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8.1.1. Corporate Income Tax

The standard tax rate on corporate profits is 30% (reduced from 35%effective from 1 January 2019). However, the tax authorities have notified on 4 April 2019 that as an exceptional measure, taxpayers may apply the lower corporate tax rate of 30% for the tax returns for the fiscal year 2018, provided the tax returns are filed by 30 April 2019.

Under the prevailing schedular system, certain income categories are assessed to tax under separate headings and at different tax rates, as follows:

Dividend income received from resident companies is subject to tax at 20% (90% of gross dividends are excluded from the tax base if withholding tax at the standard rate of 20% has been withheld). The tax on dividends is reduced to 10% for mining companies.

Tax on royalties is withheld at 20% on 70% of the royalties invoiced.

Capital gains are taxable as ordinary income.

Mining Industry

The new Mining Law of 9 March 2018 substantially amended the taxation of mining operations. The sector is now subject to the following taxes (list not exhaustive):

Profit Tax

Mining companies were subject to a profit tax at the rate of 30%. The new Mining Law was expected to raise the rate to 35% but eventually maintained the 30% rate unchanged.

Tax on Windfall Profits

The new Mining Law introduced a new tax on windfall profits. The tax is due if the price of the relevant commodity increases by more than 25% of the price used for the project’s feasibility study. The tax is due at the rate of 50% on the excess profit. Correspondingly, the excess profit thus assessed to the windfall profits tax is not subject to the standard mining profit tax.

Tax on Indirect Transfers of Assets

The new Mining Law introduced a new tax on the indirect transfers of assets. Henceforth, capital gains on the disposal of shares in a company holding a mining or quarry title are deemed to be from DRC sources and taxed in DRC, to the extent the assets of the company which shares are being sold are situated in DRC. If the assets are situated partly in DRC and partly abroad, the tax is due only pro rata to the proportion of DRC assets.  

Mining Royalty

A mining royalty applied at the general rate of 2%. However, the new Mining Law of 9 March 2018 introduced graduated rates for the mining royalty as follows:

  • 1% for industrial minerals and solid hydrocarbons;
  • 1% for iron ore and ferrous metals;
  • 3.5% for non-ferrous or base metals;
  • 3.5% for precious metals;
  • 6% for precious and colored stones;
  • 10% for strategic substances (minerals to be so classified by Decree).

While the law provides that the definition of strategic substances will be issued by regulations, it has been announced that it includes, in any case, cobalt and coltan.

The mining royalty is deductible for profit tax purposes. It is, however, unsettled whether it is also deductible for the purposes of the new tax on windfall profits.

Regulations on Foreign Exchange Rules

Effective from 29 January 2019, new rules on foreign exchange transactions are applicable under the Mining Law of 9 March 2018. The regulations require mining companies to repatriate 60% of foreign earnings from export sales in a DRC bank account within 60 calendar days. As soon as the foreign debt has been amortized, 100% of foreign earnings must be repatriated.

Surface Duty on Mining Exploration Concessions

Application Period Duty in USD per Hectare
First year 0.02
Second year 0.03
Third year 0.035
Fourth and following years 0.04

Surface Duty on Mining Exploitation Concessions

Application Period Duty in USD per Hectare
First year 0.04
Second year 0.06
Third year 0.07
Fourth and following years 0.08

Micro-Sized & Small-Sized Companies

Companies with an annual turnover less than CDF 10 million are micro-sized companies and companies with annual turnover between CDF 10 million and CDF 80 million are small-sized companies.

Micro-sized companies are subject to an annual lump-sum tax of CDF 50,000.

Small-sized companies are subject to CIT at the following rates:

  • 1% of turnover for the supply of goods
  • 2% of turnover for the supply of services

In the event of business termination, companies are required to pay a lump-sum amount of:

  • CDF 500,000 for large companies.
  • CDF 250,000 for medium-sized companies.
  • CDF 30,000 for small-sized companies.

Alternate Minimum Tax

The minimum tax is 1% of the yearly turnover for companies other than micro-sized and small-sized companies.

Further, the minimum tax applies to loss-making companies and companies with CIT of less than 1% of turnover. Effective 1 January 2019, minimum tax paid by loss-making companies can be carried forward and deducted in subsequent years.

  • CDF 2.5 million for large companies
  • CDF 750,000 for medium-sized companies
  • CDF 30,000 for small-sized companies

Turnover includes any credits on the income statement in the nature of income or gain.