The basis of assessment of the personal income tax shall be the sum of each type of category of net income earned by the taxpayer within one fiscal year, after an abatement of a fixed amount of CFAF 500 000 concerning wages and salaries.
The categories of net income are defined in the provisions herein below.
SALARIES, WAGES, PENSIONS AND LIFE ANNUITIES
- -TAXABLE INCOME
Income from salaries, wages, allowances, emoluments, pensions and life annuities as well as profits earned by insurance agents, travelling salesmen-representatives, where the remunerated activity is carried out in Cameroon, shall be liable to Personal Income Tax.
Pensions and life annuities shall be deemed to be received in Cameroon where the beneficiary is based in the country.
- – EXEMPTIONS
The following income shall be exempt from the tax:
- Special allowances intended to cover inherent duty and service expenses insofar as they are effectively used for the intended purpose and not overstated;
- Family allowances or benefits;
- Allowances and benefits paid in any form by the State, councils and State institutions by virtue of the laws and decrees governing assistance and insurance;
- Temporary allowances, benefits and life annuities paid to victims of industrial accidents and their rightful claimants;
- Life annuities paid as damages by virtue of a court judgment ordering compensation for bodily injury leading to total permanent disablement, compelling the victim to rely on third party assistance to carry out the most ordinary acts of life;
- Fixed salary supplement paid to civil servants;
- Injury and disability pensions paid to ex-servicemen;
- Scholarships;
- Funds received as pension or death benefits or as cumulative compensation for death or injury;
- Salary increases resulting from the application of the salary adjustment index to civil servants and State employees working in diplomatic and consular missions abroad;
- Bonuses paid to workers during the award of labour medals by the Minister in charge of Labour;
- The share of the severance pay granted as damages pursuant to the labour legislation excluding the sums intended to cover the compensation for loss of salary.
III – BASIS OF ASSESSMENT
The basis of assessment shall be the gross amount of salaries, allowances, emoluments, wages, pensions and life annuities as well as benefits in kind or in cash granted to the persons concerned.
Benefits in kind shall be valued according to the following scale, applicable to the gross taxable wage:
| – housing | 15% |
| – electricity | 4% |
| – water | 2% |
| – each servant | 5% |
| – each vehicle | 10 % |
| – food | 10% |
Any cash allowance representing benefits in kind shall be included in the basis of assessment within the limit of the above rates, unless they are specifically exempted by a contrary provision.
The net taxable income shall be determined by deducting the gross amount paid and the benefits in kind or cash granted, the business expenses calculated at a fixed rate of 30%, as well as the contributions paid to the State, the National Social Insurance Fund (NSIF) for compulsory retirement.
I -TAXABLE INCOME
The following capital shall be taxed as income from stocks and shares:
- proceeds from shares, stocks and similar income;
- income from bonds;
- income from assets, deposits, surety-bonds and current accounts;
- profits from the transfer of shares, bonds and other kinds of shares.
- The refund of sums of money made available to the enterprises by a partner or manager as advance or loan, where the contribution or advance granted to the enterprise was in cash.
A -Proceeds from stocks and shares income considered as such
All profits not ploughed back into the company shall be considered as distributed income. They include notably:
- All proceeds or profits not place in reserve or included in the share capital. Profits and capital gains become taxable when they are refunded to partners by deducting capital;
- All sums and stock put at the disposal of shareholders and not deducted from profits including:
- except otherwise stated, sums allocated to partners directly or through intermediate persons or companies as advance payment, loans or installments; where such sums are reimbursed to a corporate body, they shall be deducted from the taxable income for the corresponding assessment period of reimbursement;
- sums or stocks allocated to shareholders and equity shareholders representing redeemed shares for those exceeding their original values;
- undisclosed earnings and profits;
- sundry earnings and benefits granted to Partners of joint stock and limited liability companies and ploughed back into profits under the provisions of section 6 above.
The remunerations granted to board members of limited companies, excluding salaries and industrial property royalties.
Subject to international conventions, the profits of companies whose location or head office is not in Cameroon shall be deemed to be shared every fiscal year to persons not resident or not having their registered office in Cameroon.
The following shall not be deemed to be distributed income and shall be exempt from tax in the category of income from movable assets:
- Distributions in the nature of refund to partners or shareholders of contributions or issue premiums, provided that such distribution takes place only when all profits and reserves other than the statutory reserve have previously been distributed.
For the purposes of this provision the following shall not be deemed to be contributions:
- Reserves incorporated in the capital;
- Amounts incorporated in the capital or reserves (merger bonuses) in the case of a company merger.
- Redemption of all or part of their capital, interest shares or capital investments made by authorized agents of the State, councils or other public authorities where such redemptions are justified by the lapsing of all or part of the corporate assets especially through gradual decline or through the obligation to return the concession to the granting authority;
- Reimbursement following the liquidation of the company and relating to the redeemed capital up to the amount which, at the time of the redemption, has been liable in Cameroon to the personal income tax.
- Amounts made available to shareholders by way of remuneration for loans, services or duties and duly deductible for the assessment of the company tax.
- Sums granted to shareholders by open-end investment companies for the repurchase of their shares.
In the case of company mergers, the gratuitous allotment to members of the company taken over of shares or capital stock in the company taking over or in the new company shall not be deemed to be taxable allotments for the purposes of Section 36 (2) (b) of the Code where the company taking over or the new company has its registered office in Cameroon.
Where a joint-stock company or a limited liability company owns either the registered shares of a joint-stock company or shares in a limited liability company, the personal income tax shall be assessed on all the dividends and other distributed proceeds. However, where the sums distributed for a financial year correspond to the proceeds from the said shares received during that same financial year, the tax borne by these proceeds shall be deductible from the amount of the tax owed by the above company.
The benefit of the foregoing provisions shall be granted on condition that:
- the stocks or shares owned by the parent company represent at least 25% of the capital of the subsidiary company;
- the parent companies and their subsidiaries have their registered office in Cameroon or another CEMAC Member company;
- the sum total of taxation borne by the subsidiary company shall be equal to that which it would support in the State of parent company;
- the stocks or shares allotted on issue have always been registered in the name of the holding company, and, where the shares concerned were not allotted on issue, that this company undertakes to keep them in registered form for two consecutive years at least.
- Any breach of this commitment shall be penalized by the taxation of income unduly applied for inadequate returns.
B -Income from bonds
The following shall be considered as income from bonds for the purpose of the present provisions:
- interest, back payments and other proceeds from debentures, government stocks, and other negotiable loan stock issued by councils and public establishments in Cameroon, associations of every kind and any companies, firms or enterprises of a financial, industrial, commercial or civil character of Cameroonian nationality;
- prize bonds and redemption premiums paid to holders of bonds issued in Cameroon.
They shall be liable to both personal income tax and, where necessary, company tax.
C -Income from financial assets, deposits and securities
Interest, back payments and all other proceeds from the following shall be deemed to be income from securities where they are not included in the earnings from an industrial, commercial, non-commercial, handicraft, agricultural or mining activity:
- financial assets in the form of mortgage debts, preferential debts or unsecured debts, other than those evidenced by bonds, government stock or negotiable loans under Section 40 above;
- Sight or fixed term deposits with any depository and for any purpose whatsoever;
- Cash guarantees;
- Current accounts.
D – Profits from transfer of stocks, bonds and other capital shares
The following shall be taxable as income from movable capital, net overall capital gains realized in Cameroon or abroad during the transfer, even the indirect transfer of stocks, shares and bonds of enterprises governed by Cameroonian law including notably any transfer made in Cameroon or abroad between two foreign companies under the same consolidation scope when one of the entities of this scope, completely or partially, holds the share capital of an enterprise governed by Cameroonian law, including entitlement relating to natural resources.
The tax must be paid prior to the registration formality using a form provided by the taxation department.
II – EXEMPTIONS
The following shall be exempt from personal income tax:
- interest accruing on negotiable securities in respect of loans issued by the State and regional and local authorities;
- interest accruing on savings accounts containing deposits of not more than CFAF 50 (fifty) million francs;
- interest on savings accounts for housing purposes;
- interest on cash vouchers;
- net overall capital gains referred to in Section 42 of the Code, where such amounts do not exceed 500,000 (five hundred thousand) CFA francs.
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