To round up this series, it’s very important for taxpayers to know that they’re obliged to file in their statistical & tax returns every year at the end of the fiscal year.
Many new business owners get confuse with exemption from the business license tax and exemption form 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.
If this is the first on this series you’re reading or you’ve missed any, then you checkout the previous posts.
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).
Taxpayers in Cameroon are assessed according to three systems:
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:
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 of 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.
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.
Thanks for following this series from the beginning to now. Don’t hesitate to get in touch with us or meet a tax advisor of your choice for any questions on the above.
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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.