International Correspondence Lawyers & Financial Experts

Value-added-tax (VAT) of 18.7 % as from January 1999 has been put on goods and services, with certain exceptions, such as milk, flour, books and pharmaceuticals. The corporate tax rate is 38.5 %, and there is a 25 % withholding tax (16.6 % if the receiver is resident in Cameroon). Businesses are also subject to a turnover tax of 18.7 % (8.8 % for certain goods). Capital gains tax is 25 %. Incentives available include a three-year exemption from registration fees and taxes on loans for companies setting-up and a 50 % reduction on company tax for the first year. A five-year tax holiday giving a 50 % reduction in company tax, a 50 % reduction in withholding tax and a carrying over of losses to the following five years is also available. Companies exporting finished or semi-finished products are exempt from export duties, insurance and transportation charges for products exported. Raw materials and intermediate products originating from Central African countries, and water and electricity, are also exempt from import duties.

Companies establishing themselves in rural areas are able to deduct 50 % of transportation costs. There are double taxation agreements with France, Canada and Switzerland. The oil exploration tax law implemented in April 1998 offers inducements to exploit older, less profitable concessions. The costs arising out of dry wells can be put against tax liabilities. In the research and development stage, under certain circumstances, oil companies and their sub-contractors may be exempt from a 15 % special tax on income. An oil company's share of production will increase according to costs incurred in deep-sea exploration and the government may fund its own share of costs incurred by joint oil exploration.

Free zones

The Industrial Free Zone (IFZ), for firms exporting at least 80 % of their products, operates throughout the country, both in industrial parks and in one-off special industrial free zones (SIFZ) for agro-processing factories. A wide range of activities are eligible, including manufacturing, and financial and information processing services. Applications are normally processed within 30 days. Companies in the IFZ are given a ten-year tax holiday, with a flat rate of 15 % corporate tax thereafter. IFZ firms enjoy tax-free repatriation of funds, and no foreign exchange regulations. There is, on the whole, exemption from customs duties and taxes but import taxes are imposed on certain categories of goods.