By means of Decree No. 2020-478, of 13 October 2020, the President of the Republic of Congo ratified the Agreement between the Government of the Republic of the Congo and the Government of the People's Republic of China for the elimination of double taxation relating to income taxes and the prevention of tax evasion and fraud. The Agreement aims to promote the economic relations between the two countries and improve their cooperation in tax matters, by eliminating double taxation without creating opportunities for tax evasion.
The Agreement applies to persons who are residents of one or both of the countries. According to the Agreement, the term "resident” means any person who, under the laws of that country, is liable to tax by reason of his domicile, residence, place of management, or any other criteria of a similar nature. This term, however, does not include any person who is liable to tax in that country in respect only of income from sources in that country.
The Agreement applies to taxes on income imposed on behalf of a contracting country or of its political subdivisions or local authorities.
Article 2 of the Agreement sets out as taxes on income, all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of salaries paid by enterprises.
In the case of China, double taxation is eliminated as follows:
- Where a resident in China receives income from the Congo, the amount of tax on such income payable in the Congo in accordance with the provisions of the Agreement may be deducted from the amount of Chinese tax owed by that resident. However, the amount of the credit may not exceed the amount of tax owed in China on this income in accordance with Chinese laws and regulations.
In the case of Congo, double taxation is eliminated as follows:
- Where a resident of Congo derives income which, in accordance with the provisions of the Agreement, may be taxed in China, The Republic of Congo shall allow as a deduction from the tax owed in Congo, an amount equal to the income tax paid in China.