DRC Law and Practice Contributed by: Serge Nawej Tshitembu, Xavier Huberland, Daniel Yamba and Katerina Papachristou, ProximA International
These sectoral regimes coexist with the Invest - ment Code but are generally considered lex spe - cialis, meaning they prevail in case of conflict or overlap with general investment provisions. However, for integrated projects involving infra - structure or transformation activities beyond extraction, companies may apply under both regimes for complementary approvals. 5.4 Tax Consolidation The Congolese tax system does not allow for fiscal consolidation or group taxation. Each legal entity is treated independently, and there is no provision for tax grouping in the current tax legislation, including the CGI and the Law on Tax Procedures (Law No. 004/2003 of 13 March 2003). 5.5 Thin Capitalisation Rules and Other Limitations Although the general Congolese tax framework does not impose thin capitalisation rules per se, the Mining Code sets out a clear financial ratio: companies holding an exploitation permit must maintain a maximum debt-to-equity ratio of 75:25. This requirement, found in Article 71 of the amended Mining Code, is intended to limit excessive reliance on debt financing and to ensure a reasonable equity contribution from shareholders, thereby protecting the tax base from aggressive interest deductions. In addition to this mining-specific provision, companies incorporated in the DRC are also governed by OHADA law, notably the Uniform Act on Commercial Companies and Economic Interest Groups (AUSCGIE). While OHADA does not set numerical thin capitalisation thresholds, it requires that companies maintain a minimum capital level depending on their legal form (eg, XAF1 million for SARLs, XAF10 million for SAs) and imposes strict solvency and net asset pres -
ervation rules. Under Article 664 of the AUS - CGIE, if a company’s net assets fall below half of its share capital due to accumulated losses, the shareholders must decide whether to dis - solve or recapitalise the company. Failing to do so within the required timeframe may lead to judicial dissolution or liability for the managers. These rules, while not framed as anti-avoidance, act as a safeguard against chronic undercapitali - sation and promote financial discipline. As a result, while thin capitalisation is not broad - ly regulated in the DRC, the combination of sec - toral rules (Mining Code) and OHADA corporate law obligations imposes effective constraints on how foreign and local investors structure the financial leverage of their Congolese operations. 5.6 Transfer Pricing Transfer pricing obligations are governed by the 2015 Finance Law (Law No. 15/003 of 12 Febru - ary 2015) and related instructions from the Gen - eral Directorate of Taxes ( Direction Générale des Impôts ). Companies engaging in intra-group or related-party transactions must justify their pric - ing using the arm’s length principle and maintain contemporaneous documentation. The adminis - tration may audit and adjust the declared value of such transactions if they appear to erode the tax base. An advance pricing agreement mecha - nism exists, allowing companies to secure pric - ing certainty, though it is rarely used in practice. 5.7 Anti-Evasion Rules While there is no general anti-evasion rule for - mally codified, the DRC’s tax administration is empowered under the Law on Tax Procedures to requalify fictitious, simulated or abusive trans - actions. The authorities may disregard legal arrangements lacking economic substance and apply penalties for tax evasion or bad faith, par -
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