Corporation Tax
Resident companies
- The corporate tax rate is 35%. Taking into account the 10% surcharge, the effective rate is 38.5%.
- Resident corporations are taxed on their worldwide income. An entity is deemed to be resident if its registered office, centre of activity or management is located in Cameroon or if it has resident employees in Cameroon that provide services to customers.
- Taxable profits are determined after deducting allowable expenses and charges. Expenses equal to or exceeding XAF 1 million are not deductible if paid in cash.
Non-resident companies:
- An entity is deemed to be resident if its registered office, centre of activity or management is located in Cameroon or if it has resident employees in Cameroon that provide services to customers.
- Non-resident companies are taxed the same rate but only on Cameroon-source income.
Newly listed companies (DSX):
- The basic rate is reduced to 30% for the first 3 years a company is listed on the national stock exchange.
Exchange Control
All transfers of funds outside the Central African Economic and Monetary Community (CEMAC, consisting of Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea and Gabon), including loans obtained by resident companies from abroad and the solicitation of foreign securities in the CEMAC zone, must be declared and are subject to special control measures for statistical purposes.
Transfers of amounts in excess of XAF 5 million must be lodged with an authorized intermediary (i.e. a bank authorized by the central bank).
Documentation must be submitted to the authorities for currency transfers for the settlement of imports in excess of XAF 100 million.
All foreign direct investment exceeding XAF 100 million is subject to prior notification to the Ministry of Finance.
Expatriate employees may apply for authorization to repatriate 20% of their net earnings on a regular basis. However, if the family and dependents live outside the CEMAC zone, permission may be obtained to repatriate up to 50% of net earnings. Any savings accumulated by expatriates may be repatriated upon departure from Cameroon.
Capital Gains Tax
Capital gains are treated as ordinary business income and taxed at normal company tax rates.
Capital gains arising from the gratuitous allocation of shares, founders’ shares or debentures on the merger of limited liability companies or limited partnerships with share capital also are excluded, provided the company resulting from the merger has its registered office in Cameroon or another CEMAC state.
Upon the assignment, transfer or cessation of a company within 5 years following its creation or purchase, net capital gains will be assessed at half their value (1/3 of their value after more than 5 years).
Dividends
Dividends received by a resident company from a resident or non-resident company are subject to corporate income tax. The recipient may offset any Cameroon tax withheld from the dividends against its corporate income tax liability.
Foreign tax paid on dividends derived from a non-resident company is not creditable against Cameroon corporate income tax unless specifically provided for under a tax treaty.
The treatment of dividends received by corporate shareholders differs when the shareholder: (1) owns at least 25% of the shares in the affiliate; (2) the head office of the shareholder and its affiliate are located in Cameroon or another CEMAC state; and (3) the shares remain registered in the name of the shareholder for at least 2 consecutive years. Shareholders satisfying these requirements are entitled to be taxed on 10% of the net dividends received. Where the payer and recipient disclose the dividends in their respective financial statements in the same year, the withholding tax paid by the affiliate may be set off against the withholding tax payable by the shareholder on any dividend distributions subsequently made by such shareholder.
A withholding tax of 16.5% (15% withholding tax and a 10% local surcharge) applies to dividends paid to a resident and a non-resident. The rate may be reduced under a tax treaty.
Interest
A withholding tax of 16.5% (15% withholding tax and a 10% local surcharge) applies to interest paid to a non-resident. The rate may be reduced under an applicable tax treaty.
Royalties
Royalties paid to a non-resident are subject to a 15% withholding tax (the 10% local surcharge is not applicable), unless reduced under a tax treaty. However when such amounts are paid to a firm located outside the CEMAC that participates in the management of a Cameroon firm in which it holds shares, the royalties will be considered as sums accruing from the distribution of profits and subject to the 16.5% withholding tax.
Payroll Tax and Social Security
The employer is required to make monthly contributions to the Housing Loan and Employment Fund in an amount equal to 2.5% of the total amount of the salary and fringe benefits.
The employer must pay 11.2% of the basic pay, allowances and benefits of its employees monthly to the National Social Insurance Fund (capped at XAF 300,000 per month). The employer also must contribute 1.75%, 2.5% or 5% of total salary, depending on the risk category of activities carried out by employees. Paid by both the employer and the employee. The employer must pay 11.2% of the basic pay, allowances and benefits of its employees monthly to the National Social Insurance Fund (capped at XAF 300,000 per month). The employer also must contribute 1.75%, 2.5% or 5% of total salary, depending on the risk category of activities carried out by employees. Paid by both the employer and the employee.
Value Added Tax
- Taxable transactions – VAT is levied on the supply of goods; the provision of services; the import of goods; real estate activities; construction and delivery of buildings by real estate professionals; the sale of second-hand goods and equipment by professionals; transfers of non-exempt assets; and the leasing of underdeveloped land and unfurnished premises by real estate professionals.
- Rates – The effective standard VAT rate is 19.25% (i.e. a 17.25% VAT and 10% surcharge). Exports are zero-rated. Certain essential goods are exempt.
- Registration – All corporate businesses with taxable turnover are required to register. Non-resident VAT payers are required to appoint a solvent resident representative to be jointly responsible for the payment of VAT and the discharge of other VAT obligations.
- Filing and payment – VAT returns, and any tax payable, are due by the 15th of each month following the month in which the transaction took place. Late payment incurs interest penalties at a rate of 1.5% per month, up to a maximum of 50% of the principal liability. Fines are levied for various omissions in discharging VAT obligations.
Losses
Losses may be carried forward for up to 4 years, but may not be carried back.
Stamp Duty
Various stamp duties apply to contractual obligations and transfers or leases of property at rates ranging from 1% to 15%. Fixed stamp duties are levied on motor vehicle licenses, advertising materials, passports, visas and bills of lading.
Real Property Tax
Property tax is payable annually on real estate for which an ownership certificate or an administrative or judicial order has been issued. Tax is charged at 0.1% of the assessed property value, with the usual 10% local surcharge.
Personal Income Tax
Graduated Scale
A single income tax, based on graduated rates, applies to the net total income derived from various categories of income. Income categories include: salaries, wages, pensions and life annuities, income from stocks and shares, income from real estate, profits from handicraft, industrial and commercial activities, profits from agricultural activities and profits from non-commercial and related professions.
Progressive rates are imposed from 10% to 35%. A surcharge of 10% of the principal tax also is levied on the rates.
Residents taxed on worldwide income. Non-residents taxed on income accrued in or derived from Cameroon. An individual is resident in Cameroon if his/her principal center of interest or business is in Cameroon or place of abode is in Cameroon (i.e. more than 183 days in a tax year are spent in Cameroon).
Allowable deductions include business expenses, social security contributions, professional expenses (fixed at 30%) and a real estate deduction (fixed at 30%).
