CHAPTER III : THE CAMEROONIAN TAX SYSTEM
The Cameroonian concept of income
taxation is the same as in industrialized
countries. There are two main income taxation
systems, one for individuals and the other
for entities.
The turnover is also subject to
taxation : the turnover tax (Taxe sur le Chiffre
d'Affaires), is borne by the final consumer,
with a variable rate (general rate : 17%,
reduced rate : 8%, ad valorem excise duties
: 25%).
I. INDIVIDUAL INCOME TAXATION
Two questions must be answered
regarding foreign individuals: the initial
question is the liability and the second is
the rate.
A) LIABILITY
Three criteria determine whether
an individual is a Cameroonian tax resident.
According to these criteria, one is liable
to individual income tax if :
one's principal income comes from an entity
subject to company income taxation in Cameroon
one's income is deducted from profits made
by the employer in Cameroon
one spends more than 183 days per year in
Cameroon
These rules apply when there is
no double taxation treaty otherwise applicable.
Cameroon has such treaties with the United
States, Canada and France.
B) REGULATION
1. CLASSIFICATION
There are two kinds of individual
income taxes: proportional tax (taxe proportionnelle
sur les traitements et salaires) and progressive
overtax (surtaxe progressive).
a) Proportional Tax (taxe proportionnelle
sur les traitements et salaires)
The proportional tax is based
on the total gross sum of paid salaries and
awarded material advantages deducted by 20%
for professional expenses.
These material advantages are
evaluated in lump sums.
The proportional tax is calculated
at a global tax rate of 6.60 %.
b) Progressive Overtax (surtaxe
progressive)
The net taxable income is built
on the salaries used as a basis for the proportional
tax, deducted by certain expenses.
The net taxable income is divided
into a certain number of shares, while taking
into account the taxpayer's family.
Each share of income is subject
to taxation according to a progressive scale
ranging from 0 % to 60 %.
The progressive overtax owed by
the taxpayer is equal to the tax produced
by the scale and the number of parts.
The progressive overtax cannot
fall under 3,000 FCFA.
2. EMPLOYERS' OBLIGATIONS
Outside the monthly declaration
of paid salaries and deductions that come
with each pay, the employer must also make
an annual declaration of the salaries paid
before July 31st with identification of the
employees and a supply of information permitting
the calculation of deductions. The monthly
and annual deductions are made with the help
of extracts from the staff information document.
3. EMPLOYEES' OBLIGATIONS
The monthly deduction of the proportional
tax and the progressive overtax do not release
the employees from their obligation to annually
declare their income before August 31st.
II. COMPANY INCOME TAXATION
Company income tax must be paid
by the sociétés de capitaux
(limited companies) and by sociétés
civiles (civil partnerships), either when
they have chosen the corporation tax regime
or when at least one of their partners is
a corporation.
Only profits made in Cameroon
by way of industrial or commercial activity
are subject to taxation. This also applies
to foreign companies unless there is a tax
treaty between their country and the Cameroon
avoiding double taxation.
Taxation is established on the
basis of profits made during the former fiscal
year ending on June 30th.
There are two main categories
of company income taxation :
Proportional tax on income floating capital
(PTOFC) - taxe proportionnelle sur les revenus
de capitaux mobiliers (TPRCM)
Corporate tax (impôt sur les sociétés)
1. Proportional tax on income
floating capital (PTOFC) - taxe proportionnelle
sur les revenus de capitaux mobiliers (TPRCM)
There are four categories of income
that are subject to proportional tax on income
floating capital :
a) income distributed by Cameroonian
companies includes :
income-based distributions: all income which
has not been reserved or re-incorporated into
the company
non income-based distributions: independent
sums put at the shareholder's disposal
b) profits made from negotiable
interests ;
c) profits made from investments
;
d) profits made by foreign companies
in Cameroon.
When these companies do not benefit
from a bilateral treaty with the Cameroon,
profits are considered as distributed to foreign
persons.
2. Company Income Tax
Company income taxation can be
classified into two large categories :
a) Company income taxes : the
unified UDEAC tax and the internal production
tax.
The unified UDEAC tax is paid
by industrial companies whose activities extend
to other UDEAC countries. This tax is paid
only once at the last stage of production
The internal production tax is
paid by industrial companies which are of
particular interest to Cameroon's development
b) Specific taxes on certain products,
the rates of which are independent of the
company's income.
