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Tax information – Republic of Congo

Tax information – Republic of Congo

DECLARATION OF THE OPENING OF A BANK ACCOUNT WITH THE CONGOLESE TAX AUTHORITIES BY ALL COMPANIES.

Many companies in operating in the Republic of Congo neglect the requirement to report the opening of their bank accounts to the tax authorities, a misstep in tax management that can result in significant tax consequences. This article aims to underscore the importance of complying with this obligation for businesses.

  1. The obligation to declare bank accounts to the tax authorities.

Article 391 bis of the General Code of Taxes of the Congo of the year 2024. (General Tax Code) , requires all companies and related entities to:

  1. declare the opening of any commercial account with a bank or any other credit institution to the local tax authority within fifteen days of the account being opened. In addition, closure of such accounts must be declared within the same timeframe; and
  2. declare all commercial accounts held by the company within the first 20 days of every year.

These declarations are made using a prescribed form, which requires the company to provide the following information:

  1. the date the commercial account was opened;
  2. the financial institution where the account was opened;
  3. bank details (RIB),
  4. International Bank Account Number (IBAN); and
  5. unique identification number (NIU).
  • Payments Exempt from Taxation

Certain transactions within the Congo are exempt from taxation. Article 113 of the General Tax Code, 2024 stipulates that donations, gifts, and subsidies do not constitute deductible expenses from taxable profits. However, payments to state-recognized research and development organizations, philanthropic, charitable, or social organizations located in the Congo are deductible up to 0.5 per thousand (0.5 ‰) of sales excluding tax, provided they are justified.

expenses or payments of any kind made in cash amounting to 500,000 FCFA or more per beneficiary are not deductible from taxable income. However, such transactions are required to be conducted through banks or other financial institutions (either by cheques or transfers), which regulation was introduced to promote the use of banking institutions and enhance transparency. The repercussions of not following this regulation include the company’s expenses being rejected by tax authorities during audits.

  • Penalties :

Article 391 bis of the General Tax Code outlines the penalties for non-compliance with the reporting obligation:

  • Rejection of Charges for Sums Paid Through Undeclared Accounts: Companies will pay corporate income tax on these rejected amounts, as per article 109 of the General Tax Code.
  • Fine of 3,000,000 FCFA for Exempt Companies: Article 107(a) of the General Tax Code states that the following entities are exempt from corporate income tax:
    • Agricultural cooperatives;
    • Agricultural unions;
    • Mutual aid societies and unions;
    • Local authorities;
    • Public-interest companies or organizations in charge of rural development;
    • Cooperative school societies;
    • The Bank of Central African States (BEAC), is subject to a special tax regime.

Conclusion

Adhering to the requirement of declaring bank accounts to the Congolese tax authorities is not just a legal obligation but a crucial aspect of responsible tax management for companies operating in Congo. Non-compliance can result in severe penalties, including hefty fines and the disallowance of expense deductions, leading to significant financial repercussions. It is imperative for companies to prioritize compliance with these regulations to avoid adverse consequences and ensure smooth tax operations. By fulfilling this obligation diligently, businesses can maintain transparency, accountability, and regulatory compliance in their financial dealings, thereby contributing to a more robust and sustainable business environment in Congo.

Author: Njikam Pekassa Oudou, Senior Tax Consultant CLG – Congo .

Do not hesitate to reach out to our team of lawyers and business advisors at CLG for any inquiries. We seamlessly guide our clients through Africa’s abundant investment opportunities and stand ready to assist you in fulfilling your reporting requirements.

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