The People’s Republic of China (“China”), like other countries such as France, Italy, Mauritius, has signed a Tax Agreement with the Republic of Congo (“the Congo”) to Prevent Double Taxation and Tax Evasion Between the Two States (“the Tax Convention”) , as of September 05, 2018, on the sidelines of the China – Africa Summit.
In recent years, China has deployed in Africa for its conquest in the context of the win-win partnership, established primarily through investments made in various sectors, especially natural resources and infrastructure. Chinese companies have been interested in research and exploitation of hydrocarbons, precious minerals, and wood. The Republic of Congo has not been forgotten in this drive to partner Africa for the purposes of investment.
In addition to the exploitation of natural resources, the exploits of Chinese companies in Congo includes the construction of the Congolese Parliament building and the Sino-Congolese Bank for Africa (BSCA) whose inauguration took place at the beginning of the year 2018.
The signing of a Tax Agreement allows the signatory parties to set the general objective of combating tax fraud through the facilitation of cross-border trade and investment.
Apart from this major objective, the Tax Convention also aims at the elimination of double taxation, the elimination of discrimination against nationals, foreigners and non-resident, the prevention of tax evasion or double non-taxation and the facilitation of administrative cooperation between contractors.
The fight against tax fraud involves laying down the principles governing the determination of the tax residence of (taxable) persons and the distribution of the right to tax their income.
We note that the signed Tax Agreement is a guarantee to investors in their cross-border transactions and an important tool for facilitating Chinese investments in the Congo, and thereby participate in the growth of the Congolese economy.
In our next publication, we will return to the essential clauses contained in the said Tax Convention.
By Antoine Luntadila Kibanga et Willy Bashiya Mbayi