally manufactured products (art. 14 1):
- Sales on behalf of diplomatic or consular staff;
- Sales of objects of art locally manufactured, when the seller is the artist himself;
- Sales of local products similar to imported products exempted from import duty.
In the event of provision of services (art. 14 4):
- Everything regarding commissions and brokerage on books, newspapers and periodicals. This exemption does not normally apply to printing and editing costs, but only on commercial transactions;
- Rentals of hotel rooms made on behalf of representatives of the Civil Service, in the performance of their duties;
- The transport of goods and people, with the exception of air or sea transport of people, when the tickets are issued in DRC;
- Rentals of fully furnished residential buildings;
- Medical and paramedical activities as well as funeral services;
- Supply of services on behalf of diplomatic representatives.
In the event of construction works:
- Works officially recognized as of national interest, by Decree of the Minister responsible for Finances;
- Works carried out for diplomatic missions.
- Regarding Turnover Tax on export:
Turnover Tax on export is only applicable to mining products, coffee, crude oil and timber.
10. Tax Period
Turnover Tax is a monthly tax, unless related to imports or exports; in that case, it is liable after each transaction.
11. Deferment Schemes/Special Schemes
12. Beneficiary of Revenue
The Treasury (National Government)
B. Excise Taxes Alcohol (National Government)
1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)
Consumer duties
Statutory Order No 68-101, dated 6 January 1968.
2. Department Responsible for Administration
The Customs and Excise Directorate (OFIDA)
3. Taxpayer
The manufacturer or the importer, for goods of a similar nature which are liable to Consumer duties. In the event of the goods liable to Consumer duties not being imported but locally manufactured, only Consumer duties are applicable.
The law gives extensive explanations for alcohol and alcoholic beverages. They are defined as being:
- distilled beverages, fermented beverages and non-denatured ethyl alcohol of not less than 80 degrees;
- alcoholic beverages consisting only of distilled alcohol;
- alcoholic beverages consisting only of fermented alcohol, except in the case of ethyl alcohol at less than 5%, added for preservation purposes;
4. Included in Tax Base
Consumer duties are set depending on the quantity of manufactured goods. In the case of alcohol and alcoholic beverages, the unit of measurement used is the Hectolitre but the ultimate base of taxation is still the factory price or the CIF value cleared through Customs.
5. Tax Rate (Tariff Heading, Description, Rate Per Litre or Per Litre of Absolute Alcohol)
Rates vary depending, on the one hand, on the alcohol content which is calculated using the Gay-Lussac alcoholmeter, at a temperature of 15 degrees C, and on the other hand, on the type of drink itself:
- for beers:
with an alcohol content of less than 6% the rate is 15%
with an alcohol content superior to 6% the rate is 20%
- for whiskey the rate is 40%
- for grape wines:
with an alcohol content of less than 6% the rate is 15%
with an alcohol content superior to 6% the rate is 30%
- for denatured ethyl alcohol:
for medicinal purposes the rate is 3%
in the perfume industry the rate is 10%
for any other use the rate is 3%
6. Rebates
Wine speciallly manufactured for church use and fermented beverages issued by ancestral methods are not liable to consumer duties (Article 12.A & B)
7. Beneficiary of Revenue
The Treasury (National Government)
C. Excise Taxes Tobacco Products (National Government)
1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)
Consumer duties.
Statutory Order No 68-010, dated 6 January 1968.
2. Department Responsible for Administration
The Customs and Excise Directorate (OFIDA)
3. Taxpayer
The manufacturer of tobacco products or the importer, for similar imported goods. Locally manufactured tobacco are also liable to Consumer duties only but imported ones are liable to both Customs and Consumer duties.
4. Included in Tax Base
Consumer duties are set on ex-manufacture price or, for imported goods, on the CIF value cleared through Customs.
5. Tax Rate (Tariff Heading, Description, Rate Per Kilogramme, or Per 10 cigarettes/Cigars)
The rate is 40% of the factory price or the CIF value cleared through Customs.
6. Rebates
Non-manufactured tobacco and those imported, duty free, by passengers in accordance with the customs legislation are not liable to consumer duties (article 12.D)
7. Beneficiary of Revenue
The Treasury (National Government)
D. Excise Taxes Fuel/Hydrocarbon Oils (National Government)
1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)
Consumer duties
Statutory Order No 68-010 dated 6th January 1968.
2. Department Responsible for Administration
The Customs and Excise Directorate (OFIDA)
3. Taxpayer
The Importer
4. Included in Tax Base
The price of petroleum products being set by regulation, the basis of reference used to calculate Consumer duties as well as Customs duties remains the value stipulated by Ministerial Order of the Minister responsible for the Economic sector.
Since 1984, this value, known as Border Fiscal Medium Price ("Prix Moyen Frontiere Fiscal" or PMFF) is set out as follows in US$ and per Tm3:
Products Western Eastern Southern
Border
fuel 159,6 390,0 390,0
paraffin 157,2 400 308
diesel oil 159,7 390 390
fuel oil 171,5 171,5 171,5
gaz 425 425 425
avgaz 40,54 40,54 40,54
jet A1 50,49 50,49 50,49
5. Tax Rate (Rate of Duty Per Litre, Total Tax Burden as a Percentage of Retail Price)
The rate is 15% of the CIF value cleared through Customs.
For Super and fuel however, the rate is 25%
6. Rebates/Concessions/Special Schemes
Aviation fuel, i.e. Jet A1 loaded in aircrafts in international traffic are liable to Consumer duties (Article 12 F)
7. Beneficiary of Revenue
The Treasury (National Government)
E. Excise Taxes - Non Alcoholic Beverages/Other (National Government)
1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)
Consumer duties.
Statutory Order No 68-010, dated 6th January 1968.
2. Department Responsible for Administration
The Customs and Excise Directorate (OFIDA)
3. Taxpayer
The manufacturer of non-alcoholic beverages or the importer, for similar imported goods.
Locally manufactured beverages are liable to Consumer duties only but imported ones are liable to both Customs and Consumer duties.
4. Included in Tax Base
Consumer duties are set on factory price or, for imported goods, on the CIF value cleared through customs.
5. Tax Rate (Tariff Heading, Rate per Litre, or per Kilogramme, or per Unit)
- mineral water the rate is 10%
- sparkling beverages the rate is 3%
6. Rebates
Fruit juices whose are not fermented and contain no alcohol element are not liable to consumer duties (article 12.C)
7. Beneficiary of Revenue
The Treasury (National Government)
F. Excise Duty on Luxury Goods - Ad Valorem (National Government)
1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)
Consumer duties.
Statutory Order No 68-101, dated 6 January 1968.
2. Department Responsible for Administration
The Customs and Excise Directorate (OFIDA)
3. Taxpayer
The manufacturer of alcohol-based perfumes or in liquid form and the importer, for similar imported perfumes.
Locally manufactured perfumes are liable to Consumer duties only but imported ones are liable to both Customs and Consumer duties.
4. Included in Tax Base
Consumer duties are set on factory price or, for imported goods, on the CIF value cleared through Customs.
5. Tax Rate
All perfumes are taxed at the rate of 10% of the tax base
6. Special Methods (to deal with the specific needs of some industries)
7. Beneficiary of Revenue
The Treasury (National Government)
G. Excise Duty on Other Goods (National Government)
1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)
Consumer duties
Statutory Order No 68-010 dated 6th January 1968.
2. Department Responsible for Administration
The Customs and Excise Directorate (OFIDA)
3. Taxpayer
The manufacturer or the importer of:
- sugar
- matches and
- hydraulic cement
Locally manufactured products are liable to Consumer duties only but imported ones are liable to both Customs and Consumer duties
4. Included in Tax Base
Consumer duties are set on factory price or, for imported goods, on the CIF value cleared through Customs.
5. Tax Rate (specify ad valorem or specific)
- Sugar the rate is 5%
- Matches the rate is 5%
- hydraulic cement the rate is 5%
6. Special Methods (to deal with the specific needs of some industries)
7. Beneficiary of Revenue
H. Air Passenger Duty/ Departure Tax (National Government)
1. Name of Tax Levied in Terms of Which Act (Name, Number and Year)
2. Department Responsible for Administration
3. Taxpayer
4. Included in Tax Base
5. Tax Rate
6. Exemptions
7. Beneficiary of Revenue
I. Financial Transaction Taxes/Stamp Duty (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year)
2. Department Responsible for Administration
3. Taxpayer
4. Included in Tax Base
5. Tax Rate
6. Exemptions
7. Beneficiary of Revenue
J. Payroll Taxes/Social Security Taxes (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
Employers Contribution to Social Security
Statutory Decree, dated 29 June 1961.
2. Department Responsible for Administration
The National Social Security Institute (I N S S)
3. Taxpayer
Social Security consists of several departments and depending under which department they fall, the taxpayers are:
- In the Department responsible for pension funds:
Both Employer and Employee must pay a contribution which is calculated separately.
- In the Department responsible for Occupational Hazards:
Only the Employer is liable to tax, and only in cases of accidents or occupational diseases.
Remark: Non-occupational related diseases (all of them) of the Employers, their family members or people they are responsible for, are completely for the account of the Employers.
4. Included in Tax Base
The contribution is calculated on all the remunerations paid by the Employer (art. 13.1 degree) after deductions of either the refunds of Professional Expenses (expenses occurred during missions, etc ...), or Transport charges, or Accommodation Expenses.
5. Tax Rate
The rate is 8.5% divided as follows:
- 3.5% for the Employee and
- 5% for the Employer
6. Exemptions
7. Beneficiary of Revenue
The National Social Security Institute
K. Other Taxes (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
3. Taxpayer
4. Included in Tax Base
5. Tax Rate
6. Exemptions/Rebates/Deferments/Special Schemes
7. Beneficiary of Revenue
L. Other Taxes 2 (National Government)
1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year
2. Department Responsible for Administration
General Directorate for Administrative, Legal, Property and Participatory Revenues (D.G.R.A.D.)
3. Taxpayer
The Taxpayer is the person who generally is:
- either the claimant of the administrative act whose granting is subject to the payment of a remunerative tax;
- or the one exercising the activity under a licence or an authorization.
Each Decree or Order establishing those taxes always stipulates who the Taxpayer is.
Specific cases:
- for Transfer Duties, the taxpayer is the buyer;
- for Licence Fees granted for a concession in the Public Sector of Telecommunication, the taxpayer is the operator;
- for Exploitation Rights granted in connection with a Forestry Concession, the taxpayer is the holder of the rights himself;
4. Included in Tax Base
General:
Each text regarding a Tax on remuneration stipulates its taxable base.
Specific cases:
For Transfer Duties, the basis comprises the selling price as it appears in the Agreement of Sale. But if the Authorities have ground to believe that the price has been under-estimated, they can choose the market value, based on calculation by experts, even if the above-mentioned agreement was signed in front of a Lawyer. However, this possibility of reviewing the contractual value is not applicable if a public sale took place according to the Rules and Regulations in force.
5. Tax Rate
General:
Rates also vary according to the type of Act issued. They are stipulated in the founding text and consist either in Ad Valorem rates or excise taxes with a stipulated fixed amount. These rates, especially in the case of specific taxes, are regularly updated, due to the depreciation of the currency; however, for a while now, they have been based on the fiscal Franc (the Fischal Franc being a rather stable currency).
Specific cases:
- Transfer Duties are at 15% of the selling price or the market value of the asset, if the price is under-estimated.
- Motor Vehicle Registration Fees are:
In the case of a new registration.
In the case of a transfer following a sale:
- Emission Taxes (one of the Environmental taxes) are set at a specific rate which varies according to the type of activities under consideration. Thus a Taxpayer can find himself liable to several taxes if he is involved in several different activities.
6. Exemptions/Rebates/Deferments/Special Schemes
7. Beneficiary of Revenue