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Cameroon - Indirect Tax Guide

Cameroon - Indirect Tax Guide

Explore the requirements and rules that apply to indirect taxes in Cameroon.

Explore the requirements and rules that apply to indirect taxes in Cameroon.

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General

Types of indirect taxes (VAT/GST)

VAT.

What is standard VAT/GST rate?

19.25 percent.

Are there any reduced rates, zero rates or exemptions?

Zero-rated supplies include:

  • export of goods

Exempt supplies include (subject to specific taxes exclusive of tax on turnover):

  • mining products
  • real estate transactions by non-professionals
  • interest
  • rights to real estate and business assets subject to transfer duty or comparable duties
  • international traffic transactions including:
    • ships and boats used for industrial or commercial activities on the high seas
    • lifeboats and assistance boats
    • aircraft and ships used for maintenance and refueling
    • interstate transit operations and related services
  • fiscal stamps, postage stamps and stamped papers
  • payments by the Treasury to the Central Bank and proceeds in connection with the issue of notes
  • tuition and boarding by schools and universities
  • essential goods including:
    • pesticides, fertilizers, inputs, and other agricultural, livestock and fishery inputs used by producers
    • small fishing equipment, seeds, agricultural machinery and tools, their inputs and spare parts
  • oil products to refuel aircrafts for companies with registered offices in Cameroon
  • first 10m3 social consumption of water per month and first 110kW of electricity
  • newspapers and periodicals
  • imports of certain exempted goods under the Economic and Monetary Community of Central African States (Communauté Economique et Monétaire de l’Afrique Centrale (CEMAC)) customs code
  • health care, life and health insurance and HIV/AIDS control equipment
  • goods and services for official use by foreign diplomatic and consular missions and international organizations.

What are the general and specific place of supply rules, if applicable?

A transaction shall be deemed to have been carried out in Cameroon:

  • Where, in the case of sale of goods, the goods are delivered in Cameroon
  • where, in the case of other transactions, the service provided, the rights transferred or the object hired is used or operated in Cameroon.

VAT/GST registration

Who is required to register for VAT/GST?

Natural persons under the actual earnings tax regime with a minimum annual turnover of 50 million Central African francs (XAF), or corporate bodies, including regional authorities and bodies governed by public law, which automatically, habitually or occasionally carry out taxable transactions (carried out within the context of an economic activity against payment) are required to register.

Is voluntary VAT/GST registration possible for an overseas company (e.g. if the annual turnover is below the relevant VAT/GST registration threshold)?

No.

Does an overseas company need to appoint a fiscal representative?

Yes, a solvent representative accredited by the tax authority. A bank account in Cameroon is not required.

Is VAT/GST grouping* possible?

No.

VAT/GST compliance

How frequently are VAT/GST and other indirect tax returns submitted?

Monthly, due by the 15th of the month following the tax period.

Can returns be filed and payments be made electronically?

Returns must be filed in hard copy at the Tax Center.

Payments are made through bank transfer.

What are the exchange rate rules?

Invoices may not be issued in foreign currency.

Exchange rates are determined by national financial institutions. The exchange rate for the euro (EUR) and XAF is fixed: XAF655, 957=EUR1.

VAT/GST recovery

Can an overseas company recover VAT/GST and other indirect taxes if not registered for VAT/GST locally?

No.

Is it a prerequisite that output tax be charged before input tax can be claimed?

No.

Are there any exemptions with the right to recover or deduct input VAT?

Input VAT cannot be deducted on:

  • expenses for housing, lodging, catering, receptions and shows
  • car hire and passenger transport services
  • importation of goods used for business purposes but which are unused and re-exported as is
  • goods and services purchased by the enterprise but which are used by third parties, the management or employees of such enterprises
  • services relating to goods exempted from the right to deduction.

Further input VAT cannot be deducted if: 

  • the VAT in question was paid in cash for taxable operation of at least XAF100,000 (following the provision of article 143 sub d of the Cameroon GTC, VAT is deductible for taxable transactions of at least XAF100,000 and the related deduction right shall be on condition that the said transactions are not paid in cash)
  • there is no proof of carrying out activities for 2 uninterrupted years
  • there are any other outstanding taxes.

For what period of time may input tax not previously claimed be claimed (i.e. prescription)?

The right to deduction may be exercised until the end of the second financial year following the one in which the VAT fell due.

Where a VAT return reflects a refund due to the taxpayer, is the refund paid to the taxpayer or is the taxpayer required to utilize the refund as a credit against future payments?

VAT credits are generally deductible from what is due. Where there is a remainder after the deductions, it is refunded after a quarterly accumulation.

 

Invoices

Is a business required to issue tax invoices?

Yes. Bills (containing the same information as that of a tax invoice) must be issued to clients.

Is it possible/mandatory to issue invoices electronically?

Yes, it is possible.

Is it possible to issue recipient-created tax invoices?

No.

Audits

Do tax audits take place on a regular basis?

Yes.

Failure of submission and information obtained from other taxpayer audits may lead to an audit.

After submission of every return, there is an internal audit which could lead to further audits.
All taxpayers are subject to a tax audit every 2 to 3 years. After 4 years, the administration cannot perform any checks on a historical period.

Are audits done electronically in your country/territory (e-audit)? If so, what system is in use?

No.

What penalties can arise from non-compliance?

Inadequacies, omissions or inaccuracies affecting tax base can result in a penalty of 30 percent and interest of 1.5 percent per month limited to a maximum of 50 percent of the VAT liability.

Late filing of return, reflecting nil tax or tax credit following an official notice can result in a penalty of XAF1 million per month of delay.

Special indirect tax rules

Are there unique country/territory-specific indirect tax rules that differ from 'standard' indirect tax rules in other jurisdictions?

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

  • discounts, rebates and commissions which appeared on the initial or rectified invoice
  • goods distributed for no charge for advertising
    and promotional purposes.

The tourism industry and small retailers pay a discharge tax instead of income tax and VAT.

Does a reverse charge mechanism apply?

Yes.

Can VAT on reverse charges be claimed as input tax, to the extent that the expense on which the reverse charge VAT is accounted for, is used for taxable purposes?

Yes.

Can non-residents appoint local agents in order to avoid reverse charge VAT by virtue of charging standard rate VAT and accounting for such VAT through the agent?

Yes. Such agent must be accredited by the Tax Administration and the banks.

Are there indirect tax incentives available (e.g. reduced tax, tax holidays)?

The Law N° 2013/004 of 18 April 2013 provides incentives to investments in Cameroon.

Some sectors (oil and gas as well as investments in major structuring projects) benefit from tax incentives upon the issue of an attestation of exemption from a particular tax.

Investors can apply for reduced rates or total exemption from the payment of taxes.

Rulings

Is it possible to apply for formal or informal advance rulings from the tax authority?

Yes.

Are rulings and decisions issued by the tax authorities publically available?

No, copies of rulings and decisions issued by the tax authorities are not publicly available.

However, a summary of some rulings can be found in the compilation of administrative doctrines in hard copy. Information compiling administrative doctrines on www.impots.cm are not regularly updated.

Other indirect taxes

Are there other indirect taxes not commented on above?

Yes, other indirect taxes include:

  • customs duty
  • excise duty
  • stamp duty.

For further information please contact

Jacques Bounang
Partner
KPMG in Afrique Centrale
T: +237 333 42 73 68
E: jbounang@kpmg.cm

Footnote

*By ‘grouping’ we mean: either a consolidation mechanism between taxpayers belonging to the same group (payment and refund are compensated but taxpayers remain distinct) or a fiscal unity for VAT/GST purposes (several taxpayers are regarded as a single taxpayer).

Disclaimer

All information contained in this document is summarized by KPMG in Cameroon, a member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

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