Personal Income Tax(PIT)

Personal Income tax (PIT)

Who is liable?

  • Residents, for their worldwide incomes.
  • Nonresident employees who work in Congo more than two weeks a year without discontinuity, are subject to tax on their Congolese-source income, regardless of where their employers are resident.
  • Under the double tax treaty between the Republic of Congo and France, nonresident French employees become taxable in Congo after 183 days.
  • Individuals are considered resident if they have an accommodation in Congo, either as owners or as tenants with leases for at least one year, or if they otherwise maintain their principal residence in Congo.

What type of activity is subjected to PIT?

  • Salaried activity including benefit in kind (Tax Withheld at source)
  • Self-employed individuals (handicrafts, commercial, professional, and agricultural)
  • Professional ministerial officers and liberal professions
  • Investment incomes (dividend, interest on loan savings accounts, etc….)
  • Capital Gain

Taxable income includes all remuneration or compensation paid for services provided, including but not limited to receipts, advances, interest and gains directly related to the activities.

  • It is calculated on an accrual basis, with a possible option for a deemed-profits system if revenuer does not exceed a certain amount.
  • Taxable income equals the difference between amounts received and expenses paid during the calendar year, including gains or losses from the sale of professional assets.
  • Individuals may claim a deduction for professional expenses equal to 20% of gross salary after deduction of social contributions.

Benefit in kind rate: 

Benefit

Rate(%)

Comments

Accommodation

20*

*Some restriction on the determination basis exists, actual value may be considered rather

Domestic servants

7

Utilities

5

Food

20

Car

3

Phone

2

Some PIT highlights

  • Employers must file an annual statement (DAS) of salaries by 31st of January following the end of the preceding year.
  • The above DAS also includes remuneration paid companies or persons providing services, rent, vacation fees, fees of more than 5,000 XAF
  • The taxable portion of gains from the disposal of real property is the difference between the sale price and the revalued purchase price. Rate is reduced by 5% or 3% depending for the land if it’s developed or not, on the year of ownership.
  • The tax is levied at progressive rates, up to a maximum rate of 40%
  • Income is taxed taking into account the family coefficient, which adjusts the taxable base progressively to the number of family members.
  • Non-residents are subject to withholding tax at source at a rate of 20% on services provided in the Congo.
  • This rate does not apply to French residents under the France-Congo Tax Convention.

 What are the PIT regimes?

Tax regime applicable to CIT and PIT are:

Regime

Revenue (XAF)

Type

Activity

Lump sum

Less than or equal to 60 million

VSC

Trading

Less than or equal to 40 million

VSC

Craft industry

Less than or equal to 30 million

VSC

Services

Between 60 and 100 million

SC

Trading

Between 40 and 100 million

SC

Craft industry

Between 30 and100 millions

SC

Services

Actual simplified

Greater than 100 million and less than 2.000.000.000 billion

Actual Normal

Over 2.000.000.000 billion

VSC: Very small companies

SC: Small companies

What are the deductions?

  • Expenses necessary to carry on the activity, such as personnel and rental expenses
  • Medical expenses with some limitations
  • One plane ticket per year for the individual and his or her family
  • Family, dismissal, and retirement allowances, limited to XAF5,000 for family allowance per child.
  • Depreciation, Provisions for losses and expenses
  • Interest on loans from shareholders
  • Certain taxes, including business tax, license fees and tax on wages

PIT general Rates: 

Taxable income

Rate

Exceeding

Not exceeding

XAF

%

0

464.000

1

464.000

1.000.000

10

1.000.000

3.000.000

25

3.000.000

+

40

Personal allowances table: 

Type of allowance

Number of Allowances

Single, divorced or widowed individual with no children

1

Married with no children, single or divorced with one child

2

Widowed or married with one child

2.5

Each additional child

0.5

  • No more than 6.5 allowances may be taken.
  • Under this system, taxable income is divided by the number of family allowances to which the taxpayer is entitled.
  • Tax is then computed for one allowance and multiplied by the number of family allowances.

Others PIT Related:

Tax

Basis

Rate

Contributor

Periodicity

Unique tax on salary

Gross salary + Benefit in Kind

7.5%

Employee

Monthly

Last Update: 29 of July 2021

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