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Cameroon

Country Name: Republic of Cameroon
Currency: Central African CFA Franc (XAF)
Primary Tax Authority: Directorate General of Taxes (Direction Générale des Impôts, DGI)
Key Legislation:

  • General Tax Code
  • Value Added Tax (VAT) Law
  • Customs Code
  • Investment Promotion Act
  • Tax Procedures Law

Fiscal Authority Allocation

Centralized Fiscal System:
Cameroon operates a centralized tax system, with the Directorate General of Taxes (DGI) responsible for administering and collecting taxes, including corporate income tax (CIT), personal income tax (PIT), value-added tax (VAT), and customs duties.

Corporate Income Tax (CIT)

Standard Rate: 30%
Cameroon imposes a corporate income tax rate of 30% on resident companies and non-resident companies with a permanent establishment in the country. An additional local tax surcharge of 10% on the CIT applies, bringing the effective tax rate to 33%.

Corporate Forms and Taxation:

  1. Resident Companies: Taxed on worldwide income.
  2. Non-Resident Companies: Taxed only on Cameroon-sourced income.

Exemptions and Incentives:

  • Investment Incentives: Under the Investment Promotion Act, companies investing in key sectors such as agriculture, infrastructure, energy, and technology can benefit from tax holidays, reduced CIT rates, and customs duty exemptions.
  • Free Trade Zones: Companies operating in Cameroon’s free trade zones enjoy CIT holidays, customs duty reductions, and VAT exemptions on imported goods and raw materials for up to 10 years.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 19.25%
Cameroon imposes VAT at a standard rate of 19.25% on most goods and services. VAT applies to both domestic production and imports.

Exemptions:
Certain goods and services, such as unprocessed agricultural products, healthcare, education, and financial services, are VAT-exempt. Exports are zero-rated, allowing businesses to reclaim VAT on inputs used in producing export goods.

Personal Income Tax (PIT)

Progressive Rates:
Cameroon applies a progressive personal income tax system to residents’ worldwide income and non-residents’ Cameroon-sourced income.

Resident Tax Rates for 2023 (Annual Income):

  • Up to XAF 2,000,000: 10%
  • XAF 2,000,001 to XAF 3,000,000: 15%
  • XAF 3,000,001 to XAF 5,000,000: 25%
  • Above XAF 5,000,000: 35%

Non-Resident Tax Rate:
Non-residents are taxed at a flat rate of 15% on Cameroon-sourced income.

Deductions and Allowances:
Taxpayers may deduct social security contributions, pension contributions, and certain personal expenses, such as medical costs and charitable donations, from their taxable income.

Additional Mandatory Contributions

Social Security Contributions:
Employers and employees must contribute to Cameroon’s social security system, which provides pensions, healthcare, and other social benefits.

  • Employer Contribution: 11.2% of gross salary.
  • Employee Contribution: 4.2% of gross salary.

Withholding Taxes

  • Dividends: 16.5% for residents, 16.5% for non-residents
  • Interest: 16.5% for residents, 16.5% for non-residents
  • Royalties: 15%
    Cameroon imposes withholding taxes on payments to non-residents, including dividends, interest, and royalties. Withholding tax rates may be reduced under Cameroon’s double taxation agreements (DTAs).

Transfer Pricing Rules

Cameroon follows the arm’s-length principle for related-party transactions. Companies must ensure that cross-border transactions between related entities reflect market value. Transfer pricing documentation is required for large companies engaged in significant related-party transactions.

Special Tax Regimes

  • Free Trade Zones: Companies operating in Cameroon’s free trade zones benefit from a CIT holiday for up to 10 years, VAT exemptions, and customs duty reductions. These zones are designed to attract foreign direct investment in sectors such as manufacturing and logistics.
  • Investment Incentives: Cameroon offers tax holidays, reduced CIT rates, and customs duty exemptions to companies in sectors such as agriculture, mining, tourism, and renewable energy.

Other Taxes

  • Customs Duties: Cameroon, as a member of the Central African Economic and Monetary Community (CEMAC), applies customs duties based on the CEMAC Common External Tariff. Rates vary from 5% to 30%, depending on the type of goods. Raw materials and essential goods may qualify for reduced or zero customs duties.
  • Excise Taxes: Excise taxes are levied on alcohol, tobacco, petroleum products, and luxury goods.
  • Property Tax: Cameroon imposes property taxes on land and buildings, based on their market value.

Double Taxation Agreements (DTAs)

Cameroon has signed several double taxation agreements (DTAs) with countries such as France, South Africa, and members of CEMAC. These agreements help reduce withholding taxes on cross-border income and prevent the double taxation of income earned in Cameroon and other jurisdictions.

Local Taxes

Local governments in Cameroon may impose property taxes, business license fees, and local service levies. However, most major taxes, including CIT, PIT, and VAT, are centrally administered by the Directorate General of Taxes (DGI).

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed within three months following the end of the financial year. Personal income tax returns are generally due by March 31st. VAT returns are filed monthly or quarterly, depending on the size of the business.

Penalties for Late Filing:
Penalties for non-compliance or late filing include fines and interest on unpaid taxes. The DGI imposes interest at 1.5% per month on overdue taxes, with additional penalties for underreporting or tax evasion.

Recent Developments

Focus on Infrastructure Development:
Cameroon is prioritizing investment in infrastructure projects, particularly in transportation and energy. The government is offering tax incentives such as CIT holidays, VAT exemptions, and customs duty reductions to companies involved in these sectors.

Oil and Gas Investment:
Cameroon’s oil and gas sector continues to be a major driver of foreign direct investment. The government provides tax incentives, including CIT reductions, VAT exemptions, and customs duty relief for companies engaged in oil exploration and production.

Digital Economy and E-Government:
Cameroon is enhancing its tax administration by introducing electronic filing systems and expanding digital tax platforms. These reforms aim to improve tax compliance and reduce administrative burdens on businesses.

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