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Africa Tax Landscape

Cameroon

30 Dec 2022

Cameroon's tax landscape overview highlights the country's tax landscape together with other regulatory considerations of setting up an entity in Cameroon.

Doing business in country

Overview of tax system (residence versus source)

Are taxed in Cameroon, persons having their tax home in Cameroon, for their income from Cameroonian sources.

Type of companies that can be set up (e.g., Close corporation, Partnership etc.,)

Private limited and share company.

Requirements for locals to own shares/stake in the company

We can create any type of partnership or capital company, as long as it complies with the conditions required by the uniform act on commercial companies and EIGs.

Corporate income tax

Viable option from a tax perspective (branch versus subsidiary)

The subsidiary is a better option because the branch has a limited life span.

Process of registering and setting up a branch or subsidiary

The procedure for opening a bank account in Cameroon varies depending on the banking institution and the type of account.

To open a current account, go to the bank of your choice with the following documents: an extract from the trade register, the Articles of Association, NIU (registration certificate), a map of the company's site, an initial payment: the amount varies depending on the bank, and for each of the company's representatives: photocopy of the NIC, 02 4×4 photos, map of the company's location, certificate of residence

Lodging of tax returns with the local Revenue Authority

Within four months from the end of the financial year.

Corporate tax rate for branches and subsidiaries

The corporate tax rate is set at 28% with an additional 10% for municipal surcharges.

Tax rules on repatriation of after-tax profits for branch and subsidiary

The funds held by the foreign entity could be raised through dividends from the shares that the foreign company would hold in the capital of the local entity, payments for services that the latter would have performed for the benefit of a local entity, proceeds from the sale of goods in Cameroon, royalties from the leasing of brands in Cameroon.

Withholding taxes applicable

Tax on income from movable capital.

Capital gains tax implications

Yes.

Value-Added Tax (VAT)

VAT rate applied

Common law rate is 19.25% and 0% for exports.

Imposition of VAT

Only individuals and legal entities taxable according to the actual earnings taxation system are subject to Value Added Tax (VAT).

Operations carried out within the framework of an economic activity carried out for consideration in Cameroon, are not included in the list of exemptions provided for by the law, even when the domicile or head office of the real taxpayer is located outside the territorial limits of Cameroon.

System of submitting VAT returns (manual versus automated)

The system is automated.

What are the export requirements that must be adhered to?

Export license (form 1), proforma invoice, final invoice, bill of lading, BL, consignment note or LTA, depending on the mode of transport, shipment note; customs documents if any.

VAT registration requirements

Yes, by the rate of 19.25%.

VAT on electronic services

There are no specific requirements.

VAT registration requirements for the registration of a Group/Branch

Company registration documents and certificates will be required when registering for VAT. There is no group registration in Zambia, each company must be registered separately.

VAT refunds for non-residents

No.

Recordkeeping requirements

None. 

Employees Tax

Tax year for Individuals

Monthly and annually.

Is employees’ tax is collected from employers via payroll?

Yes.

Collection of Unemployment Insurance Fund (UIF) and Skills Development Levy (SDL)

Even though these funds are not available in Ethiopia, the tax authority acts as a collecting agent for pension fund.

Should employers register and file returns with both the Revenue Authorities?

No.

When is the monthly submission and payment of the EMP201 tax return due for each month following the collection?

The personal income tax deducted at source must be paid no later than the 15th of the following month to the tax office of the employer's tax center.

Submission of the employee's tax reconciliation return?

The annual declaration of professional individuals must be made no later than March 15; that of non-professionals no later than 30 June.

Method of calculating individuals tax

The Personal Income Tax is calculated according to a scale fixed by the Law.

Labour law registration requirements for employers

Non-professional taxpayers who receive income from salaries, wages, pensions, life annuities, and/or income from movable capital and property, and in general from any passive income, are required to file an annual recapitulative income tax return by June 30 of each year at the tax center of their place of residence.

Is the system manual or automated?

Electronic filing.

Transfer pricing

Transfer pricing documentation guidelines or regulations

Yes.

Transfer pricing documentation materiality limits or thresholds in relation to transactions or revenue

No.

Statutory deadline for submitting transfer pricing documentation

Yes.

Penalties imposed for non-submission and/or incomplete documentation.

Yes.

International tax

Tax nexus (Permanent Establishment)

Yes.

Effective Management

Yes.

Controlled Foreign Company

Yes.

Exchange control

The control of transfer prices may give rise to administrative and/or pecuniary sanctions.

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