Company Tax Calculation in Cameroon

In a previous post, I talked about company tax in Cameroon and who is liable to pay. Today, we are going to see company tax calculation in Cameroon. In order to understand this with it, having a review of the Cameroon tax system will be beneficial.

In Cameroon, a company or corporation tax is charged on profits made by natural persons or corporate entities. See what is needed to register a business in Cameroon as natural person (sole-proprietorship).

Company tax calculation

To get the taxable income, you first of all need to calculate the accounting profit which is done by deducting expenses from income. After this is done, you will have to adjust the accounting profit for those transactions that are not tax deductible like depreciation, entertainment, etc.

Refer to the General Tax Code of Cameroon to see what has deductible and what is not. After deductions and reintegrations have been done, the resulting figure is then subject to company tax at the given rates. The tax rate for Cameroon today is 30% plus an additional council tax of 10% of the principal tax rate.

How to calculate company tax in Cameroon

In Cameroon, any fraction of the taxable income that is inferior to 1000frs is written off. For instance, if the taxable income is 33,476,890 fcfa, the amount to be retain for tax purposes will be 33,476,000 fcfa. As I said above, the tax rate is 30% plus an additional council tax of 10% which gives a total of 33%.

The company tax is thus calculated as the final taxable income multiplied by the tax rate.

Company Tax Calculation formulae

Company Tax = Taxable income X 33%

However, this is not the final amount because there are other things to add or subtract in order to get the final figure. This can be seen in table 23 or 24 of the statistics and tax return form.

The tax law in Cameroon imposes a minimum tax rate calculate on not less that 2.2% of the turnover of the year. That is, 2.2% = 1% + 10%(1%). In Cameroon, if the the tax to be paid, 33%, is lower than the minimum tax, what is to be retained by the tax administration will be the minimum tax.

Let’s take this example:

ABC Ltd has a final taxable income of 200,000frs in year N and an annual turnover of 7,500,000frs. Calculate the income tax payable for ABC Ltd.

Company tax = Taxable income X 33%

200,000 X 33% = 66,000 fcfa

Minimum tax = 7,500,000 X 2.2% = 165,000 fcfa

Company Tax < minimum tax which implies that the company tax for Year N will be the minimum tax = 165,000 fcfa.

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