The Congolese Finance Law for 2018 (Law No. 1/2018) was enacted on 29 January 2018. The main new measures, effective as from 1 January 2018, include:
INCREASE OF PENALTIES IN THE OIL SECTOR
- Taxpayers under the deemed profit regime (mainly, oil subcontractors) may be subject to a penalty equal to 150% of the average monthly Corporate Income Tax paid during the previous year for filing null or incomplete salaries’ annual statements;
- Any and each omission or misstatement in the statements that need to be mandatorily filed by oil companies as regards their subcontractors and employees is now sanctioned with a XAF 10,000.00 penalty (roughly, USD 18) per omission / misstatement.
FURTHER CONSEQUENCES FOR FAILURE TO COMPLY WITH TRANSFER PRICING (“TP”) RULES
In addition to the penalties applicable for failure to comply with TP Documentation obligations (which can be as high as USD 19,000.00, roughly), the General Tax Code now states that a percentage of the amounts invoiced to Congolese taxpayers may be reinstated and taxed accordingly, whenever said costs do not comply with the arm’s length principle.
NEW CUSTOMS DUTIES
A new 0.2% African Community Contribution (“Contribution d’Intégration Africaine”) is now imposed on the importation of eligible goods from African Union non-member States.
OTHER SIGNIFICANT MEASURES
- Implementation of the obligation to obtain a tax clearance certificate on a quarterly basis as requirement for the exercise of a number of activities. Penalties for failure to comply with this obligation may be as high as XAF 300.000 (roughly, USD 560 / quarter);
- Reduction of the number of products subject to the VAT 5% reduced rate, including notably certain construction materials;
- Property Tax (“Taxe Immobilière”) exemptions for real estate owned by Chambers of Commerce and premises allocated to the public exercise of cult have been revoked;
- The rate of the special tax on insurances has been increased from 10% to 15%;
- Registration Duties due on the transfer of immovable property have been lowered from 10% to 8%;
- The Property Tax provisions have been modified, and this tax is now equal to 1/12 of the annual rents.
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