Application of VAT

There are three essential conditions used in defining the domain of application or the scope of VAT, the persons concerned, the transactions in question, and the territory concerned.

  1. Taxable Person:

A taxable person is one who is or should be registered for VAT, because they carry out taxable transactions.According to section 125 of the GTC, all natural (individual or physical) and artificial (legal or moral) persons what ever their legal status- who independently, usually or occasionally carry out taxable transactions that fall under the domain of VAT in Cameroon are liable to the application of VAT. As for natural persons, the states that only those who realize a minimum annual turnover of 15,000,000 CFA Francs should be registered for VAT.

2.  Taxable Transaction by their Nature:

Considering the nature of transactions, taxable transactions should fulfill the following conditions as indicated;

  • Be profitable and valuable delivery of goods or provision of services,carrying a financial compensation from the beneficiary,
  • Be undertaken by taxable person
  • it should be part of an economic activity
  • it should not appear on the list of transactions exempt from VAT as provided by finance law

3. Taxable Transactions due to the special provision of the law:

these are transactions that would normally not have fallen within the domain of VAT, but the law in section 127 of the GTC makes them taxable. They include:

  • Supplies for own use (production for own use)
  • The renting of undeveloped lands by professionals(real estate agents)
  • The sales of second handed items by professionals in this domain
  • The importation of goods
  • All transactions on landed properties carried out by real estate agents
  • The disposal of tangible fixed assets not found on the list of items exempt from VAT
  • the sale of petroleum products, whether imported or produced in Cameroon
  • Games of chance and entertainment

4. The Territory Concerned.

Section 129 of the GTC states that for any non exempt transaction to be liable to VAT, the consumer or beneficiary must be found in the Cameroon territory. This territory is considered to include the country,Cameroon embassies, or in short, areas where the state exercise sovereignty, according to international law. For VAT purpose, the following precisions should be made related to transactions carried out in Cameroon.

  • Sales delivered in Cameroon and Services used in Cameroon
  • Case of diplomats and international Organisations
  • international transport
  • Transport out of Cemac region
  • The supply of services
  • Services related to real estate
  • Importation