In Cameroon, the determination of tax residency is governed by the General Tax Code (GTC). According to Article 10 of the GTC, an individual is considered a tax resident if they meet any of the following criteria:
- Physical Presence: Residing in Cameroon for more than 183 days in a calendar year.
- Domicile: Having a permanent home in Cameroon.
- Economic Interests: Having the center of their economic interests in Cameroon.
For companies, tax residency is determined based on their place of incorporation or management and control. A company is considered a tax resident if it is incorporated in Cameroon or if its management and control is exercised in Cameroon.
Impact of International Tax Treaties
Cameroon has entered into several double taxation agreements (DTAs) with other countries. These DTAs may modify or provide exceptions to the standard criteria for tax residency as defined in the GTC.
The DTAs typically include a "tie-breaker" clause that determines which country has the primary right to tax an individual or entity in cases where they are considered a resident of both countries under their respective domestic laws.
For example, the DTA between Cameroon and France provides that an individual is considered a resident of Cameroon if they have a permanent home in Cameroon or if their center of vital interests is in Cameroon. However, if the individual is also considered a resident of France under French law, the tie-breaker clause provides that they will be considered a resident of France for the purposes of the DTA.
Rationale and Objectives
The criteria for determining tax residency in Cameroon are designed to ensure that individuals and entities with significant ties to the country are subject to taxation on their worldwide income. This helps to prevent tax evasion and ensures that Cameroon receives its fair share of tax revenue.
The DTAs that Cameroon has entered into are intended to prevent double taxation and promote cross-border trade and investment. The tie-breaker clauses in these DTAs help to ensure that individuals and entities are not subject to double taxation on their income.
If you are an individual or entity with ties to Cameroon, it is important to understand the criteria for determining tax residency in the country. This will help you to ensure that you are meeting your tax obligations and avoiding any potential penalties.
