The tax regime applicable to providers of public procurement
The concept of a public contract at the fiscal level not only refers to public contracts as defined by Decree No. 2004/275 of 24th September 2004 relating thereto, but also to purchase orders and order forms.
Indeed, since 2005, contracts and orders of less than CFA 5 million francs are subject to the registration formality.
The affixing of registration inscriptions gives rise to the levying of a tax known as « registration fee ». In addition to this tax, government contracts are subject to other levies.
Taxes applicable to public contracts
Taxes, duties and levies on public contracts consist of:
Registration fees
They are borne by the successful bidder of the contract; that is to say, the contractual partner of the administration.
Applicable Rate:
- 2% on the contract value exclusive of taxes for order forms and public orders equal to or greater than CFA 5 million francs;
- 5% of the contract value exclusive of taxes for purchase orders for services less than CFA 5 million francs.
- 2% of the contract value exclusive of taxes if it includes a pledge;
- 1% of the contract value exclusive of taxes if it includes a surety bond.
VAT (Value Added Tax)
VAT is borne by the successful bidder; that is to say, the contractual partner of the administration.
Applicable Rate: 19.25% (17.5% in principal and 1.75% CAC) on the contract value exclusive of taxes.
The SIT (Special Income Tax), on the provision of services realised by companies domiciled outside Cameroon
The SIT shall be borne by a company not having a tax domicile in Cameroon, but which realises various services. It is deducted at source.
Applicable Rate:
- 15% rate applicable on the gross amount of royalties and remunerations paid, including the SIT itself;
- 7.5% for studies, technical assistance, financial and accounting contracts concluded with French companies.
The Income Tax (advance)
It is borne by the natural or legal person who executes the contract and is deducted at source during the settlement of government contracts.
Applicable Rate:
- 1.1% on the contract value exclusive of taxes for taxpayers under the actual tax system and simplified tax system;
- 1.5% on the contract value exclusive of taxes for taxpayers under the basic system.
The procedure for registration of public contracts
- Presentation of the contract for the registration formalities by the successful bidder;
- Full payment of the fees with the tax authorities;
- Affixing of the entries by the Head of Principal Tax Centre or the Head of the Large Tax Unit;
Place of registration of public contracts
- Special Unit for Registration of Contracts, at the Principal Taxation Centre of the place of execution of the contract;
- Special Unit for Registration of Contracts at ministries and structures where they exist.
Deadline for the registration of public contracts
One (01) month from the date of notification of contract award.
Sanctions for violations of the declaration and payment obligations
Tax sanctions
- Imposition of a levy in addition, as penalties in case of default by the successful bidder;
- Charging of an additional half-duty in case of inadequate assessment;
- Charging of a triple duty in addition in case of concealment.
Administrative and penal sanctions
- Loss of right to practice (M150 GTC)
- Exclusion from public contracts (M79 and M 105 GTC)
- Administrative proceeding for the collection of taxes owed (M 51 ff GTC)
- Penal proceedings (M 107 and following of the GTC).