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Decree-Law No. 13/007 of 23 February 2013 amending and supplementing certain provisions of Decree-Law No. 10/001 of 20 August 2010 establishing the Tax on Added Value

President of the Republic,

In view of the Constitution, as amended by Act No. 11/002 of 20 January 2011 on the revision of certain articles of the Constitution of the Democratic Republic of the Congo, especially in its articles 129 and 221;

Considering, as amended and supplemented to date, Act No. 004/2003 of 13 March 2003 on tax reform;

Having regard to Act No. 13/007 of 22 January 2013 empowering the Government;

Revu l’Ordonnance-loi n° 10/001 dated 20 August 2010 establishing the value added tax;

Revu l’Ordonnance-loi n° 001/2012 du 21 septembre 2012 amend et compléter certaines dispositions de l’Ordonnance-loi n° 10/001 du 20 août 2010 portant institution de la Taxe sur la Value Added ;

On the proposal of the Government deliberated in the Council of Ministers,

O R D O N N E:

Article 1:

Sections 6, 8, 14, 15, 17, 18, 19, 38, 39, 41, 42, 45, 61, 64 and 69 of Ordinance-Law No. 10/001 of 20 August 2010 establishing the value added tax are amended and supplemented as follows:

“Article 6:

The delivery of a tangible property consists of a transfer of the power to dispose of that property as the owner, including the transfer made under a requisition of the public authority.

Delivery of tangible property includes:

- the exchange of goods;

- the contribution in society;

- rental-sale;

- the sale in temperament;

- sales of used articles and materials made by professionals;

- disposal of assets;

- exports of goods and similar operations. »

“Article 8:

Services are all transactions other than deliveries of tangible property. They are all activities that fall within the scope of industry lease or business contract, whereby a person is required to perform any work for consideration.

Service benefits include:

- rentals of movable property;

- rentals of furnished buildings;

- operations on intangible property;

- leasing operations;

- the transport of persons and goods, transit and handling;

- operations carried out as part of a liberal activity, studies, advice, expertise and research;

- the provision of telecommunications;

- the supply of water, electricity, gas, thermal energy and similar goods;

- intermediary operations;

- sales to be consumed on site;

- repairs with or without installation of parts and work in a way;

- real estate work;

- rentals of unappointed bare land and bare premises made by persons subject to the value added tax;

- transactions involving the production or delivery of buildings by real estate developers;

- games of chance and entertainment. »

“Article 14:

Legal and physical persons are subject to the value added tax when they earn an annual turnover equal to or greater than 80.000.000 Congolese Francs. However, legal and physical persons whose annual turnover is less than the value-added tax threshold may opt for the value-added tax regime.

The option is granted upon express request to the Tax Administration in accordance with the terms and conditions set by regulation. It is final for two years following the exercise of the option, except revocation of the Tax Administration.

Without prejudice to paragraph 1st, members of the liberal professions are subject to the value-added tax, regardless of their turnover.

When the turnover of a subject-matter becomes less than the threshold set out in paragraph 1, it retains its quality over the two years following the determination of the decrease in turnover.

Where circumstances so require, the Minister with Finance in his or her duties may, by order, change the threshold for subjecting to the value added tax as set out in paragraph 1 above. »

“Article 15:

The value-added tax is exempt, and the following goods and imports are delivered:

1. the sale of used movable property made by the persons who used it for the purposes of their operation when these assets have not opened the right to deduct the tax upon their acquisition;

2. sales made by legally incorporated non-profit associations where such transactions are social, sporting, cultural, religious, educational or philanthropic in accordance with their purpose;

3. sales and transfers by the State, the provinces, decentralized territorial entities and public bodies that do not have the industrial and commercial character under the conditions defined in article 13, paragraph 3 above;

4. sales and imports of official stamps or timbrate papers;

5. import of bank notes, inputs, equipment for the manufacture of monetary signs and their spare parts made exclusively by the Institute of Issue;

6. sales and imports of agricultural equipment for agriculture based on a list determined by regulation;

7. transactions for the disposal of buildings by persons other than real estate developers and subject to registration rights;

8. the importation and delivery of human organs and blood by registered medical institutions or bodies, as well as the importation and supplies of prostheses;

9. import and sale of fishing vessels and nets;

10. the importation and acquisition of pharmaceutical products for the prevention, diagnosis and treatment of diseases, packaging of pharmaceuticals and pharmaceutical inputs, the list of which is set by regulation, carried out by the pharmaceutical industry, and the importation and acquisition of medical equipment;

11. import and sale of nets;

12. the importation and acquisition of equipment, equipment, reagents and other chemicals intended exclusively for the prospecting, exploration, research and construction and development of the mining and oil project, before operation;

13. import of:

- non-commercial samples that are considered by the Customs as negligible value and are used only to search for orders of goods of the kind they represent;

- movable property, excluding industrial or commercial equipment, for the personal use of a person or family members who are brought to the Democratic Republic of the Congo at the same time as that person or at another time for the transfer of his residence;

- property collected by succession by a person having, on the date of the death of the cujus, his principal residence in the Democratic Republic of the Congo, provided that such property has been assigned to the personal use of the deceased;

- awards to persons with their residence in the Democratic Republic of the Congo, subject to the filing of supporting documents deemed necessary by the Customs;

- coffins containing mortal remains and funeral urns containing ashes of incinerated remains, as well as ornamental objects accompanying them;

- produced for testing, provided that the quantities do not exceed those strictly required for testing and that the products are fully consumed during testing or that the non-consumed products are re-exported or processed under customs control so as to remove any commercial value;

- donations, bequests or materials provided free of charge to the State, the provinces, decentralized territorial entities and public law bodies;

- Baggage of travellers not liable to the duties and taxes provided by customs legislation.

14. sales of original works of art by the creative artist;

15. import and sale of coffins. »

“Article 17:

The following services are exempt from the value added tax:

1. the composition, printing, import and sale of newspapers, books and periodicals, excluding advertising revenue;

2. the rental of books, periodicals and other magnetic materials containing information of a scientific, educational, cultural or religious character, as well as services provided to library readers, archives and documentation services;

3. recipes related to visits to historical monuments and national museums, zoological and botanical parks

4. tuition and pension fees collected in the normal course of the activity of national educational institutions regularly authorized, as the case may be, by the Minister with primary, secondary and vocational education or higher and university education in his or her duties;

5. examinations, consultations, care, hospitalization, analysis and medical biology for humans;

6. transport of the sick and injured by means of transport specially equipped for these purposes;

7. services made by funeral pumps and body transport;

8. benefits made in the course of their normal activities by legally constituted non-profit associations, where their non-subjection does not result in distortion under the conditions of competition;

9. the following services relating to aircraft for airlines whose services to and from abroad represent at least 80% of the total service they operate:

- landing and takeoff;

- use of lighting, parking, mooring and aircraft shelter devices;

- use of facilities for the reception of passengers and goods;

- use of aircraft fuelling installations;

- technical operations related to the arrival, parking and departure of aircraft;

- use of air navigation support devices, the implementation of mechanical, electrical or pneumatic means for the implementation of aircraft engines;

- transportation of the crew to the airport area;

- maintenance and repair of aircraft and aircraft equipment and equipment;

- fire prevention and control service;

- safety visits, technical expertise, removal and rescue of aircraft;

- expertise related to the assessment of aircraft damages and insurance allowances intended to repair the resulting injury;

- operations carried out by aircraft and air officers.

10. the air transportation of persons or goods to or from abroad;

11. the land, lake, river, sea and rail transport of persons or goods for the part of the journey completed outside the limits of the national territory;

12. technical inspection services relating to the weight and quality of goods intended for export by a public body;

13. the following services provided for the direct needs of maritime trade vessels, vessels used for the exercise of industrial activity on the high seas, rescue and assistance at sea:

- driving;

- mooring;

- towing;

- rental of the porticoes;

- stay of the boats;

- use of port facilities;

- assistance and rescue of ships and ships;

- maintenance of the vessel and equipment on board;

- fire prevention and control services;

- use of facilities for the reception of passengers and goods;

- use of equipment intended for ship feeding;

- safety visits, examination of carenes, technical expertise;

- expertise related to the assessment of vessel damage;

14. interest in bank credits to investment, leasing, agricultural credits and bank discoveries;

15. interest in paying deposits made with credit institutions by non-professionals;

16. interest in external borrowing;

17. social or agricultural credit transactions carried out by mutual credit unions, savings and credit cooperatives and other micro-finance institutions. »

“Article 18:

The following activities and benefits are exempt from the value-added tax, as long as they are subject to exclusive specific taxation of any tax on turnover:

1. sales of tickets to leisure events at sports facilities;

2. the rights of entry to a cultural event;

3. the following transactions, subject to registration rights:

- the purpose of the transaction is to transfer ownership or usufruct of immovable property, business or customer funds, from the right to the lease, to the exclusion of the sale of new buildings built by the real estate developers;

- public auctions;

4. wager gains as part of random games. »

“Article 19:

Subject to reciprocity, goods and services for the official use of diplomatic and consular missions and international organizations are exempt from the value added tax. The terms and conditions for the application of this exemption are determined by regulation.

However, under various international conventions in force, international officials, diplomatic and assimilated agents in the Democratic Republic of the Congo are subject to the value added tax incorporated in the price of goods or services. »

“Article 38:

To be deductible, the value added tax must include:

1. in general, on an invoice or other document taking place, duly issued by a subject and mentioning its tax number. However, with respect to invoices issued by foreign providers, this requirement is not required. The disposition of the value-added tax for these service providers is determined by regulation;

2. in case of importation, on the declaration of consumption established by the Customs;

3. in the event of delivery of goods or services to oneself, on an invoice to oneself.

“Article 39:

“Without prejudice to the conditions set out in article 38, item 1, the deductions for exports are definitively acquired only when the actuality of the export is established by Customs documents. »

“Article 41:

Does not apply to deduction, the tax having encumbered:

1. the expenses of accommodation, accommodation, restoration, reception, spectacles, rental of tourism vehicles and the transport of persons excluding the expenses incurred, in respect of their taxable activity, by tourism, restoration and entertainment professionals;

2. the goods and services acquired by the company but used by third parties, the executives or the personnel of the enterprise, excluding the clothing of work or protection, the premises and equipment allocated to the collective satisfaction of the needs of the staff as well as the free accommodation in the workplace of the employee personnel specially responsible for the supervision or custody of the premises;

3. petroleum products, with the exception of fuels intended for resale by wholesalers or acquired for the production of electricity to be sold or to be used by fixed fuels in industrial enterprises;

4. services of any kind including rental, maintenance, repair, relating to goods, goods or goods excluded from the right to deduction;

5. movable objects other than those used by the subject for its operation;

6. buildings other than buildings and premises for professional use;

7. ceded goods and services rendered free of charge or at a price less than the cost of return, as commissions, salaries, rewards, bonuses, gifts, whatever the quality of the recipient, except when it comes to advertising objects of low unit value excluding tax.

“Article 42:

Do not also deduct:

1. The value-added tax on vehicles or equipment, whatever their nature, designed or arranged for the carriage of persons, constituting capital assets, as well as the value-added tax on their rental, spare parts and accessories or services related to these same goods.

However, the above exclusion does not concern:

- road vehicles with ten or more seating places, driver included, and used by companies for the exclusive transport of their personnel;

- vehicles or equipment acquired by public passenger transport companies and assigned exclusively to the realization of such transport;

- special vehicles acquired by car rental companies.

2. Transportation of persons and incidental operations to the said transport, excluding the transport carried out, either on behalf of a public passenger transport company or under a permanent contract of transport by the companies to bring their personnel to the workplace. »

“Article 45:

The pro-rata provided for in section 43 above shall be determined on an interim basis, depending on the income earned in the previous year, for existing or projected revenues and products of the current year, for new ones.

The final prorata was arrested by 31 March of the following year. The deductions made are regulated accordingly at the following time.

Forecasting pro-rata can only be accepted for existing companies on the basis of the final pro-rata of the previous year as the basis for it, or for new companies, on the forecasting elements of accounting. »

“Article 61:

In the event of importation, the value-added tax must be declared and paid prior to the removal of the goods. »

“Article 64:

Without prejudice to the provisions of Article 63 above, exporters, companies making heavy investments and those in cessation of activities may, upon express request to the Tax Administration, obtain the reimbursement of their tax credit resulting from the acquisition of movable goods and services.

By heavy investment, it is necessary to hear the assets acquired in the new state necessary for the operation of the company and whose value of the project is at least equal to 1.000.000.000 of Congolese Francs.

The amount of the value-added tax to be refunded is limited to the amount of the value tax calculated at the normal rate on the amount of exports made during the month.

Those who make heavy expansion and modernization investments may apply for reimbursement of their value-added tax credit within the tax limit that has increased the capital assets referred to in paragraph 2 above within three months of the acquisition.

Where circumstances so require, the Minister with Finance in his or her duties may, by order, adjust the amount in the preceding paragraph. »

“Article 69:

The absence of a declaration of subjugation with the Tax Administration within the time limit is punishable by a fine of 500,000 Congolese Francs. »

Article 2:

Article 44 of the Order-Law No. 10/001 of 20 August 2010 establishing the value-added tax is deleted.

Article 3:

It is added to Legislative Ordinance No. 10/001 of 20 August 2010 on the institution of the value-added tax an article 59 bis, an article 62 bis and an article 74 bis as follows:

“Article 59 bis:

Any transaction between subject-matter of the value-added tax in the amount of at least 1,000,000 Congolese Francs must be paid by cheque, bank transfer or credit card. »

Where circumstances so require, the Minister with Finance in his or her duties may, by order, amend the amount referred to in paragraph 1 above. »

“Article 62 bis:

The manner in which the value-added tax is collected for the distribution of petroleum products is determined by regulation. »

“Article 74 bis:

Any breach of the obligation under section 59 bis of the Order-Law No. 10/001 of 20 August 2010 to establish the value-added tax is punishable by the loss of the right to deduction from the value-added tax. »

Article 4:

Any earlier provisions contrary to this Order shall be repealed.

Article 5:

This Ordinance comes into force as soon as it is published in the Official Gazette.

Without prejudice to paragraph 1 above, the provisions of article 59 bis shall apply within three months from the date of publication.

Done in Kinshasa, 23 February 2013

Joseph KABILA KABANGE

Augustin MATATA PONYO Mapon

Prime Minister