The types of taxes in Cameroon are delineated by the Cameroonian tax system.
THE CAMEROON TAX SYSTEM
The Cameroonian concept of income taxation is similar to industrialized countries. There are two central income taxation systems: individuals (personal income tax) and companies (entities).
The turnover is also subject to taxation: the turnover tax is borne by the final consumer, with a variable rate (general rate: 17%, ad valorem excise duties: 25%, reduced rate: 8%).
Types of Taxes in Cameroon (Taxation Regimes 2024)
1. PERSONAL INCOME TAXATION
Foreign individuals must answer two questions: 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.
See Also: Personal Loans in Cameroon.
B) REGULATION
i. CLASSIFICATION
There are two kinds of individual income taxes: proportional tax (taxe proportionnelle sur les traitements et salaires) and progressive overtax.
a) Proportional Tax
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 depends on the salaries used for the proportional tax, deducted by certain expenses.
The net taxable income is divided into a certain number of shares while considering 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 cannot fall under 3,000 FCFA.
ii. EMPLOYERS’ OBLIGATIONS
Outside the monthly declaration of paid salaries and deductions that come with each payment, the employer must also make an annual declaration of the wages paid before July 31st with identification of the employees and a supply of information permitting the calculation of deductions. The monthly and yearly deductions are made with the help of extracts from the staff information document.
iii. EMPLOYEES’ OBLIGATIONS
The monthly deduction of the proportional tax and the progressive overtax does not release the employees from their obligation to annually declare their income before August 31st.
Suggested: Taxation Concours Past Questions.
2. COMPANY INCOME TAXATION
Company income tax must be paid by the limited companies and 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 through industrial or commercial activity are subject to taxation. This also applies to foreign companies unless a tax treaty between their country and Cameroon avoids double taxation.
Taxation is established based on profits made during the 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
1. Proportional tax on income floating capital
There are four categories of income that are subject to proportional tax on income floating capital :
Income distributed by Cameroonian companies includes:
- Profits made from negotiable interests
- Profits made from investments ;
- Gains made by foreign companies in Cameroon.
When these companies do not benefit from a bilateral treaty with Cameroon, profits are considered 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.