Cameroon

Rates and scope

The standard VAT rate is 19.25%, unless the zero rate (0%) applies.

Taxable operations include transactions carried out within the context of an economic activity against payment.

An economic activity means all activities relating to production, importation, provision of services, and distribution, including mining activities, agriculture, agro-industry, forestry, handicraft, and activities of independent or related professions.

The following supplies fall outside the scope of the VAT system:

• discounts, rebates and commissions, provided that they appear on an initial invoice or on a rectified bill

• free distribution of goods for advertising or sales promotion purposes

• disbursements that are merely refunds to the buyer or customer of the exact amount invoiced

• cash receipts such as interest in arrears or damages for non-performance of contract terms which are not payments for any business transaction.

VAT registration

Compulsory registration

No specific registration number is required to comply with the VAT rules.

In Cameroon, there is a single tax identification number of which taxpayers must use to fulfil all their duties regarding all taxes.

However, it is important to note that the persons authorised to invoice VAT must be either natural persons or corporate/commercial entities realising an annual turnover before tax equal to or in excess of XAF50m (EUR76,224.50).

Non-residents

Application for registration

Any natural or legal person liable as a statutory or actual taxpayer to payment of a tax, duty or levy, or an instalment thereof, by virtue of the provisions of the General Tax Code, must register online with the competent tax authority of the area within 15 working days following the start of their activities. They must also attach a site plan to such registration and provide an electronic address.

The obligations mentioned above are also applicable to operators of e-commerce platforms.

Deregistration

Output tax

Transactions subject to VAT

Prices must be advertised inclusive of VAT. For the calculation of VAT or excise duty, the basis of assessment must be rounded down to the nearest thousand francs.

The following transactions are subject to VAT:

• supply of goods, i.e., the transfer of power to dispose of tangible property as owner even if such transfer is affected at the behest of a public authority; exchanges; assets brought into the business; and hire purchase sales

• supply of goods to oneself, i.e., transactions carried out by taxpayers either for the benefit of their enterprise or for other professional needs, excluding supplies made for the normal needs of the manager of a private enterprise for himself, and supplies made to himself by any group for the personal needs of its members, where such supplies concern premises constituting the main place of residence

• provision of services to third parties, i.e., all activities relating to industry rental contracts or work contracts by which a person undertakes to perform a given job in return for payment, and, generally, all transactions other than supplies of tangible property

• services rendered to oneself, i.e., services performed by taxpayers to satisfy either the needs of their enterprise or other needs related to their normal professional activities

• transactions related to the importation of goods

• real estate activities and transactions of any kind carried out by real estate developers (since the Finance Law for Fiscal Year 2011, ‘real estate activities’ include various forms of direct business and intermediation carried out by professionals in the sector of real estate transactions)

• sales of second-hand articles and materials by professionals

• transfers of assets that are not exempt

• transactions carried out by enterprises approved under the free-zone regime

• sales of petroleum products imported into or produced in Cameroon

• games of chance and games of entertainment

• leasing transactions with or without option of purchase

• commercial subsidies of any nature whatsoever

• loan forgiveness and commercial debt write-offs

• payment of commissions to travel agencies for the sale of domestic flight tickets

• sales of goods and services in Cameroon or through foreign or local e-commerce platforms (since January 2020)

• commissions received by e-commerce platform operators for carrying out transactions mentioned in the paragraph above (since January 2020).

Exempt supplies

The following transactions are exempted, provided they are subject to specific taxes exclusive of tax on turnover:

• real estate transactions of all kinds carried out by non-professionals

• transfer of real estate rights in rem and transfer of business assets subject to the transfer duty or an equivalent tax

• international traffic transactions concerning:

  • ships and boats used for industrial or commercial activities on the high seas,

  • lifeboats and assistance boats,

  • aircraft and ships used for maintenance and refuelling operations, and

  • certain inter-state transit operations and services related thereto, in accordance with the Economic and Monetary Community of Central Africa (CEMAC) Customs Code

• the importation or sale by the State of fiscal stamps, postage stamps, and stamped papers

• sums paid by the Treasury to the Central Bank, which has the currency-issuing privilege, and the proceeds from the transactions of this Bank in connection with the issue of notes

• tuition and boarding fees collected by authorised schools and university institutions

• essential goods listed under Annex 1, namely:

  • pesticides, fertilisers and inputs, as well as other agricultural, livestock and fishery inputs used by the producer,

  • small fishing equipment, seeds, agricultural machinery and tools, their inputs and spare parts for plants for manufacturing the said machinery and tools

  • pharmaceutical products and the inputs thereof, as well as the material and equipment used in the pharmaceutical industry

• leasing transactions carried out by credit establishments for borrowers, towards the acquisition of specialised agricultural equipment to be used in farming, livestock, breeding and fishing

• sales of oil products for refuelling the aircraft of companies that have a registered office in Cameroon

• the social consumption of:

  • 20m³ per month for water 

  • 220kW per month for electricity

• the composition, printing, import and sale of newspapers and periodicals, except proceeds from advertising, certain inputs and capital goods for these transactions, acquired by press, newspaper, and periodicals companies

• imports of certain exempted goods under the CEMAC Customs Code

• tests, consultations, health care, hospitalisation, medical and biological analysis, and the provision of prostheses in health facilities

• contracts and commissions on life insurance products with a savings component

• HIV/Aids control equipment under certain conditions

• subject to reciprocity, headquarter agreement and quotas laid down by the competent authorities, goods and services destined for the official use of foreign diplomatic and consular missions, and international organisations in conformity with modalities provided by regulation

• material and equipment used in harnessing solar and wind energy

• interest on real estate loans contracted by natural persons to acquire low-cost houses, if it is their first dwelling house, on the basis of a clearance issued by the tax authority

• the sale of low-cost houses to natural persons acquiring their first dwelling house subject to a clearance from the tax authority 

  • provision of services invoiced by promoters to members of approved management centres (AMCs) (AMCs provide management assistance and guide their small-size members in the accomplishment of their tax obligations)

  • materials and equipment specifically designed for persons with disabilities, the list of which shall be established by regulation

  • urban public transport by bus (subject to option)

  • universal postal service-related services rendered by postal service providers under the terms and conditions laid down by the regulations in force

  • interest on negotiable debt securities issued by the state and regional and local authorities

  • interest paid on loans less than CFA francs 2,000,000 (two million) granted by first category microfinance institutions to their members.

Zero-rated supplies

Input tax

Input tax allowed

Input tax expressly denied

VAT incurred on the following expenses is expressly denied as an input tax deduction:

• expenses for housing, lodging, catering, receptions and shows, and the cost of hiring a private car or passenger transport vehicle

• importation of goods for use for business purposes, but that are unused and re-exported as is

• goods and services purchased by the enterprise, but that are used by third parties or the management or employees of such enterprises

• services relating to goods exempted from the right to deduction.

VAT initially deducted shall be paid in full in the case of goods and services which are not fixed assets, where such goods and services were used for transactions not liable to VAT.

The full repayment of the Value Added Tax initially deducted shall also be required where the goods and services concerned were the subject of misappropriation or fraud committed directly or indirectly by a partner or a manager of the company.

Partial exemption

For taxpayers not exclusively carrying out transactions giving a right to deduction, the deduction must be made proportionately. Such deduction applies to fixed assets and to goods and services. It is calculated from the fraction of turnover pertaining to taxable transactions.

The fraction is calculated as follows:

• the numerator — the amount of the income corresponding to the transactions liable to VAT, including exports of taxable products

• the denominator — the amount of all income realised by the taxpayer.

When they pertain to goods liable to tax by nature, the following transactions are included in the numerator:

• transactions exempted from VAT as mentioned above

• transactions exempted from VAT within the frame of specific conventions signed with the state.

In the case of haulers engaged in inter-state freight-forwarding operations and related services in the CEMAC region, the specific turnover of these operations must appear in both the numerator and denominator.

A deduction is acceptable only following verification of the proportional deduction.

International trade

Imports

VAT is payable on the importation of goods. This applies equally to supplies of imported services to the state, regional and local authorities, public establishments, companies with partly or entirely public capital, and some enterprises from the private sector (generally with a turnover amounting to XAF3bn, or where the taxpayer is an affiliate of such enterprise, and mentioned on a list established by a ministerial order).

VAT is deducted at source at the time of payment of invoices and remitted to the competent tax service or the competent accounting office with territorial jurisdiction. This deduction is subject to the same conditions and deadlines applicable to other transactions.

Exports

The exportation of products entails a right to deduction and, where applicable, a tax credit where VAT on such product was pre-paid.

In the case of services provided directly at the manufacturing, processing or packaging stages of exported products, as well as for the transportation and transit operations relating thereto, the deduction is not final until proof of actual exportation and prepayment of VAT is shown.

In application of the principle of territoriality of VAT in Cameroon, foreign entities do not qualify for a refund.

Place, time and value of supply

Place of supply

Transactions carried out in Cameroon that are not listed among the exemptions are liable for VAT even when the residence or head office of the real taxpayer is situated outside Cameroon.

VAT is levied at the place of provision or use of the service, production or first release for consumption. A distinction must be made according to whether the provision of services is materially locatable or immaterial (intangible).

Services materially locatable in Cameroon shall be taxable in Cameroon at the general rate provided, irrespective of the place of establishment of the lessee.

These include:

• hire of means of transport

• services related to a building

• port services carried out in the port area as well as on national territorial waters

• intra-community transport of movable tangible property by road or rail

• services incidental to the intra-community transport of movable tangible property

• cultural, artistic, sporting, scientific, educational and recreational services, accommodation and sales for consumption on the spot

• work and valuations of movable tangible property

• services of intermediaries acting in the name and on behalf of others.

Intangible services are taxable at the place of establishment or residence of the customer. These include:

• transfers and concessions of copyrights, patents, licence rights, trademarks and other similar rights

• rental of tangible movable property other than means of transport

• advertising services

• the services of consultants, engineers and design offices in all fields, including those of the organisation of research and development

• the services of chartered accountants

• data processing and information supply

• banking, financial, insurance and reinsurance operations, except for the rental of safes

• the provision of staff

• the services of intermediaries who act in the name and on behalf of third parties in the provision of the services described above

• telecommunications services

• radio and television broadcasting services

• services supplied by electronic means

• access to, and supply through, electricity or natural gas transmission and distribution networks and all other services directly linked thereto.

Intangible services shall be taxable at the general where the lessee is not liable to VAT.

Time of supply

The tax is due as follows:

• on the supply of goods — when the chargeable event takes place

• on receipt of the price, payment by instalments, or advances made for real estate in relation to low-cost housing and the development of industrial zones, as well as phases of services and works; such liability also concerns State suppliers, government services with an annex budget, public establishments, and corporations, as well as regional and local authorities

• on transfers of fixed property — on the date of conveyance or transfer of the property

• on importation or entry of goods and merchandise into Cameroon — at the time of registration of the statement of home use entry

• on consumer credit or leasing transactions carried out by a financial establishment — on the date when the interest or lease payments fall due.

Value of supply

The value of supplies is as follows:

• supply of goods, for any amount or value — all benefits, goods and services received or to be received in return for the supply

• provision of services — all sums and benefits received and, where applicable, the value of material consumed during the execution of the services

• exchange of goods — the value of the products received in return for payment for the goods and, where applicable, the value of the additional payment

• for construction works — the amount stipulated in the contract, bill or invoice

• for leasing transactions with or without option to buy, by the amount of rent billed by leasing companies, and, by the end of the contract, by the transfer price agreed upon in the contract when the purchase option is exercised by the lessee, or by the transfer price where sale is to the third party

• for transactions carried out in the enterprises of chance and entertainment games, by the total proceeds of such games

• supplies to oneself — the purchase price, exclusive of taxes, of goods bought, and used as is, or the cost price of the extracted, manufactured or processed goods.

VAT compliance

Returns and payment of VAT

VAT credits may be offset and, where applicable, refunded under certain conditions. Tax returns may be filed by electronic means, which are subject to certain conditions.

In merger-absorption transactions, the absorbed company may transfer to the absorbing company the pending validated VAT credits at its disposal on the date on which it legally ceases to exist.

Where the tax authority notices a shortcoming, an inaccuracy, or an omission in the data used as a basis to calculate any taxes, duties or sums due under the General Tax Code, the corresponding adjustments will be made following the adversary procedure. The onus of proof will lie with the tax authority.

Interest and penalties

Inadequacies, omissions or inaccuracies affecting the tax base or data that have led the tax authority to make adjustments will result in the application of a 1.5% interest on arrears per month up to a maximum of 50%, which is calculated on the basis of charges to be borne by the taxpayer following notification of the last procedural deed in case of control. Interest on arrears is calculated with effect from the first day of the month during which the return showing an inadequacy, omission or inaccuracy was filed up to the last day of the month of notification of adjustment. The maximum amount of the interest on arrears will be 50%.

Interest will not be waived if the non-compliance does not result in a loss to the State or a benefit for the taxpayer.

Default in registering for operation of e-commerce platforms shall result in a suspension of access to the platform from Cameroonian territory.

Refunds

VAT credits may be refunded on condition that their beneficiaries do not owe any taxes and duties whatsoever that can be compensated, and that the credits are justified.

No application for a refund or offsetting of VAT may be submitted based on receipts of payments in cash.

For general trade activities which by their nature are not likely to generate a structural credit value added tax, any carry-forward credit on subsequent returns shall not be accepted beyond a period of three months after prior approval by the relevant tax administration services.

The General Tax Code stipulates that the refund of VAT is based on the level of risks the company is classified in. The General Tax Code has provided three level of risk, listed below:

• low-risk companies

• medium-risk companies

• high-risk companies.

VAT credit refunds shall be made in accordance with the following terms and conditions:

• for low-risk companies, reimbursement shall be automatic without the implementation of a prior validation control procedure

• for medium-risk companies, reimbursement shall be made after a credit validation control procedure

• for high-risk companies, refunds may only occur after a general accounting audit procedure that must be completed within one month after submission of the application for refund.

The criteria of classification of companies within the risks level above are provided in the General Tax Code.

Objections and appeals

A taxpayer who feels wrongly taxed or overtaxed may submit a written claim to the head of the Regional Taxation Centre of the place of assessment, to the head of the structure responsible for managing the ‘Large Taxpayers Unit’ or to the Director-General of Taxation within 30 days from the date of issue of the notice of issue for collection.

The head of the Regional Taxation Centre, the head of the structure responsible for managing the ‘Large Taxpayers Unit’, and the Director-General of taxation will respond within a maximum period of 30 days.

Where the Head of the Regional Taxation Centre, the Director in charge of the Large Tax Unit or the Director General of Taxation fails to react after 30 days, the taxpayer may automatically forward their claim to the Minister in charge of Finance.

Where the taxpayer’s arguments are justified, tax relief is granted as follows:

• the Head of the Regional Taxation Centre or the Director in charge of the Large Tax Unit will grant tax relief up to the sum of XAF30m in principal and 30m for penalties and additional charges

• the Director General of Taxation will grant tax relief up to the sum of XAF100m in principal and XAF100m for penalties and additional charges.

Where the decision of the Regional Taxation Centre, of the head of the structure responsible for managing the ‘Large Taxpayers Unit’, or of the Director-General of Taxation does not fully satisfy the claimant, they may forward their claim within 30 days to the Minister in charge of Finance, who will respond within a time limit of two months.

Where the taxpayer’s arguments are justified, the Minister in charge of Finance is entitled to grant a tax relief for principal taxes and levies of an amount exceeding XAF100 hundred million as well as for penalties and additional charges of an amount exceeding XAF100 hundred million.

Time limits

Sums due from taxpayers for taxes and duties assessed by virtue of the General Tax Code are barred after a period of four years following the due date, where no instrument has been issued to end the limitation. This limitation may not be invoked in the case of taxes deducted at source or those for which the person liable is only a collector.

The maximum period for claiming input tax credits is two years.

According to the Finance Law 2019, the limitation period for VAT refund requests is three years.

VAT records

Tax invoices

Receipts must be issued for all payments. Such receipts are exempted from stamp duty. A duplicate thereof may be issued to a taxpayer who so requests.

A tax invoice may be issued in French or English and may not be in a foreign currency.

Credit notes and debit notes

Additional export documentation

Record-keeping

The accounts of a subsidiary or branch of an undertaking established outside Cameroon may not be invoked in litigation with the tax authority unless they show the profits made by the same subsidiary or agency.

Records must be kept for a period of ten years. Where accounting is conducted via a computer, the tax authority may seek technical assistance from experts in order to conduct tests on the equipment used by the enterprise and check the following:

• the accounting system used

• all the information, data and processing directly or indirectly used to produce the accounting or tax results or draft the documents that are mandatory under the General Tax Code

• documents concerning analysis, programming and execution of processing.

Taxpayers must produce, at the request of the tax authorities, all mandatory accounting documents and records, supplemented where necessary by the accounting items applicable to the nature of the activity undertaken, in order to establish the genuineness of the information mentioned in a tax return.

Specific VAT rules

Bad debts

For taxes that cannot be collected due to a change in the situation of the taxpayer at the time of assessment, the collector of taxes will submit lists of irrecoverable taxes to the Director of Taxation.

For each irrecoverable tax, the relevant list must indicate the nature of the tax with reference to the issue prohibiting collection, and the amounts not collected, as well as any information or details showing clearly that such taxes have become irrecoverable. They will be submitted along with documents to support the measures taken to recover the said taxes. The collectors of taxes who are personally and financially responsible for tax recovery may be discharged and freed from performing such duty where the bad debts are officially listed. The Minister in charge of Finance will issue a registered certificate for all taxes considered as bad debts.

Land and buildings

Leasing

Promotional gifts

Small retailer scheme

Tourism industry

Other indirect taxes

Import duty

The basis of assessment for imports is determined by adding the amount of customs and excise duties to the taxable value.

For goods entering the territory of a member state, the basis of assessment is the ex-works value, excluding forwarding costs. The basis of assessment for the excise duty on imports will be determined by adding the amount of the customs duty to the taxable value.

The basis of assessment for VAT and excise duty on imports of some alcoholic beverages and tobacco products will be the taxable value, i.e. the price agreed on by the parties to the transaction. For goods and merchandise entering the territory from a CEMAC member state, the basis of assessment is the ex-works value, excluding forwarding costs.

Excise duty

Excise duties are imposed on luxury goods (natural fruit juices, mineral water, gaseous drinks, wines, spirits and other fermented drinks, tobacco and cigarettes, caviar, slot machines, lottery machines, etc.), on certain imported cosmetic products that endanger the health of the skin (hydroquinone and cosmetic products containing hydroquinone) as well as mobile telephone communications and Internet services. The taxable base is the turnover. 

For imports of luxury goods, the taxable base consists of the customs value, increased by customs duties applicable. Where certain tobacco and alcoholic beverages are concerned, the value is the transactional value. There are minimum taxes applicable to tobacco and alcoholic beverages.

The rates of the excise duty in Cameroon are presented as follows:

Table 1

According to the 2019 Finances Law, in the specific case of alcoholic beverages, the excise duty amounts resulting from the application of the 25% above shall contain another specific tax rate.

The specific rate is an amount (e.g. XAF2, XAF3, XAF8, etc.) that applies per centilitre, depending on the nature of the concerned alcoholic beverage.

Stamp duty

Stamp duty in CEMAC countries is established independent of registration fees on all papers to be used for civil and legal instruments and documents that may be brought before courts of law as proof.

Stamp duty is fixed according to the nature of the instruments subject thereto. It is paid by use of stamp paper, a stamping machine, and adhesive stamps or by endorsement for stamp duty, or against declaration or on production of statements or extracts, or at a fixed rate.