One of the most fundamental aspect of any business is taxation management. This means you have to keep it up-to-date, meet up with compliance requirements and so on. It is a complex area and requires you to understand both the legal requirements and a business’ needs. Tax administration is also a very important component of financial planning.
The Cameroon tax system like other tax systems is constantly changing thereby increasing the complexity in the planning of income tax in the overall financial plan. A good tax planning will help preserve a considerable amount of wealth for companies or individuals which if attention is not paid will be lost.
Tax administration in Cameroon as in most economies in the world is divided into two – individual and corporate.
Since January 2014, the tax administration may send to natural or legal persons paying taxes or duties a pre-filled tax return form for collected revenue or any other taxable item showing the amount of tax owed as stated by the rules and regulations put in place. For employees, the employer withholds the taxes payable at source. In this case, the employer is the one held responsible for paying the tax to the authorities.
Failure to comply with the tax regulation or legal requirements, may lead to a control process carried out by the authorized tax agents. It should be noted that tax agents have their limit and can not control just any type of tax. There are specific conditions that have been put in place to govern such controls.
The tax payer is bound to present at the request of the tax authority all needed accounting documents and records when necessary. It should be noted that accounting documents should be kept for a period of at least 10 years.
The taxable period in Cameroon is the calendar year. Taxpayers are expected to submit to the tax administration their annual revenue returns from businesses carried out during the period serving as the tax base on or before March 15. The tax return during presentation must conform to the requirements of the OHADA accounting system.
In Cameroon, the tax system applied is declarative even though the tax administration may send to the tax payer a pre-filled tax return form for revenue collected or other taxable item with the tax amount owed as per the laws and regulations put in place.
Any taxpayer who thinks they have been wrongfully taxed or overtaxed under the pre-filled tax return process could request for correction. This is done through the competent tax center and within a month of the receipt of the faulty tax return. After the collection notice (CN), the taxpayer and tax authorities have up to 30 days in order to decide the final taxes that have been established. Failure on the part of the taxpayer to pay within 15 days of the collection notice or respond to the pre-filled tax return will mean they have accepted the terms.
If you plan to start a sole-proprietorship business in Cameroon, this post, Small Business Creation in Cameroon – The One-stop Shop will be helpful.
Taxpayers can pay a 2.2% or 5.5% monthly minimum tax on turnover realized during the month. This is paid to the tax authorities on or before 15th of the following month.
The customs administration or the buyer can also withhold at the source taxes on purchases and imports that are destined to be resold. This advance tax payments can be 0.5%, 2%, 10%, 14%, 15.4% or 20% depending on the buyer or importer’s tax regime. Don’t hesitate to check out my post on How to Start a Business in Cameroon – What It Takes.
Note that at the end of the financial year, the balance of the corporate income tax should be paid on or before March 15 following the end of the fiscal year. This is done when submitting the tax return.
In the case of a surplus tax payments, this can be regulated by offsetting future taxes of same nature to be paid. If the business stops activities, the excess payments of corporate income tax shall be reimbursed by the tax authorities.
There is a special reimbursement procedure in the case of VAT to be done by the general tax controller under certain conditions. This is done by categorizing the taxpayers to benefit from the VAT credit refund into low, medium or high risk company.
You might be in need of certain legislature on business or taxation in Cameroon. You can check this Document Archive For Cameroon those Interested in or are Doing Business in Cameroon.
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This content has been prepared for information purposes only. It is not intended to provide, and should not be relied on for, tax, accounting or legal advice. You need to consult your own tax, accounting or legal advisors before engaging in any transaction.