The Congolese Finance Law for 2017 (Law no. 33/2016), was enacted on 31 December 2016. The main new measures, effective as from 1 January 2017, are as follows:
A. Transfer Pricing
- Increase to 500,000,000 F.CFA (equivalent roughly to 800,000 USD) of the turnover threshold (tax excluded) above which the taxpayers must prepare transfer pricing documentation;
- Creation of a new obligation to file annually with the Tax Administration a “light” transfer pricing file, including a description of (i) the deployed activity; (ii) the main intangible assets held; (iii) the group’s transfer pricing policy; (iv) the operations conducted between associated companies; and (v) the main transfer pricing method used;
- Setting out the transfer pricing methods to be used (in line with the OECD methods).
B. Advance Pricing Agreements (APAs)
Further detail has been given to the provisions regulating Advance Pricing Agreements (APAs), which may now be concluded for a period of three years.
C. 20% Withholding Tax (non-residents)
The Finance Law specifies that the 20% withholding tax shall also apply to foreign companies obtaining Congolese-sourced income for works entirely performed outside of Congo.
D. Real Estate Tax
A tax rate of 5% is provided (instead of one twelfth of the lease payments due in the course of the concerned year). The tax is now due each quarter.
E. Tax on the Transfer of Funds
The taxpayers’ definition scope is broadened as to include exchange offices in the list of entities required to collect this tax.
- The omission of the amount in contracts with oil companies is now subject to a penalty of 3,000,000 F.CFA (approximatively 5,000 USD);
- Specific penalties related to transfer pricing are now set to a maximum of 10,000,000 F. CFA (approximatively 16,000 USD); and
- General increase of penalties.
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