Summary
Summary
The Republic of Congo has introduced a VAT framework for Non-Resident Providers of Digital Services through Finance Law 2024. The online registration portal is fully developed for foreign providers to register for VAT and align with the tax framework.
The Republic of Congo introduced a VAT framework for Non-Resident Providers of Digital Services through Finance Law 2024. The Finance Law 2024 set the structure for the future development of the VAT framework for non-resident providers of digital services through the establishment of the simplified registration portal.
The portal is “fully” developed, and foreign providers of digital services that have customers in the Republic of Congo should register for VAT and align themselves with a specifically designated tax framework.
Republic of Congo VAT on Digital Services
New Framework
The simplified registration Portal, has been accessible for a few months already. Non-resident providers of digital services should register on the online portal developed by the Regulatory Authority for Posts and Electronic Communications of the Republic of Congo(ARPCE.
After successful registration on the portal, the applicant would be in a position to register for VAT and establish a VAT compliance framework under simplified VAT requirements.
Timeline
The Finance Law, which set in motion the “future to be” technical requirements for a simplified registration and tax compliance regime for non-resident providers of digital services, came into force on January 1, 2024. However, the online registration portal has been in the “production” phase for the last few months.
VAT Compliance for Non-Resident Digital Service Providers
Non-resident digital service providers that have customers in the Republic of Congo(consumers and taxable persons) should register for VAT through the online registration portal.
Registration
There is no threshold for registration. From the first taxable supply, non-resident providers are required to register.
Representative
Non-resident providers of digital services may elect to register directly or through a delegated representative through the simplified registration Portal.
Place of Supply Rules
Republic of Congo VAT framework for determining the place of supply rules for digital services is developed in alignment with best practises established specifically for the digital economy. If the local customer acquires the digital service from a foreign supplier(without PE or any sort of physical nexus in the country), and there are at least two conditions met from the list below, the place of supply for remote services is in the Republic of Congo:
- The recipient’s billing address;
- The Internet Protocol address of the device used by the recipient or any other geo-location method;
- The recipient’s bank account details, including the account the recipient uses for payment or the billing address held by the bank;
- The mobile country code of the International Mobile Subscriber Identity (IMSI) stored on the Subscriber Identity Module (SIM) used by the recipient;
- the location of the recipient’s fixed land line through which the service is supplied to the recipient;
- or any other relevant information.
When two or more conditions are met, the non-resident provider of digital service shall treat the transaction as taxable.
B2C Remote Services
Non-resident remote service providers that provide services to local consumers should charge, collect, and remit VAT at the rate of 18 % on each B2C supply.
B2B Remote Services
Non-resident digital service providers should also charge, collect, and remit VAT on B2B supplies.
Scope of digital services
The Finance Law 2024 and Guidelines issued by the Republic of Congo Revenue Authority define the scope of electronic services as follows:
The online supply of e-books, music, games, apps, and software
- Online advertising (Google Ads, Facebook Ads)
- Streaming (Netflix, Spotify, YouTube Premium
- Software and applications (SaaS, subscriptions, downloads)
- Marketplaces and e-commerce (Amazon, Alibaba)
- Cloud and hosting (AWS, Azure)
- Online gaming and betting
- Paid social networks and premium features, Business tools (CRM, accounting, HR, electronic signature)
- VPNs, antivirus and security tools
Digital Marketplace
The e-commerce marketplaces are in scope of the simplified VAT regime.
VAT Declaration and Remittance
Non-resident electronic services providers should file the return using the Simplified VAT Return for Foreign Suppliers, prescribed by the Tax Administration.
The return should be submitted by the 20th day following the quarterly reporting period. The tax payable should be remitted within the same deadline. Also, nil returns should be filed.
The return total could be calculated in foreign currency. The remittance of owed tax could be made as well in foreign currency.
Invoicing
For B2B transactions, NRDSPs should issue a tax invoice in accordance with the General Tax Code.
Penalties
Non-resident digital service providers could face different types of fines and penalties for late registration, late filing, and late payment. Failure to comply with the VAT regime for NRDSPs could result in:
- Late filing penalties as prescribed by the General Tax Code
- Late payment interest calculated at the statutory rate
- Additional penalties for inaccurate declarations or underestimation of VAT
- Criminal proceedings in the event of deliberate fraud or evasion
How to Stay Compliant
The Republic of Congo adopted a simplified VAT registration and compliance tax regime for non-resident digital service providers. The online Portal is fully functional and aligned with the Finance Law 2024, which introduced provisions for the development of the simplified registration regime for NRDSPs.
We have continuously followed the legislative updates concerning the introduction of the VAT regime for overseas providers of digital services.
The advisory role offered by 1stopVAT for these providers extends from understanding the threshold exposure for registration, accountability for VAT, assistance with the return preparation, and remittance of the owed tax.
Where we cannot manage your VAT requirements directly, we have a great network of local tax agents who will take care of this.
In addition to successfully managing your registration, we can offer additional services for digital service providers in the Republic of Congo, such as:
- Assistance with Tax Reporting
- Tax Advisory and Ongoing Tax Management
- Correspondence with Tax Authorities
Non-resident providers of digital services to customers in the Republic of Congo should note that simplified VAT compliance portal is fully operational. Under the Republic of Congo VAT on Digital Services regime, foreign providers of digital services should register for VAT from the first taxable supply.
Author Aleksandar Delic
The VAT regime is structurally developed in accordance with the globally accepted best practices, relying entirely on the simplified registration and reporting framework for non-resident service providers.
Indirect Tax Manager – E-commerce
Frequently Asked Questions
Yes. Non-resident providers supplying digital services to customers in the Republic of Congo must register through the simplified online portal.
The obligation applies to supplies made to both private consumers and taxable business customers.
No. The Republic of Congo does not apply a revenue threshold for non resident digital service providers.
Registration is required from the first taxable digital service supplied to a customer located in the country.
The applicable VAT rate is 18%.
Non resident providers must charge, collect, declare, and remit VAT on qualifying digital services supplied to customers in the Republic of Congo.
Yes. The simplified VAT regime applies to both B2C and B2B supplies.
Foreign providers must collect VAT from private consumers and taxable business customers when the place of supply is treated as being in the Republic of Congo
Registration is completed through the simplified online portal operated by the Regulatory Authority for Posts and Electronic Communications.
A provider may register directly or appoint a representative to complete registration and manage VAT compliance on its behalf.
Non resident digital service providers must file VAT returns quarterly.
The return and corresponding VAT payment are due by the 20th day following the end of the reporting quarter.
Nil returns must also be submitted when no taxable transactions occurred during the period.
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