Capital Gains Taxation in Congo
Definition of Capital Gains
In Congo, capital gains are defined as profits or gains derived from the disposal of capital assets. Capital assets include:
- Real estate properties
- Stocks and shares
- Bonds and debentures
- Business assets
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains in Congo are taxed at a flat rate of 15%. However, certain capital gains may be exempt from taxation, such as gains derived from the sale of a principal residence or gains realized by non-residents on the disposal of Congolese assets.
Legal Framework
The taxation of capital gains in Congo is governed by the following laws:
- Tax Code of Congo (Article 14): Defines capital gains and outlines the general rules for their taxation.
- Decree No. 007/2018 of 26 January 2018: Specifies the tax rates applicable to capital gains.
Policy Objectives
The Congolese government's policy objectives behind the taxation of capital gains are to:
- Generate revenue for the government
- Encourage investment and economic growth
- Ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals
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