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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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.
The business license is due for one year for all corporate bodies and natural persons engaged in a taxable activity as at January 1st. 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.
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Taxpayers who fail to comply or pay their business license contribution shall be liable to sanctions. Below are some sanctions:
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.
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.
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 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.
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.
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:
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 will have to provide the following:
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For additional reading, check out Cameroon Personal Income and Corporate Taxation.
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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.