Employers have several tax responsibilities, including contributions to various funds and insurance, income tax withholding, and other taxes.

Employer Contributions to National Social Insurance Fund (CNPS)

Employers contribute 11.2% of an employee's gross salary (capped at XAF 750,000 per month) to the CNPS. This covers pensions, sickness, and maternity benefits.

Occupational Accidents Insurance

Employers contribute between 1.75% and 5% of total salaries depending on their risk classification.

Employer Contributions to the Housing Loan and Employment Fund

Employers contribute 2.5% of the total salaries and fringe benefits for their employees.

Employer Contributions to the National Employment Fund (FNE)

Employers contribute 1% of taxable salary.

Income Tax Withholding (Pay As You Earn - PAYE)

Employers must calculate and withhold income tax (PAYE) from employee salaries, based on a progressive tax scale. Taxable income includes salary, bonuses, and benefits. Employers remit this withheld tax to the tax authorities on a monthly basis.

Other Taxes

Property Tax

Employers owning real estate in Cameroon may be subject to property taxes.

Apprenticeship Tax

Employers with more than 20 employees are subject to an apprenticeship tax of 2.5% of the payroll.

Key Considerations

Deadlines

Tax and social contribution payments typically have a deadline of the 15th of the following month.

Tax Treaties

Cameroon has tax treaties with several countries that may impact withholding or other tax obligations.

Professional Support

It's highly advisable to consult a tax advisor or accountant in Cameroon to ensure full compliance with all tax regulations.

In Cameroon, there are several mandatory deductions from an employee's salary. These include:

Personal Income Tax (Impôt sur le Revenu des Personnes Physiques - IRPP)

Income tax is withheld at source based on a progressive tax rate structure. The latest tax brackets and rates can be found within Cameroon's Tax Code.

Social Security Contributions (National Social Insurance Fund - CNPS)

Employees contribute a percentage of their gross salary (around 4%) to the CNPS. This covers pensions, family allowances, and occupational risk insurance.

Council Tax (Centimes Communaux Additionnels - CCA)

A small percentage of an employee's salary is deducted as a council tax.

There are also other potential deductions such as union dues. If applicable, union membership fees might be deducted from salaries.

It's important to note that employees may be eligible for certain tax allowances or deductions, potentially reducing overall income tax. However, tax laws in Cameroon, including income tax rates and social security deductions, may be subject to updates. Always refer to the latest sources or consult a tax advisor for the most accurate information.

The standard VAT rate in Cameroon is 19.25%. Services provided within Cameroon are generally subject to this standard rate. However, certain essential services, such as healthcare, education, and some financial services may be exempt from VAT. For the most up-to-date and comprehensive list of exempt services, it's essential to consult the Tax Code of Cameroon.

VAT on Imported Services

Cameroon may apply a "reverse charge" mechanism for certain services received from outside its borders. In this case, the recipient of the service in Cameroon is responsible for calculating and paying VAT, even if the supplier is a foreign entity. It's important to assess whether a particular imported service is taxable under Cameroon's VAT regulations.

Important Considerations

The determination of where a service is considered to be supplied is crucial and can be complex. It impacts VAT liabilities and obligations. Certain types of services might have specific VAT treatment or potential exemptions.

Staying Compliant

The primary source of information on VAT regulations in Cameroon is the Tax Code of Cameroon. For complex situations, international transactions, or to ensure complete compliance with VAT on services, consult a tax advisor specializing in Cameroon's VAT system.

Companies in specific sectors or fulfilling certain criteria enjoy reduced Corporate Income Tax (CIT) rates. This can include a standard rate reduction to as low as 25%. Businesses engaged in manufacturing, processing of local resources, and export activities may be eligible for exemptions or reductions on import duties for equipment, raw materials, and other essential goods. Certain sectors benefit from accelerated depreciation allowances on qualifying assets, reducing taxable profit over a shorter period. Newly established businesses in specific sectors or regions may receive temporary tax holidays, providing complete exemption from CIT for a set duration (usually 5-10 years).

Sector-Specific Incentives

Companies engaged in agriculture, livestock, fishing, and forestry can benefit from various tax benefits, including exemption from VAT on agricultural equipment and inputs, five-year exemption from land taxes for new farms, and reduced CIT rates for companies processing local agricultural products. While subject to specific tax regimes, the mining and petroleum industries enjoy tailored incentives, including tax stabilization clauses to protect investments against unfavorable tax law changes, royalty reductions or exemptions during the exploration phase, and accelerated depreciation and cost recovery provisions. Cameroon encourages the development of Small and Medium Enterprises (SMEs) with incentives like simplified tax regimes with lower tax rates, preferential access to government procurement contracts, and training and technical support programs.

Incentives Tied to Economic Zones

Cameroon has established various economic zones to attract investment. Businesses operating within these zones benefit from reduced CIT rates, exemptions from customs duties and VAT, simplified administrative procedures, and access to developed infrastructure and support services.

Investment Incentives Law (2013)

Cameroon's Investment Incentives Law provides a comprehensive framework of incentives. Companies that meet specific criteria, such as job creation, utilization of local resources, or export orientation, qualify for two phases of benefits. During the establishment phase (5 years), they are exempted from various registration fees and duties, and from or reductions in property, business license, and transfer taxes. During the operational phase (10 years), they receive partial exemption from CIT up to varying percentages, and exemptions from specific taxes on dividends and salaries paid to expatriate staff.

Eligibility for specific tax incentives depends on factors like the size of investment, location, employment generation, and sector activity. It is essential to consult the Investment Promotion Agency (API) and relevant tax authorities for the most up-to-date information and guidance.