Business License Tax in Cameroon

All corporate bodies on natural persons, both foreign or national carrying out an economic, commercial, professional or industrial activity within any council area in Cameroon is obliged to pay the business license tax. For you to pay a business license tax in Cameroon, your activity must be lucrative, habitual or is already being carried out.

The business license contribution is assessed on the declared annual or expected turnover of the taxpayer. That is, annual turnover for an existing business and expected for a new one.

The contribution is paid to the tax center where the business is located. The business license contribution is a local tax, so the tax center collects on behalf of the local council where the business’ activity is carried out.

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Who is liable to the business license contribution in Cameroon?

The business license contribution is determined based on the yearly turnover of the enterprise. However, there are some activities that are liable to the business license irrespective of their turnover.

As concerns turnover, for your business to be liable, you need to have an annual turnover XAF10 million and above. For those transporting goods or persons, their business license contribution is determined on the number of seats in the car or the net weight of the car.

For those that deal in petroleum products like filling stations, the tax base is determined by the amount of margin decided by the marketers. For this sector, the business license is issued in the name of the manager of the station and not the name of the owner.

Do you want to know if your business is exempted from business license contribution in Cameroon? Checkout Book Three, Part II, Chapter I Section C. 11 and C12 of the General Tax Code of Cameroon.

Duration

The business license is due for one year for all corporate bodies and natural persons engaged in a taxable activity as at January 1^st. As for those who start activity within the year, they will be liable to this local tax from the first day of the month that they started. An exception is given in the case where the activity by nature, can not be undertaken throughout the year.

New businesses are exempted from paying the business license contribution for the first year of operation. This is extended for one year for companies that are registered in approved management centers.

Taxpayer Obligations

• An obligation to declare the activity within the first 15 days even if you have applied or benefited from exemption. Persons that carry out activities that require a business license need to file in written returns to the tax center with jurisdiction within 15 days following the day the business started. See more on how to obtain a business license in Cameroon.
• The taxpayer is obliged to post the business license in a visible place without which a penalty of XAF10,000 will be issued. The posted business license should be accompanied by the receipt of payment issued
• The business license has to be declared: – Two months that follow the beginning of the fiscal year – Two months that follow the end of the exemption period – For interurban transporters of goods or persons, the business license is declared every 15 working days that follow the end of each semester.
• The payment of the business license is done at the tax center of the taxpayer where the business activity is carried out. A receipt shall be issued after payment.

Recommended Reading: A Preview of Cameroon Tax Administration

Penalties or Fines

Taxpayers who fail to comply or pay their business license contribution shall be liable to sanctions. Below are some sanctions:

Illegal Activity

Those carrying out illegal or prohibited activity are seriously penalized. If you are carrying out an activity prohibited by the law, you will be obliged to pay a business license for the number of years you have been carrying out the activity with a 100% penalty. This does not cancel out other legal actions that could be taken against you by the state. See more about the penalties for carrying out illegal or prohibited activity.

Lateness

If you fail to pay the business license within the prescribed time limit will pay a penalty of 10% per month with a maximum of 30% of the tax due. The prescribed time limit for an existing enterprise is between January 1 and February 28 while new ones are supposed to furnish the required information latest 15 days following the start of activity.

Payment evasion

Taxpayers who fail to pay, yet are engaged in an activity that require a business license are not left out. Once you are discovered, you will be automatically assessed for the entire year. The taxpayer will also be charged a 50% to 100% additional charge depending on your sincerity.

Failure to pay on time

Failure to pay the amounts due during the time period will bring about an immediate sealing of the business without wiping out the penalties. As for transportation businesses, the authority carrying out a control shall impound the vehicle concerned.

How to obtain a business license in Cameroon

A business license is one of the basic requirements you need to carry out a business activity in Cameroon. All corporate bodies or natural persons carrying out a business activity in a local council area must obtain a business license in Cameroon. I had earlier written a post on the business license contribution in Cameroon.

Business license basics in Cameroon

The business license tax in Cameroon is assessed based on the turnover declared by the taxpayer. However, there are some activities that are liable to the business license irrespective of their turnover. Carrying out an illegal or prohibited activity in Cameroon is punishable and anyone caught will pay a business license penalty.

New businesses are exempted from paying the business license contribution for the first year of operation. This is extended for one year for companies that are registered in approved management centers. Checkout my previous post on business license exemptions in Cameroon.

The turnover taken into consideration to calculate the business license contribution is assessed based on:

• New business – the turnover declared on the day activities begin
• At least one year old business – the turnover realized during the previous financial year

Requirements to obtain a business license in Cameroon

Those carrying out an activity that requires a business license are obliged to declare latest 15 days following its start at the nearest tax center. You need to provide the below in order to apply for a business license in Cameroon:

Corporate bodies

Corporate bodies will have to provide the following:

• Business name and date of incorporation
• Registered office address
• Full name, address, date and place of birth of the manager
• Enterprise registration number
• Business location plan showing the town, neighborhood, streets & door number
• Post box number, telephone and email address
• Type of activity and declared turnover
• Lease (rent) contract registration for a new business or a reference of the last tax return if it’s an old business

Natural persons

• Full name, address place and date of birth of the owner
• Full names and address of the father and mother
• Nationality
• Enterprise registration number
• Business location plan showing the town, neighborhood, streets & door number
• Post box number, telephone and email address
• Type of activity and declared turnover
• Lease (rent) contract registration for a new business or a reference of the last tax return if it’s an old business

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For additional reading, check out Cameroon Personal Income and Corporate Taxation.

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