Have you been planning to move to Cameroon? Are you a foreigner planning to work in Cameroon? Do you want to set up a business in Cameroon? Do you want to know the personal income and corporate taxation rate in Cameroon. If your answer to any of the above questions is affirmative, then you should know that taxation will be a necessity. The personal income tax rate in Cameroon ranges from 10% to 35%. This depends on your income threshold.
The income tax concept of Cameroon is same as that of developed or industrialized countries. The income tax system is divided into two main systems – that for individuals and business entities.
Starting a Business in Cameroon – What It Takes
Types of Taxes and Other Charges in Cameroonian
This can be divided into direct taxes, indirect taxes and other para-fiscal fees or charges
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Direct Taxes – Direct taxes in Cameroon include:
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Corporate Tax
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Personal income tax
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Property tax
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Licenses
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Permits
Indirect Taxes – Indirect taxes in Cameroon includes:
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Value Added Tax (VAT)
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Stamp duties and registration fees
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Special income tax
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Special tax on petroleum products
Para-fiscal charges / fees
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Audiovisual tax
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National Employment Fund (NEF) contribution
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Social contributions
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Municipal taxes
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Download the 2018 General Tax Code for Cameroon
Corporate Taxation in Cameroon
In Cameroon, corporate taxation also takes into consideration the business turn-over. In effect, the turnover tax is borne by the final consumer and has a variable rate – 17% for general rate, 8% reduced rate and ad valorem excise duties at 25%.
Taxes on Corporate Income
Corporations that are resident in Cameroon are taxed on using their worldwide income while non-resident corporations taxed only on income sourced in Cameroon. Corporations that operate in Cameroon and subject to corporate taxation include:
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Businesses that have their headquarter in Cameroon or have an effective management office in Cameroonian
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Businesses that have a permanent establishment in Cameroon or have an effective management office in Cameroonian
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Businesses that have a dependent representation in Cameroonian
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Businesses whose activities form a full commercial cycle in Cameroon
For entities that are located in Cameroon (residents), the corporate income tax is determined with regards to profits earned while for non-residents with permanent establishments, what is taken into consideration is only the transactions that are carried out in Cameroon.
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Net taxable profits is determined after all expenses or charges that are directly incurred during the exercise of the entity’s activities have been deducted. The corporate income tax rate is 33% on profits or 2.2% on turnover. The one that is higher is regarded.
Tax Regime or Tax Systems
The tax system is divided into three regimes and entities are taxed based on the turnover realized.
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Flat Rate Tax System: This is for sole proprietorship who have an annual turnover of less than XAF10,000,000. Exceptions in this case include logging companies, liberal professions and professional officers.
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Simplified Tax System: This includes sole proprietorship and corporate bodies that have an annual turnover of XAF10,000,000 or more but less than XAF50,000,000.
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Actual Earnings Tax System: This is for sole proprietorships and corporate bodies that have an annual turn-over of XAF50,000,000 or more.
Tax payers that are not registered in the tax office are obliged to do an advance payment of 10%. This rate is put at 20% for companies engaged in forestry in the case they don’t have any evidence of possessing an issued logging permit from the competent authority.
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Non-salaried sales agents or their representatives as well as direct network sales agents are also taxed a 10% rate on remunerations paid to them. The 15% tax rate is also applied to non-registered taxpayers that are engaged in import activities. This 15% rate is increased to 20% in the case where the taxpayer engages in the sale of in-bond goods.
There also exist a 2.25 or 5.5% minimum tax on turnover depending on the tax regime of the taxpayer. Some companies have the right to deduct taxes at source. The corporate income tax rate when deducting at source is fixed at 5.5% representing the installment. This is irrespective of the service provider’s tax regime. It is also applied to activities relating to public procurement that amounts to less than XAF5,000,000. Firms that are subject to the actual earnings tax regime pay 15.04% of their gross margin as advance payment.
NB: The tax rates that you find above have the additional council tax in them already.
Personal Income Tax
The personal income tax (PIT) is levied on all those resident in Cameroon. The PIT is based on personal acquired income. This includes expatriates whose source of income is coming from Cameroon. They are made up of
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salaries, wages, life annuities, and pensions
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profits earned by traders, farmers, landlords, artisans and liberal professionals
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income from movable capital and non-trading profits for taxpayers under the simplified tax system
Personal Income Tax Calculation in Cameroon
The personal income tax calculation in Cameroon is subject to international conventions. The following scale is used to apply on net wages, salaries, annuities and pensions:
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10% as from 0 – XAF2,000,000
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15% as from XAF2,000,001 – XAF3,000,000
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25% as from XAF3,000,001 to XAF5,000,000
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35% as from XAF5,000,001 upwards
The additional council tax of 10% is applied to the tax amount calculated.
In the case of taxpayers who earn industrial and commercial profits, non-commercial agricultural profits, the calculated tax shall not be less than 1% of turn-over for the year before.
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Tax Declaration
Taxes are declared at the tax center where the taxpayer is registered. To declare, you go along with your taxpayers’ card and proof of income. You then have to fill in a pre-filled statement that you obtain from the tax office. The same can also be done online. The taxpayers card is valid for two years and renewable. This can be gotten from any or the nearest tax office at your place of residence.
Additional Council Tax
An additional council tax of 10% of the principal of the tax concerned is levied for the benefit of councils. They are applied on the following taxes:
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Personal income taxation
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Company or Corporate taxation
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Value Added Tax (VAT)
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