Reinforcement of the Requirement to Translate Certain Documents

Pursuant to Article 31 of the General Tax Code (Code Général des Impôts), individuals and legal entities must provide the tax authorities with certain documents, principally accounting documents, in order to support the accuracy of the profit/loss reported on their tax returns.

The 2009 Finance Act specifies that companies established outside the territorial centers must transport their accounting documents, including annexes, to the district capital having jurisdiction over these companies for audit or review. If the documents are drafted in a foreign language, they must be translated into French before being filed with the tax authorities.

The new Article 373 ter of the General Tax Code provides for a civil penalty to be imposed on companies that fail to comply with the translation requirement. The amount of the penalty is 2 million CFA* (approximately €3,000).

* CFA = Central African franc

Reinforcement of the Filing Obligations for Oil Industry Operators

Contracts between oil companies and foreign legal entities must be registered with the appropriate government office in the Congo before performance under the contract is begun. Just as documents presented to the tax authorities must be translated into the French language, the 2009 Finance Act provides that the free-of-charge registration provided under Article 126 quinquies of the General Tax Code now requires that contracts drafted in other languages must be translated into French. Failure to comply with this translation requirement is subject to a civil penalty of 2 million CFA (approximately €3,000).

Article 126 quinquies also includes a requirement (paragraph 2-A) that taxpayers must file with the central tax authorities on a quarterly basis, but no later than on the 20th day of the month following the end of the quarter, a list of ongoing contracts. The 2009 Finance Act extends this requirement by requiring oil industry operators to file a declaration providing details on all oil industry subcontractors. Under this provision, the following information, inter alia, must be filed with the central tax authorities:

• The subcontractors’ corporate purpose
• The address and location of all subcontractors
• Their unique identification number
• The date and number of the contract, its term and end date
• The total amount of the contract, specifying the currency of the invoicing
• The numbers, dates and amounts of invoices received during the quarter

The 2009 Finance Act also includes a requirement for the filing of a monthly declaration of the remunerations paid to oil industry subcontractors, specifying the amounts withheld. The creation of a new Article 126 quinquies 2-B specifies that a statement included in the declaration must provide, for each taxpayer:

• The corporate purpose and corporate name
• The complete address
• The unique identification number
• The date, the number and the purpose of the invoice, as well as the amount paid
• The amount of the tax withholding

Failure to comply with these enhanced filing obligations is subject to a specific penalty regime:

• Failure to file quarterly is subject to a penalty of 3 million CFA (approximately €4,600)
• Failure to file the monthly declaration is subject to a penalty of 3 million CFA (approximately €4,600)

To enforce these filing obligations vis-à-vis oil companies, the 2009 Finance Act amends Article 179 of the General Tax Code by adding an extended filing requirement under the conditions set forth in Article 176 of the General Tax Code. Thus, oil companies are required to provide to the divisional inspector of direct and indirect tax contributions, in January of each year, a list of the remunerations paid to subcontractors for the provisions of all services of any kind.

Reduced VAT Rate on Oil Products Imported from Cameroon by Congolese Lumber Companies

The 2009 Finance Act introduces a reduced 5% value added tax (VAT) rate, which replaces the 18% VAT rate, on diesel fuel and lubricants imported from Cameroon by lumber companies established in the Congo.