Obligation to file tax returns in Cameroon
Corporate bodies in Cameroon are obliged to file in their statistical and tax returns at the end of the fiscal year. This is done on or before March 15 every year for the previous year.
The prime determiners for this are your filing status and net income. In Cameroon, taxpayers file their tax returns based on a self-assessment system. This means the taxpayers prepare their annual returns as well as determines their tax liability.
The net taxable profit is established after all charges that are directly involved in the exercise of business activities have been deducted.
Don’t get confused
Many new business owners get confuse with exemption from the business license tax and exemption from income tax.
In Cameroon, a new business maybe exempted from paying the business license tax for at least one year. This does not stop the business from filing their tax returns and paying income tax at the end of the fiscal year.
As of now, businesses are not exempted from paying income taxes. Rather, some incentives have been given to businesses due to the Covid-19 pandemic and the conflict zones in the country.
In Cameroon, every company or natural persons (sole proprietor business with a turnover of more than XAF10 million), irrespective of any conditions, whether they earn income or not, are obliged to file in their tax returns yearly.
This is done on or before March 15 for the previous fiscal year. Cameroon’s fiscal year is the same as the calendar year (January 1 to December 31).
Tax systems in Cameroon
Flat Rate Tax System – this is for sole proprietor businesses with an annual turnover of less than XAF10 million francs. However, there are exceptions like professional officers, liberal professions and logging companies.
Simplified Tax System – this is for sole proprietor businesses and corporate bodies with an annual turnover of XAF10 million and below XAF50 million.
Actual Earnings Tax System – for sole proprietor businesses and corporate bodies with an annual turnover of XAF50 million and above.
Taxpayers in Cameroon are obliged to spontaneously file monthly tax returns and pay a down payment. The income tax down payment is paid at their tax centers after filling special forms provided by the tax authority as seen below:
- Simplified tax system – Those under this tax system file in their monthly tax return and pay a 5% deduction of their turnover on or before the 15th of the month for the previous month. Added to this is a 10% for additional council tax, which makes it 5.5%.
- Actual earnings tax system – for this system, they pay a 2% of the month’s turnover not later than the 15th of the month for the previous month. This amount is increased by 10% to include the additional council tax.
There are exceptions in certain cases, especially for businesses that engage in regulated profit margin activities.
The percentages deducted are considered as down payments and shall be deducted from the annual tax payable. The balance shall be paid on or before March 15 every year.
If down payments paid is in excess, it shall be deducted from future installments. In case the business shuts down, such payments shall be refunded.
Corporate tax rate
In Cameroon, a corporate tax is levied on all profits or income made by natural and legal persons (corporate bodies) – those in the simplified and actual earnings tax system.
The taxable profits to be taken into consideration determined by businesses carried or transactions that take place within Cameroon.
Cameroon has two tax rates presently:
– 28% for businesses with an annual turnover of between XAF10 million and below XAF250 million.
– 30% for businesses with an annual turnover of above XAF250 million
Added to this rate is 10% additional council tax, which gives 30.8% and 33% respectively.
Minimum tax rate
There is also a minimum tax rate of 2.2% or 5.5% in Cameroon depending on the tax regime of the taxpayer and based on turnover.
This minimum tax is declared and paid in installments on or before the 15 of every month for the previous month. It is an advance tax payment. It is offset against the corporate income tax when filing the annual tax returns.
For businesses that are not registered with the tax office, the advance payment is 10% of monthly turnover. This rate is increased to 20% for forestry companies that are not registered with the tax office and also do not provide evidence of possessing a logging permit duly signed by the authority in charge.
The 10% rate is also applied to non-salaried sales agents. A 15% rate is imposed on taxpayers who are engaged in import activities and are not registered with a tax center.
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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.