Cameroon, Republic of
Resident corporations in Cameroon are taxed on their worldwide income; non-resident corporations are taxed only on Cameroon-source income.
The following shall be deemed to be operating in Cameroon and subject to corporate income tax (CIT):
- Undertakings headquartered in Cameroon or with an effective management office in Cameroon.
- Undertakings that have a PE in Cameroon or with an effective management office in Cameroon.
- Undertakings that have a dependent representative in Cameroon.
- Undertakings that carry out activities that form a full commercial cycle in Cameroon.
The profits subject to CIT are determined with sole regard to profits earned by entities located in Cameroon (for residents) or transactions effected in Cameroon (for non-residents having a permanent establishment [PE] in Cameroon).
The net taxable profits are established after deduction of all charges directly entailed by the exercise of activities subject to assessment in Cameroon.
The total Cameroon CIT rate is 33% for companies with a turnover above 3 billion Communauté Financière Africaine francs (XAF). For companies with a turnover of less than 3 billion CFA francs that meet the additional criteria set by law, the tax rate is set at 27.5%.
Corporate bodies are assessed according to the following taxation systems determined on the basis of the turnover realised:
- Flat rate taxation system: Sole proprietorships with an annual turnover of below XAF 10 million, except for logging companies, professional officers, and liberal professions.
- Simplified taxation system: Sole proprietorships and corporate bodies with an annual turnover equal to or above XAF 10 million and below XAF 50 million.
- Actual earnings taxation system: Sole proprietorships and corporate bodies with an annual turnover equal to or above XAF 50 million.
It should be noted that as of 1 January 2023, the turnover achieved is no longer the criterion for inclusion in the actual system for certain legal entities. The following legal entities are automatically included in this regime, regardless of their turnover:
- New companies in the oil, mining, gas, credit, microfinance, insurance and mobile phone sectors.
- New taxpayers who have been approved for one of the tax incentive schemes (see the Tax credits and incentives [The private investment tax incentive regime] section for more information).
- Public notaries.
Non-profit organisations system: Any public, private, or confessional entity with personality, including foundations, whose goal is not to make profit for distribution among its members and whose activity does not compete with activities of for-profit entities, shall fall under the non-profit organisations system. Such entities include the following:
- International bodies and non-governmental organisations, subject to conventions.
- Public establishments and regional and local authorities, as well as their public utilities boards.
- Companies or organisations recognised as being of public purpose.
- Public low-cost housing agencies.
- All types of de jure or de facto associations, mutual societies, clubs, and private clubs.
- Social welfare and social security organisations.
- Public and denominational educational and health establishments.
- Generally, any organisation with or without legal personality and whose main goal is not to carry out commercial activities.
There is a 2.2% or 5.5% minimum tax in Cameroon based on turnover and depending on the tax regime of the taxpayer. The advance payment shall be 10% for any taxpayer that is not on the register of a tax office. The 10% rate shall be increased to 20% for forestry companies where, in addition, they do not provide evidence of possessing a logging permit duly issued by the competent authority.
The 10% rate also applies to remunerations paid to non-salaried sales agents or representatives and agents of direct network sales. The 15% rate applies to taxpayers not registered with a taxation centre and engaged in import activities. The 15% rate shall be increased to 20% where the taxpayer carries out the sale of in-bond goods.
The rate of deduction at source representing the instalment of CIT is fixed at 5.5%, irrespective of the tax regime of the service provider, for invoices relating to public procurement amounting to less than XAF 5 million.
The advance payment shall be 15.04% of the gross margin for firms subject to the actual earnings tax system and falling under regulated profit margin sectors, subject to the option for the tax regime of common application. In case of mixed activities, there is a mandatory application of the 2.2% rate on the share of turnover relating to the free margin.
A monthly instalment of 1.1% of the turnover of the commercial activities of non-profit organisations shall be paid each month.
This minimum tax is an instalment of CIT. As such, it shall be offset against CIT. The minimum tax is the sole tax payable if it is greater than CIT.
Local income taxes
A local tax of 10%, called Additional Council Tax, generally applies to the following taxes:
- Personal income tax (PIT).
- Withholding tax (WHT) on income from stock and shares.
- Value-added tax (VAT).
The rate provided in this summary for each tax above is therefore inclusive of a basic rate plus 10% surcharge.