CHAPTER ONE

COMPANY or CORPORATION TAX

Company tax is an income tax on net taxable income or net profit before taxes realized by an
artificial person during a given year. The taxable income is derived from the accounting profit (or
income), after making necessary adjustments.
The taxable income is the sum of incomes from all taxable sources, less deductions for charges on
income paid, and personal allowances and reliefs. Otherwise to say, the taxable income is derived
from the accounting profit after necessary adjustments.

I.1 SCOPE OF APPLICATION

A. Companies and collectivities liable to the Company Tax
- All incorporated businesses carrying out profit making activities;
- All Micro-Finance Establishments and their unions with lucrative activities, common initiative
groups, mutual organizations, etc. (FL 2011);
- Public organizations carrying out profit making activities;
- Civil Societies that carry out profit making activities;
- Civil Societies among whose members is at least a public limited company.
NB: See Sections 2 of the GTC for a full list.
B. Entities whose subjections are optional.
 Partnership Firms;
 Joint-Ventures;
 Financial Syndicates.
They are not by law obliged to be taxed by company tax but if they chose to be assessed under
company tax, this declaration should be made at most in the month of March and is irrevocable. All
partners are required to sign for this option.

C. Entities exempted from the Company Tax. (Sect. 4 GTC).

- Artificial persons carrying out Non-Profit-Making activities or non lucrative activities;
- Not-for-profit agricultural establishments;
- In short, establishments registered as a not-for-profit organization or whose activities are observed
to be non-lucrative such as:
 Regional and local authorities (Councils) and their public utilities services;
 Societies and bodies, responsible for rural development, which are recognized as being of
public utility;
 Real estate public bodies for the allocation of low cost housing;
 Private clubs and societies for their nonprofit making activities;
 Non profit private education establishments with non lucrative objects;
 National Social Insurance Fund for the share of profit coming from the contribution on
salaries;
 Economic interest groups for share of their profit to members that are natural persons.
An exhaustive list is found in section 4 of the GTC.
NB: the right to have the status of a not-for-profit organization (NFPO) and to be exempted from
the company tax is only granted by the ministry of finance. This right depends neither on the
objective nor the legal status of the organization as declared by the owner(s) on its creation.

D. Territoriality of the Company Tax.

The profits taxable by the C.T are those of companies operating in Cameroon or that are obtained
on operations realized on Cameroon soil, taking into consideration international conventions.

I.2 ASSESSMENT OF THE COMPANY TAX

A. Period of assessment (Section 15 GTC)
The CT is levied on the Fiscal Profit obtained for a period of twelve months corresponding to the
fiscal year which happens to coincide with the calendar year. However, for the first year of
operations this fiscal period may be:
- Less than twelve months if the entity starts its operations during the 1st semester of the fiscal
year (i.e. between January and June 30th). In this case the company will present its final
accounts by the end of this same fiscal year.
- More than twelve months if the entity starts its operations during the 2nd semester of the
fiscal year (from July 1st to December 31st). In this case, the company shall present its final
accounts by the end of the next fiscal year.

B. The Determination of the Fiscal Results (Section 5 GTC).

The determination of the company tax requires the application of fiscal rules which lay down the
condition of deductibility of expenses, and taxation or exemption of revenues. This calls for the
adjustment of the Accounting Net Income to the Fiscal Net Income.

The relation between Accounting Profit and Taxable or Fiscal Profit

The taxable profit is the base on which company tax is calculated. This is obtained after making
necessary adjustments on the accounting profit.
- Accounting profit or income = Accounting Revenues – Accounting Expenses
- Taxable profit or income = Accounting profit + Reinstatements – Deductions
Reinstatements:
These are items which come in to increase the accounting profit as projected by the profit and
loss account. The mechanism consists of adding to the accounting profit expenses which were
wrongly deducted or overstated and revenues which were not accounted for or which were
wrongly deducted or understated.
Deductions:
These are items which come in to reduce the accounting profit as projected by the profit and loss
account. The mechanism consists of subtracting from the accounting profit those expenses
which were not accounted for or which were understated, those revenues which were overstated
or wrongly accounted for, and tax allowances and relieves.

NB: Two reasons justify the adjustments made on the accounting net profit.
- Accounting net profit respect accounting principle and rules which at times differ from tax
laws. Of course, the fiscal law prevails over accounting principles in matters of taxation.
- Tax payers with the intention of reducing the tax burden may violate the accounting
principles in establishing their results. In that case the tax officers need to verify all the works
done by accountants to be very certain that there was nothing of ill intention.

Table for the determination of fiscal profit

Element Calculation Amount
Accounting profit ANI
 Add: reinstatement
-part of understated revenues +X1
-taxable unaccounted revenues +X2
-part of overstated expenses +X3
-unjustified expenses +X4
Total X X

Intermediary Fiscal Net Income IFNI

Less: deductions
-understated expenses Y1
-unrecorded expenses Y2
-overstated revenues Y3
-tax exempted recorded revenues Y4
-fiscal relieves & allowances Y5
Total Y -Y

Fiscal Net Income (or Taxable Income) FNI

Illustration 1.1. Adjustment of the accounting net income to a fiscal net income
Marx Plc has as reporting date 31 December. For the year ended on 31 December 2022 with a
profit before tax (accounting profit) of 16 420 000 CFAF, the fiscal check reveals the following:
1. Sales to Hoga for 5 400 000 CFAF were recorded as 4 500 000 CFAF.
2. The accountant forecasted and recorded the December month electricity consumption to 1 200
000 CFAF while the corresponding bill received in early January 2023, showed a figure of 800 000
CFAF.
3 As at 31 December 2022, Marx Plc had not received the credit advice from Union Bank notifying
the amount of credit interests to the business’s favour. These receivable interests stood at 850 000
CFAF.
4. The book of accounts showed salary paid to Miss Tita of 1 400 000 CFAF for the year. The
payroll department is unable to justify that this salary corresponds to effective work.
5. In computing the December month salary, a power failure impaired the payroll system which
released payable salaries of 18 600 000 CFAF. After a complaint by the affected salaried workers,
it was realized that the actual amount of salaries was 21 900 000 CFAF.
6. It was discovered that sales invoice No 789 to Bino amounting to 4 500 000 CFAF was recorded
twice.
7. Purchase invoice No 5678 of 2 500 000 CFAF was not recorded.
Work required: determine the Fiscal Profit of the business for the year 2022

C. Computation, Payment and Accounting for the Company Tax

To compute the company tax liability and the income tax due for the fiscal year, the following
aspects are to be taken into consideration:
The rate of the tax;
The advance payments on account made during the fiscal year;
The annual tax liability;
The minimum levy for the annual company tax; and
The balance of the tax due.

1. The rate of the Company Tax in Cameroon (section 17 GTC)

Principal ACT Final rate Nature of the entity concerned

30 10% (30)=3 33 Annual turnover above 3 billion CFAF
25 10%(25)=2.5 27.5 Annual turnover ≤ 3 billion CFAF
25 2.5 27.5  Shares are listed on the CEMAC/ECCAS stock
exchange
 Shares are issued through this stock exchange

15 1.5 16.5 For innovative start-up companies in ICT

 (to promote digital economy

20 2 22 For public establishments dealing with

the promotion of local building materials.

The annual company tax liability is the higher of:

(i) The annual tax liability based on the taxable profit;
Company tax liability = Taxable profit x rate as the case may be and
(ii) The annual tax liability based on the fiscal minimum tax.
Company tax liability(1) = Annual turnover VAT excl. x 2.2% (or 15.4% or 5.5% or 1.5%) as the
case may be (1) With fiscal minimum rate of:
• 2.2% for taxpayers under the actual earnings system;
• 15.4% for taxpayers under the regulated margin sectors;
• 5.5% for taxpayers under the simplified taxation system and liberal professional;
• 1.65% (a reduced rate) for companies whose ordinary shares are listed on the ECCAS (CEMAC)
stock exchange.
NB:
(i) The assessment base of the company tax liability (taxable profit or annual turnover) must be
rounded down to the nearest 1 000 CFAF.
(iii) The STR table to be used for the computation of the company tax liability is:
• Table T7 or CF1a (kn own as CF1 bis in French), when the company tax liability based on the
taxable profit is greater than the company tax liability based on the fiscal minimum;
•Table T8 or CF1 Ter, when the company tax liability based on the taxable profit is less than the
company tax liability based on the fiscal minimum.

2. Advances of the Annual Tax Liability

According to section 21 of the GTC, companies liable to the payment of the company tax usually
pay advances on the company tax of the period within that period so as to relief them from paying a
heavy lump sum at the end of the year. The advances involve:
2. a. Tax advance on turnover
- 2.2% of the annual monthly turnover for those under the Actual Earning System (AETS);
However, there are some peculiar sitautions.
- For production firms in the flour-milling sector, 2.2% of turnover realized after 50% abatement;
- For firms subject to the AETS and falling under regulated profit margin sectors, one installment
representing 14% of gross margin shall be paid no later than the 15th day of the following month. Such
installment shall be increased by 10% as levy for additional council tax, making it 15.8%
NB: Within the meaning of this section, the under-mentioned distribution sectors shall be considered
regulated profit margin sectors: ‐ petroleum products and cooking gas; ‐ flour-milling products; ‐
pharmaceutical products;
‐ press products
However, taxpayers falling under regulated profit margin sectors may opt for the ordinary law regime
where it is more favourable to them. To this end, they shall inform their Taxation Centre by simple letter not
later than 31 January. In this case, the installment shall be calculated at the rate of 2.2% applied to the
turnover. The option shall be irrevocable until the end of the fiscal year.
The above advances shall be deducted at source during settlement of bills paid from the budget of
the state, regional and local authorities, and public administration establishments.
-5.5% of monthly turnover for tax payers classified under the simplified taxation system;
- For companies not registered in a taxation center, the installment rate shall be 11%. This rate
shall be increased to 22% for forestry companies where, in addition, they do not provide evidence
of possessing a logging permit duly issued by the competent authority.

- Reduced rate of 1.65% of monthly turnover for listed companies.

NB:
- The tax advance on turnover for the month is paid not later than the 15th of the following month.
- Notwithstanding the above provisions, the rate of the advance of the company tax shall be fixed at 5.5%,
irrespective of the tax system of the service provider for invoices relating to public procurement amounting
to less than 5 million FCFA.

Accounting entries to record the advance are:

During the payment of the advance:
Dr. 4492-state, advances & payments on account for taxes
Cr. Class 5 accounts e.g. cash or bank
At the end of the fiscal year to determine the outstanding tax payable;
Dr. 441-state, tax on net income
Cr. 4492-state, advances & payments on account for taxes

2.b. Tax advance on purchase

A prepaid tax on the amount of importation or purchase transactions for resale in state should be
levied on:
- Importation by traders, including those accessed under the global earning system;
- Purchases made by traders who are manufacturers, farmers, importers, wholesalers, semi-wholesalers,
forest exploiters;
- Purchases of petroleum products by fuel filling stations owners and purchases of basic necessities
by exporters;
- Transactions carried out by enterprises which are not in hold of the tax payer’s card.

Exempted from the payment of the advance tax on purchase are:

-Importation carried out by tax payers considered under special management units as defined by the
Directorate of Taxes;
-Purchases carried out by the state, councils, and non residents from industrialists, agriculturists,
importers, wholesalers, retailers and timber exploiters;
-Purchases made by industrialists who are registered and who are accessed under the actual earnings
System, where purchases are for the operations of their enterprises.

Rates of the advance tax on purchase:

Rate AETS STS GTS taxpayers not

registered with a
taxation center
2% traders / /
of purchases
5% traders taxpayers
of purchases
10% Taxpayers engaged taxpayers
of purchases in import activities
14% of the On the gross margin for the purchase of goods with regulated prices, irrespective of
gross the tax regime.
margin
15% /20% Taxpayers not registered with a taxation centre and engaged in import activities.
of purchases This rate shall be increased to 20% where the taxpayer carries out the sale of in-
bond goods.
0.5% 0.5% of purchase transactions made by operators of fuel filling stations on petroleum
products.
NB:
1) The additional council tax rate is not applied on this tax.
2) For imported goods, the basis of calculation of the advance payment shall be the customs value of
the goods. It shall be collected as follows:
- As concerns imports, by customs services under the same conditions as customs duties;
- In other cases, by the supplier who shall pay it in within the first 15 (fifteen) days of the month
following the quarter during which the transactions were made.
3) The advance payment or prepayment is not recoverable on the price. It shall be calculated without adding
the additional council tax.
4) For persons subject to the company tax or personal income tax, the sum deducted in advance as down
payment shall represent an installment of the monthly or quarterly installments.
5) Excess payments shall be deducted from subsequent installments. In case of cessation of activities,
they shall be reimbursed.
Accounting entries to record the advance on purchase:
During purchase:
Dr. 4478- prepaid taxes on purchase deducted at source
 Cr. Class 5 accounts e.g. cash or bank
At the end of the fiscal year to determine the outstanding tax payable;
Dr. 441-state, tax on net income
Cr. Dr. 4478- prepaid taxes on purchase deducted at source

2.c. The advance tax on Real Estate Income (Section 89 GTC)

The GTC in its sections 87, 88, 89 and 90 brings out three modalities:
i) Tax advances to be deducted at source on rental revenues.
Stream 1: 15% deduction at source on behalf of rental revenue earners of the global and simplified
tax systems. Deduction made by persons (natural or artificial) of the simplified and actual earnings
systems when paying their rents (art. 87 of the GTC);

ii) Rental Revenue Tax Advances Not Deducted at Source

Stream 2: Payment of 5% of quarterly rents received by rental revenue earners of the actual
earnings system who are placed under a specialized mgt unit (stream 1 will apply if the taxpayer is
not under the specialized mgt unit) (sect. 89 of the GTC)

iii) Tax advances on profits from the transfer of real estates

Section 90 of the GTC stipulates that a 5% flat rate deduction shall be made by the notary on the
gains realised by the vendor or transferor on the transfer of real estates. This deduction shall be paid
before the registration formality using an official form supplied by the administration.

Accounting entries for the advance payment of 5%:

During the year when the payments are made
Dr. 4492-State, advances and payments on account for taxes
Cr. Cash account
After the end of year during the determination of the outstanding tax payable
Dr. 441-State, tax on net income
Cr. 4492-State, advance and payments on account for taxes

2.d. Tax advance on income from securities: (Section 70 GTC)

The taxable Revenues

According to Sections 35 and 36 of the GTC, the following incomes shall constitute revenues from
securities:
- Revenues from shares and stocks; i.e. dividends and all such revenues.
- Revenues from debentures or bonds; i.e. interests, and redemption premiums on bonds or
debentures
- Revenues from financial assets, deposits and cautions; that is, interest received on mortgage debts,
sight and fixed term deposits, and current accounts.
- Capital gains, i.e. profits from the transfers, disposals of securities and rights over natural
resources
Exempt Revenues
According to section 43 of the GTC, the following categories of financial revenues shall be
exempt from the personal income tax on income from securities:
- Interest from loan stock issued by the state and its decentralised organs,
- Interest from saving accounts with principals of less than 50 million Francs,
- Interest from savings for housing purposes,
- Interest from cash vouchers,
- Capital gains of value less than 500 000 Frs.
- Net capital gains realized by natural or legal persons on the stock market in Cameroon.
- Interest on external loans with accrued duration of at least seven years.
The taxable base of revenues from securities
According to section 44 of the GTC, the base will be determined as follows:
- The gross value of dividends
- For debentures or bonds, it will be the total interest or revenue received.
- For redemption premium, it will be the difference between the redemption price and the issue
price.
- The gross value of interest for financial assets, deposits and cautions.
- The capital gain, for the disposals of financial assets.
- In case of a net capital loss incurred during a period, that loss can be carried forward and netted of
on the capital gain realised in the four future financial years.

The Rate
- Tax on dividends earned on inter-company investments: A tax rate of 16.5% (15% as principal
and 10% of the principal, as additional council tax) shall be applied on all types of income from
securities.
This tax shall be deducted at source, and paid at most 15 days that follow the payment of the
dividend, when paying dividend on inter-company investments. It shall represent an advance
payment of the company tax for the person receiving the proceeds.
- The tax rate on dividends with a maturity of less than 5 (five) years as well as other proceeds from the
stocks of natural or legal persons listed on the stock market in Cameroon shall be fixed at 10%.
- This rate shall be fixed at 5% for proceeds from private or public company bonds with a maturity of
five (5) or more years.

The computation will be as follows for dividends and interests:

For unlisted companies;
ND=Net dividend
GD=Gross dividend
TD=Income tax deducted at source, where TD=GD x r%; r= 16.5.%. For example, if
ND= GD –TD
= GD 16.5% x GD
= GD (1-0.165)
= GD x 0.835
Thus GD = ND/0.835
The accounting recordings shall be as follows:
- After the declaration of the dividend:
The person receiving the dividend will enter the declaration as follows;
Dr. 4711- sundry debtors (by the net dividend receivable)
Dr. 4478- state, tax deductions at source
Cr. 772- income from equity investments (by the gross dividend)
The person paying the dividend shall enter the declaration as follows;
Dr. 1301- profit for appropriation (gross dividend)
Cr. 465- shareholder, dividends payable (by the net of the dividend)
Cr. 4424- taxes and rates recoverable on shareholder (by the income tax to be deducted)
- After payment of dividend:
The person receiving the dividend will enter the payment as follows;
Dr. 57-Cash account (by the net of the dividend)
Cr. 4711- sundry debtors (by the net dividend receivable)
The person to pay the dividend shall enter the payment as follows:
Dr. 465- shareholder, dividends payable (by the net of the dividend)
Cr. 57-Cash account (by the net of the dividend)
After paying the deducted tax to the state (at most 15 days after paying the dividend)
Dr. 4424- taxes and rates recoverable on shareholder
Cr. 57-Cash account

-Tax on capital gains:

According to Sect. 111 of the GTC, ‘all capital gains realized in the Cameroon stock exchange
market shall be exempted from the company tax, the capital gain tax and any other tax of the same
nature’. However, the disposal of securities can take place in other domains other than the stock
exchange market. For instance, this can be done through banks. If realized out of the stock
exchange market, the rate of 16.5% is employed to tax these gains.
The accounting entries will depend on whether the capital gain is on a marketable security or an
equity security.
Capital gain on short-term securities
The income is recorded as follows:
Dr. Cash or 486-Claims on the disposals of marketable securities
Cr. 50-Marketable securities
Cr. 774-Incomes from marketable securities
Fifteen days after receipt of income, the tax is paid and recorded as follows:
Dr. 4492-State advance and payments on account of taxes
Cr. cash
Capital gains on long-term securities
The recording procedures are as follows:
Recording of disposal price:
Dr. 57-Cash or 486-Claims on the disposals of marketable securities
Cr. 826-Revenue from disposal of fin. Fixed assets
Recording of the provision of the period (if any)
Dr. 6972-fin. Provisions on fin. Fixed assets
Cr. 296-provisions for depreciation of equity securities
Cancellation of total provisions and depreciation
Dr. 296-provisions for depreciation of equity securities
Dr. 816-Book values of disposals of fin. Assets
Cr. 26-equity securities
Recording of the payment of capital gain tax from the disposal of financial fixed assets: (the capital
gain must be more than 500,000FCFA before being liable to this tax.)
Dr. 4492-State, advance and payments on account for taxes
Cr. 57-Cash
-Interest from financial assets
According to paragraph 1 of Sect. 111 of the GTC, interest from bonds with a maturity of less than
five years earned by persons listed on the stock exchange market in Cameroon shall be taxed at a
reduced rate of 10%. This rate shall be 5% on the remunerations of listed private or public
enterprise bonds with maturities of five years or more.
According to paragraph 2 of Sect, 111 of the GTC, ‘all interest earned on bonds issued by the state
or decentralized organs of the state shall be exempted from the company tax and any tax on
incomes from securities’. All contrary cases shall be taxable.
According to Sect. 43, 44 and 70 of the GTC, the taxable base shall be the gross value of the
interest earned on financial assets, deposits and cautions, and the rate of the income tax here shall
be 16.5%.
The accounting entries shall be as follows:
When interest is earned;
Dr. cash or bank ………………………..…net value of interest
Dr. 4478-PIT on income from securities…deducted income tax
Cr. 778-Income from fin. Risks................….gross value of interest
Accounting entries at the end of the year for the declaration of outstanding company tax;
Dr. 441-State, tax on net income… deducted income tax
Cr. 4478-PIT on income from securities…deducted income tax

3. Annual declaration of advances on company tax (See Table 25 STR for the Standard
System)

4. Determination of the Annual Tax Liability

The annual tax liability is determined considering these two variables: the Taxable Profit (i.e. the
fiscal net income) and the Minimum Levy or Tax set for the annual company tax.
4. a .The annual tax liability based on the taxable profit is simply the;
Company tax liability = fiscal net income (taxable profit) x rate (e.g. 33%) 1)
The fiscal net income is rounded down to the nearest 1,000fcfa.
NB: table 23 of the STR is employed to determine the company tax.
4. b. The annual tax liability based on the Fiscal Minimum Tax;
This method is employed:
When 33% of the taxable profit is less than the Advance Company Tax on Turnover collected
during the year; or
The fiscal net income is a net loss.
If it is the case,
- The total turnover (before T.O. tax) for the fiscal year ended is rounded down to the nearest
1,000fcfa;
 - The rounded amount is multiplied by the minimum levy rate (either 2.2% or 3.3% or 5.5%)
according to the taxation system and the status of the taxpayer (importer or not) to obtain
the annual tax liability. That is:

Company tax liability = Annual Turnover x 2.2%, 5.5% etc. respectively (Formula 2)
NB: table 23 of the STR is employed to determine the company tax, when using this approach.
According to paragraph 2 of Sect. 22 of the GTC, the annual company tax liability shall not be
less than the advance tax on turnover. Otherwise to say, the annual tax liability shall not be less
than 2.2%, 5.5% etc. of the annual turnover respectively.
2.2% of the annual TO for taxpayers under the actual earning regime;
5.5% of the annual TO for taxpayers who are under the simplified taxation system.
NB : See above for the rest of the rates.

5. The company Tax Payable or Due for a fiscal year ended

This process is simplified using table 22 of the Statistic and Tax Return (STR).
Net accounting profit
+ Reinstatements
=Intermediary fiscal net income
- Deductions
= Fiscal net income
From here we calculate:
2%, 3% or 5% of annual turnover = A
And 30% of fiscal net income rounded down to the nearest thousand = B
If A > B; it is table 24 of the STR that is to be filled
If A < B; it is table 23 of the STR that is to be filled.

Mechanism of the payment of Company Tax

The company tax due at year end is determined thus:

Company Tax Payable = Annual Tax Liability (33% of the Taxable Profit)
+ Tax on incomes not deducted at source
- Advances and payments on account for taxes
- Tax abatements and reliefs
The balance payable is paid by a single installment on or before March 15st of the coming fiscal
year.

6. ACCOUNTING FOR THE COMPANY TAX

In addition to the entries made for the advances and payments on account for the year, the company
tax is recorded by taking into consideration two situations:
- When the tax is based on the net profit; or
- When the tax is based on the fiscal minimum tax.

a. Case where the tax is based on the Net Profit

This is when there is a net profit and at the same time the tax on the net profit is more than the
fiscal minimum tax. The net profit before tax (revenue - expenditure) is recorded on the credit side
of account 131 – net profit. The following items should be taken into consideration for the full
accounting records of the company tax after it has been determined.
131- Net profit;
441- State, tax on net income;
4478- State, taxes deducted at source (for prepaid taxes on purchases, taxes deducted at source on
real estate income and incomes from securities);
4492- State, advances and payments on account for taxes;
521 or 571 – cash or bank
891- Income tax of the period (company tax = 33% of taxable profit)
 Recording of the company tax liability: indebtedness toward the state:
Dr. 891- Income tax of the period (company tax = 33% of taxable profit)
 Cr. 441- State, tax on net income (company tax = 33% of taxable profit)
 Setting off the expense (company tax) against the profit
Dr. 131- Net profit (company tax = 33% of taxable profit)
Cr. 891- Income tax of the period (company tax = 33% of taxable profit)
 The advance payments made during the year reduce the indebtedness towards
the state
Dr. 441- State, tax on net income
Cr. 4492- State, advances and payments on account for taxes
Cr. 4478- State, taxes deducted at source
 Payment of the outstanding company tax
Dr. 441- State, tax on net income;
Cr. 521 or 571 – cash or bank

b. Case where the tax is the Fiscal Minimum Tax

This occurs when the company incurs a loss or when the tax on the net profit realized by the
company is less than the fiscal minimum tax (i.e. 2.2% or 3.3% or 5.5% of annual T.O).
The net loss before tax (revenues - expenses) is recorded on the debit side of account 139 – net loss.
In this case, the annual liability will be the fiscal minimum tax. The following items should be
taken into consideration for the full accounting records of the fiscal minimum tax after it has been
determined.
131- Net profit
139- Net loss
441- State, tax on net income
4478- State, taxes deducted at source
4492- State, advances and payments on account for taxes
891- Income tax of the period (company tax = fiscal minimum tax)
 Recording of the fiscal minimum tax
Dr. 895- Income tax of the period (company tax = fiscal minimum tax)
Cr. 441- State, tax on net income (company tax = fiscal minimum tax)
 Transfer of the expense (fiscal minimum tax)
This will depend on whether there is a net loss or a net profit.
Case of net loss:
Dr. 139- Net loss (fiscal minimum tax)
Cr. 895- Income tax of the period (fiscal minimum tax)
Case of net profit:
Dr. 131- Net profit (fiscal minimum tax)
Cr. 895- Income tax of the period (fiscal minimum tax)
 The tax advance payments made during the year reduces the indebtedness
towards the state
Dr. 441- State, tax on net income (sum of all the advances)
Cr. 4478- State, taxes deducted at source (sum of all the advances deducted at source)
Cr. 4492- State, adv. and payments on account for taxes (sum of advances paid within the
year)
NB: there shall be no payment of the tax balance as the advances (the fiscal minimum tax) that
constitute the tax have already been paid to the state.

7. Determination of the After Tax Income

The following items are taken into consideration for the determining of the net profit or loss after
tax (net profit or loss for appropriation):
- Personnel participation: where employees of a company haves acquired the right to
participate in the profit of the company (personnel profit sharing scheme);
- The Income Tax.
The net profit for the period is the balance of account 1301 and it is calculated as follows:
Net profit for appropriation
For the period (account130) = Ordinary Activity Net Income (account 137)
± Extraordinary activity net income (account 138)
- Participation of workers (account 87)
 - Company tax (account 891)
a. Personnel Participation (account 87)
This account record the amount allocated by the business to a legal or contractual fund to the
benefit of employees. Participation is considered as an item of the allotment of profit before tax.
This usually refers to the bonus to the employees of a business that is given either in form of cash
or shares, based on a percentage of the profits. It should be differentiated from:
- The participation of employees to the capital of the business, which is recorded against the
capital account;
- Payments made to employees (for the provision of any work force) in relation to the
turnover realized such as commissions, which should be recorded against personnel
expenses account.
The accounts provided for the recording of personnel participation are:
871- Legal profit sharing scheme;
874- Contractual profit sharing scheme;
878- Other schemes.
For full accounting record to be made for personnel participation, two steps are involved:
 Recognition ascertainment of part of profit that will be allotted to employee:
Dr. 87- personnel participation
Cr. 426- personnel, profit sharing scheme
 When closing accounts
The sums levied for Personnel Participation are set off against the profit, contributing as such to the
determination of the net profit (before tax).
Dr.131- Net Profit
Cr. 87- Personnel Participation
NB: Employees do not benefit from the profit sharing scheme when the business realizes a loss.
Therefore, account ‘87 personnel participation’ will not be used in this situation.

b. The Income Tax

It is the share of profit obligatorily allocated to the state as tax on profit. It is recorded by the debit
of account 89- net income tax and its sub accounts include:
891- Tax on net income of the fiscal year;
892- Tax arrears on previous net income (past year’s tax)
895- Fiscal minimum tax;
899- Tax credit and relief on net income tax;
-
Tax arrears (past year’s taxes) are recorded by the debit of account 892- tax arrears on previous net
income with the credit of account 441- state, tax on net income. The fiscal minimum tax (account
895) is used when the 33% of taxable profit is less than the minimum levy rate (2.2%, 3.3% or
5.5%) applied on the annual turnovers.
Tax credit or tax deduction is recorded by the credit of account 899- tax deduction, with the debit
of account 4497- state reduction of tax obtained.

THE FISCAL ANALYSIS OF EXPENSES AND REVENUES.

A. FISCAL ANALYSIS OF EXPENSES

The accounting profit is given by the difference between revenues and expenditure or expenses
recorded in the books of accounts of the company. In most cases this does not correspond to the
fiscal profit chargeable to corporation tax because tax payers have the tendency of overstating or
inflating expenses and in the same line understating or deflating revenues with the aim of reducing
as much as possible the net profit before tax to be declared for the calculation of the company tax
liability for the fiscal year.
A fiscal analysis of expenses then has to be carried out on expenses presented by a company in its
profit and loss account in order to bring out which expenses were not deductible or overstated, so as
to reinstate them into the accounting net income. Likewise, some expenses may have been wrongly
accounted for; as such, they have to be deducted from the accounting net income.

a. General conditions for a charge (expenses) to be deductible:

-If the value of the expense is 500,000fcfa or above, it must have been paid by any other means
apart from physical cash.
-The source document carrying the expense must carry the unique identification number of the
taxpayer, except for documents from foreign suppliers.
-The expenses should be lawful (licit);
-The expenses should not be sumptuous (i.e. they should not be costly, overstated, exaggerated or
inflated);
-They should be a direct relation between the charge and the business operating activity. They
should not be for personal purposes;
-The expenses should be recorded and backed by accounting documents and should be part of the
expenditure of the fiscal period as stipulated by the accruals account concepts;
-All payments made to persons resident in a country or an area considered as a “Tax Haven” by the
Cameroon tax law shall not be deductible.
-They must not be fines or penalties.

b. The fiscal classification of expenses

Beside the general conditions for deductibility outlined above, some specific fiscal rules still apply
for particular expenditures or expenses, to say whether they should be deducted or not, in order to
determine the fiscal results of the company. It is preferable we consider these expenses by their
natures so as to say whether or not an expense is eligible for deduction.

1) Equipment (24)
It must be recorded at their historical cost.The value cannot go below 500 000F and must be
recorded as fixed assets.
The depreciation charge of any unrecorded fixed asset will not be considered as part of the
expenses of the enterprise.
They will be instated. In case the value (purchase cost ) is below 500 000F, it will be treated as a
small equipment.

2)-Purchase and variation of stock (Account 60)

Besides the general conditions, the rules of stock valuation should be respected. Purchases and
consumptions of materials and stores are analyzed in table 16 of the statistics and tax return.
3)-Transport expenses (account 61)
The general condition for deduction of expenses should be fulfilled. However, the following
specific conditions should be fulfilled;
- Traveling expenses paid to employee or salaried share holder on leave and the immediate
family are deducted only if the journey was effective.
- For salary workers, the transport allowance is deductible if and only if they do not give rise
to reimbursement upon presentation of the actual bill or invoice.
Illustration 1.2.
Monthly transport allowance received by Marketing Manager (Mr Eow) for marketing campaign 70
000 CFAF. The books shows reimbursement of transport spending to him after presentation of
justification documents, 900 000 CFAF for the year.
Fiscal analysis: Reinstate allowance: 70 000 CFAF x 12 months = 840 000 CFAF
STR: Could be entered in line 12, 13 or 14 meant for sundry expenses – table Cf1

State what should be the attitude of the tax agent faced with a situation where a company provides
two service cars to a senior staff who equally receives a monthly flat allowance for transportation
of 160,000fcfa?

3)-External services-(account 62)

The general condition for deduction of expenses should be fulfilled. However, the following
specific conditions should be fulfilled;
o Rental expenses (account 622)
Rent paid on fixed assets, e.g. building, land, machines
Rent paid for such items is deductible whoever is the receiver provided it is not exaggerated.
However, rent is Non-deductible when paid to a shareholder holding 10% and above (at least 10%)
of the share capital. Shares of spouse, ascendants and descendants are considered belonging to the
shareholder or partner.
Illustration 1.3
- Annual rent on land paid to Mr Rambo, a real estate agent 5000 000 CFAF, to Mr Kamga a
shareholder who owns 8% of the shareholdings 2 000 000 CFAF. These are completely deductible.
- A plc has realized an accounting profit of 60 000 000F. Mr Ngwa one of its shareholders rented
out a machine for an annual amount of 900 000F. present the fiscal analysis and calculate the fiscal
result considering each of the hypothesis below.
Hypothesis 1: Ngwa holds 6% of the share capital while the husband 8%.
Hypothesis 2: Ngwa holds 6% of the share capital while the husband 2%.
Solution:
Considering hypothesis 1, the rent will be non deductible since the total shares is 14% greater than
10%. It is thus reinstated.
Accounting result 60 000 000
Reinstatement:
Non deductible rent 900 000
ITR 60900 000
Deductions 0
Fiscal result 60900 000
Considering hypothesis 2, the shareholding is 6+2= 8% this is not up to 10% therefore it is
completely deductible.
The fiscal result will therefore be equals to the accounting result since there’s no deduction no
reinstatement.
o Repairs and maintenance (account 624).
They are only deductible if their objective is not to increase the lifespan of the assets in question.
Capital expenditures are therefore not deductible.
o Insurance premiums:
Generally, they are deductible if and only if the occurrence of the risk covered will lead to the
diminution of the net assets of the enterprise. It is therefore admitted as general expenses,
insurance premiums aimed at covering risk of fire disasters, theft of fixed assets and stocks, or non-
recovery of debts.
For health insurance, they are deductible if:
-it is paid on behalf of the personnel and if the insurance company is located within the national
territory;
-if there is no reimbursement of the hospital bill to the benefit of the personnel insured. Other wise
to say the reimbursement of the same hospital bill is not figuring any where again as deductible
expenses. The law further insists that it should be for the benefit of all the personnel, or a given
category of the personnel and not for an individual.
Life insurance subscribed for by the enterprise for risk coverage on the death of personnel, say the
General Manager is not deductible. The reason being that, personnel are not asset.

Illustration 1.4
Annual subscription of insurance for the current year:
insurance relative to vehicules 4 400 000 CFAF, buildings 26 800 000 CFAF,
For the life of the GM Smith an expatriate 8000 000 CFAF.
Fiscal analysis: insurance on assets are ok while we reinstate life insurance of 8000 000F STR:
Could be entered in line 12, 13 or 14 meant for sundry expenses – table Cf1

Illustration 1.5
Carryout the fiscal analysis of the following transactions:
Health insurance paid by MTN for its workers to Gabon Insurance ltd, 80 000 000 CFAF
Health insurance paid by Brasseries du Cameroon to Zenith Insurance Cameroon to the
benefit Mr Eyong alone, 500 000 CFAF. Mr Eyong belongs to Team H which counts 8 workers
having his profile.
 Health insurance paid by Brasseries du Cameroon to Zenith Insurance Cameroon to the
benefit all the workers of Team H, 15 000 000 CFAF.

Solution
The first case is paid to a foreign company hence not deductible. The entire amount of 80 000 000F
will be reinstated

The second case though paid to a Cameroonian entity is discriminatory since it does not involve all
the workers but a specific worker in the said category. It is thus not deductible and will be
reinstated.

The third case is completely deductible since it is for a group of workers and it is paid to a
Cameroonian firm.

B. Other External service (account 63)

The elements of account 63 are deductible when they fulfill the general conditions of deduction of
expenses. However, there are some exceptions:
o Head office expenses and royalties for studies, research, technical, financial or
accounting assistance.
These expenses are usually recorded in the following accounts:
621-general sub contracts;
626-research, engineering and documentation; or
632-intermediation and consultancy remunerations;
Definitions:
Head office expenses are those incurred due to the relation existing between agency and the head
office. They are usually incurred by hiring the services of external intermediary persons, whether
moral or natural and are usually recorded in either account 62 or 63.
Financial assistance concerns sums advanced or lent to the enterprises, including other financial
services such as guarantee.
Technological assistance corresponds to the supply of technology.
Accounting assistance can be manifested in many forms such as the timely detachment of officials
to follow the setting up of accounting systems and accounting audit missions.
Limit of deductibility:
The limit of deductibility depends on the type of enterprise benefitting from the services and paying
for them to a Cameroonian or foreign body (natural or artificial):
• For non-specialist firms (different from those cited below) : 2.5% of intermediary taxable
profit;
• For public works firms: 1% of TURNOVER;
• For research and design firms: 5% of TURNOVER.
Use lines 7 and 23 of table Cf1 to treat head office expenses and assimilated expenses as illustrated
here.
)
Practically, the total expenses are reinstated and after the calculation of the Intermediary Taxable
Net Income, at most 5% of the intermediary taxable net income is deducted.
It therefore means that amounts above the limit are not deductible and eligible for reinstatements.
If the actual amount of the expenses is less than the limit calculated, the actual amount should be
considered and deducted. If it is greater than the deductible limit, the limit should be considered
and deducted.
In case of deficit, this provision shall apply to the intermediary net profit of the last financial year
that registered a profit, with no limitation of time.

Illustration 1.6
An enterprise realizes an accounting profit of 2,000,000fcfa and the charges to be reintegrated
amounted to 250,000fcfa exclusive of head office expenses; the deductible charges amounts to
700,000fcfa exclusive of head office expenses; if the head office charges amounts to 280,000fcfa,
determine :
The amount of head office charges deductible.
The fiscal or taxable benefit
Solution:
Accounting profit 2,000,000fcfa
Reinstatements +250,000fcfa
Head office expenses +280,000fcfa
ITP = 2,530,000 fcfa
Deduction -700,000fcfa
Deductible HE -63,250 fcfa (2.5% of ITP)
Taxable benefit= 1,766,750fcfa

o Commissions and brokerages paid on goods purchased abroad (account 6321)

Limit of deduction: 5% of the value FOB
Illustration 1.7
Bill of 3 000 000 CFAF from broker for facilitating purchase of goods in Italy worth 56 000 000
CFAF.

Fiscal analysis: Deductible limit is 56 000 000 CFAF x 5% = 2 800 000 CFAF. So, non- deductible
commission to be reinstated is 3 000 000 CFAF less 2 800 000 CFAF = 200 000 CFAF.

STR: Could be entered in line 12, 13 or 14 meant for sundry expenses – table Cf1

o Royalties for use of patents, brands, designs, software, trademarks and similar
rights (account 634)
They are deductible when their validity is in process.
They are not deductible when they are paid to companies located out of the CEMAC or ECCAS
zone and participating in the capital and management of the Cameroonian company. The royalties
in such cases are considered profit distributed and are subject to company tax and tax on income
from securities.
If paid to companies out of the CEMAC or ECCAS zone, who are not participating in the capital
and management of the Cameroonian company, they will be eligible to a 2.5% deduction of the
intermediary taxable profit.
o Remuneration of external agents (account 637)
They are deductible if the payment is for effective work done.

5)-Taxes and Rates (account 64)

They are deductible when they concern professional taxes paid within the accounting period
concerned and which are to be borne by the firm in relation to the operations carried out in
Cameroon with the calculation of net profit such as:
- Business licenses
- Registration duty
- Road taxes, etc
The following rates and taxes are not deductible:
- Fiscal Fines, penalties, fiscal condemnations for violation of the tax law, economic and
fiscal provisions.
- Company tax
- Personal income tax

Illustration 1.7
Penalties paid for the late declaration of VAT for the month of November, 156 000 CFAF
Fiscal analysis: Reinstate 156 000 CFAF.
STR: use line 9 of Cf1
Business license for the year 2019 2500 000F Fiscal analysis: it is deductible.

6)-Other charges (account 65)

The elements of account 65 are deductible when they fulfill the general conditions for deduction of
expenses. However, the following specific cases should be considered:
o Sitting allowance and other remuneration to administrators (account 6581)
They are deductible if effective work, such as attendance of board meetings, was done.
 NB: attendance fees granted to someone who is just a member of the board of directors are to be
reinstated.
o Gifts, donations and sponsorships (accounts 6582 and 6583)
They are not deductible. However, they can be deductible to the limit of 0.5% of annual turnover
before Turnover Taxes when they are paid to research and development bodies; to organizations
serving public and general interest, that are either of philanthropic, educational, sporting, social or
scientific nature situated in Cameroon or within the CEMAC zone.
According to the 2010 finance law, charges of accounts 6582 and 6583 are fully deductible when
granted to:
-the State or its decentralized organs for the acquisition of antiretroviral drugs for the treatment of
HIV/AIDS;
-Recognized organizations with fiscal residence in Cameroon, for research and development in the
domain of agriculture, health and life stock breading.

The 2013 Finance Law further stipulates this:

Gifts and donations granted to clubs participating in the elites national competitions or organizers
of official sport competitions are deductible when they are justified and within the limit of 5% of
the annual turnover realized within the fiscal year.

Illustration 1.8
The following gifts and donations were given out by awacam during the year 2019:
650 000 CFAF to SAJOCA-BAFUT an Orphanage.
8000 000F given to Fecafoot to support Elite 1
Expenses incurred in providing a school in Gabon with benches, 900 000 CFAF
4000 000F given to the state to help purchase antiretroviral drugs
Present the fiscal analysis of each case assuming the turnover realized this year 2019 was 60 000
000 CFAF

Solution:
Case 1: Deductible donation: 60 000 000 CFAF x 0.5% = 300 000 CFAF. Non-deductible
donation: 650 000 CFAF – 300 000 CFAF = 350 000 CFAF, to reinstate.

Case 2: Deductible donation: 60 000 000 CFAF x 5% = 3000 000 CFAF. Non-deductible
donation: 8000 000 CFAF – 3000 000 CFAF = 5000 000 CFAF, to reinstate. Case 3: gifts to a
foreign country is not deductible. Reinstate 900 000F
Case 4: completely deductible since it is given to the state to fight against HIV/AIDS STR: use line
10 of Cf1
o Operating provisions (account 659)
General conditions of deducibility:
The provision must be related to a deductible expense
The provisions must be probable and not only possible
The provisions must have a specific reason
It must be related to, and recorded during, the accounting period of calculation of company
tax
The provisions must be recorded in the statistic and tax return
The deductibility of provisions can be summarized as follows:
Nature Of Provisions Deductibility Reasons
Provision for company tax No The company tax is nondeductible
Provision for doubtful customers Yes If probable
No If imaginary (especially for amount)
Provision for state debts No Not fiscally deductible
Provision for fire accidents No Incidental (no assurance for the occurrence of
fire)
Provision for renewal of vehicle No Investment
Provision for depreciation of securities yes If probable (current cost < purchase cost)
and for depreciation of stocks
Provision for sundry incidences No Incidental
Provision for works or sales guarantees No Incidental
Provision for constitution of retirement No Incidental
or lay off funds
Provision for life insurance No Incidental
Provision for paid leaves No Nondeductible for the amount to be paid as
leave allowance is known and not probable.
Reinstate the provision of current year and
deduct the provision of previous year.

Concerning credit establishments, the deduction of provisions for doubtful debts and commitments
shall be effected as follows:
- Two years for bad debts and doubtful commitments whose risk are not covered either by collateral
securities or state guarantee . Deductions may not exceed 50% of bad debts and doubtful
commitments per annum.
- Three years for bad debts and doubtful commitments whose risk are not covered by collateral
securities. Deductions may not exceed 25% of such bad debts and doubtful commitments for the
first year, 50% for the second year and 25% for the third year.

The situation of these provisions must be definitely determined at the end of the third year of their
constitution, with the exception of those which concern bad debts and commitments brought before
the law courts.
NB: in no event shall any provision be constituted for charges accountable, by their nature in the
year which they were incurred.
Illustration: Operating provisioned exp. For:
- stock when current cost greater than purchase,
- state debts
Fiscal analysis: reinstate since the loss is not probable in the first situation and also reinstate in the
second situation since the state will always pay its debts.

7) Personnel expenses, (Account – 66)

- They involve remunerations paid to workers or personnel of the enterprise (i.e. salaries, benefits,
allowances etc…). They are deductible if general conditions are met and if effective work was
done.
o Employer’s social contribution (account 664): they are deductible if the receiving
organization is in Cameroon.
However when it concerns employer’s contribution to a foreign old age pension fund for the benefit
of an expatriate, the deductibility is limited to 15% of the basic salary of the worker concerned.
o Paid leaves (account 6623): they are deductible for the period during which the
employee effectively takes his/her leave.
o Flat allowance paid to personnel (account 663): they are deductible if:
- They are incurred fully, exclusively and necessarily in the performance of the duties of the
enterprise;
- They are not exaggerated in relation to the post held by the beneficiary;
- They respect the non-cumulative principle (paying once for an item)
Sums paid to managerial or senior staff of a company on account of compensation (indemnities) of
employment or service fees and which do not correspond to a real expense of duties held or
exercised are non-deductible expenses. For example, the financial manager of HYSACAM receives
milk allowance meant for field workers against dust and odor they inhale. This type of allowance
should be reinstated.
Remunerations or salaries of whatever nature paid to directors of sole proprietors, joint stock
companies are non-deductible.
8) Financial expenses (account – 67)
o Interest paid to financial institutions: interests on borrowings acquired for the need of the
enterprise are deductible.
o Interest paid to shareholders and managers
Interest paid to shareholders for money put at the disposal of the company other than share capital
are deductible if the rate of interest does not exceed the central bank interest rate increased with 2
points (2%). E.g. If the central bank rate is 10%, then maximum interest to be deducted should be
10% + 2% = 12%
NB : However, such deduction shall possi-ble with respect to partners who di-rectly or indirectly own at
least 25% of the share capital or corporate voting rights only if:
- The sums of money made available by all the partners do not exceed one and a half times the amount of
equity. Otherwise, interest on the excess amount shall not be deduct-ible;
- There interest paid to the said part-ners does not exceed 25% of profit before corporate tax and before de-
duction of the said interest and amortizations taken into account in determining such profit. Otherwise, the
excess amount of interest shall not be deductible.

Illustration 1.9
Case 1: Interest paid to Mr Ngwe 6 600 000 CFAF for a sum of money of 45 000 000 CFAF lent to the
company on 1 April of this year. Central bank interest rate: 12%.
FISCAL ANALYSIS: Deductible interest: 45 000 000 x (12+2)% x 9/12 = 4 725 000 CFAF.
Non-deductible interest: 6 600 000 – 4 725 000 = 1 875 000 CFAF.

STR: Reinstate using line 6 of table cf1.

Case 2: A group of shareholders who owned 50% of the equity(equity is 100 000 000F) actually borrowed
160 000 000F to the company and were paid annual interest at the rate of 13% on the loan meanwhile the
central bank rate is 9.5%. present the fiscal analysis.
FISCAL ANALYSIS: interest paid 160 000 000*13*1/100= 20800 000F
Deductible interest 150 000 000*11.5*1/100 =17 250 000F
Non deductible interest : 20800 000-17250 000= 3550 000F
NB: deductible interest is calculated on a maximum of 1.5*equity= (1.5*100 000 000)

o The following financial provisions are non-deductible.

Provision for taxes
Provision for fines and penalties
Provision for losses on exchange.
(9) Depreciation expenses: (account 68)
They are deductible when:
The depreciated asset futures in the balance sheet
They should concern the period.
They are calculated using the constant or straight line method as stipulated by the tax
code.
NB:
- According to sect. 7 of the GTC, the threshold for expendable equipment and tools which should
be recorded under fixed assets is 400,000fcfa.
- Case of deferred depreciation (line 18, table 22 STR): when a company has made a loss,
deductible depreciations are reinstated to bring the negative net income to zero. This practice
defers the deductibility of the amount of depreciations to the coming years.
(10) Provisions (account-69)
Generally, elements of account 69 are deductible when they respect the general conditions. The
following are not deductible:
Provisions for heavy repairs
Provisions for fines and penalties
Provisions for taxes
Provisions for losses on exchange
They are therefore deductible only when they have as base a past obligation (legal or constructive) ;
They are reliably measured and there is probability of loss of assets (e.g. money).

11) Other specific expenses

o Sumptuous expenses: these are expenses on non-business related issues. They are in
principle non-deductible.
o Theft, proper losses and others (account 658/81 and others):
Any loss or shortage of asset that is caused by any of the following situations is deductible if the
company has engaged against the act a legal and punitive procedure: embezzlement, theft, or
bankruptcy of a debtor.
o The case of previous losses:
According to Section 12 of the GTC, any loss sustained in a given year shall be considered as an
expense on the following year and deductible from profits made in the coming years. Should this
profit be inadequate for the deduction to be made in its entirety, the loss still outstanding shall be
carried forward to subsequent years up to the fourth year that follows the year of the loss. For
structural projects, the prescribed period is five years.

B. FISCAL ANALYSES OF REVENUE

Generally conditions for the taxation of revenue:
- The revenue should concern the fiscal year in question;
- The revenue should not be understated;
- The revenue should not relate to a tax allowance;
- The revenue should have been recorded or accounted for.

Specific conditions:
(1) Sales revenue (account 70)
They are taxable, net of commercial deductions.
(2) Operating subsidies (account 71); taxable if they concern the period.
(3) Self-constructed assets (account 72); they are taxable so far as the corresponding charges are
deductible.
(4) Variation of stocks of items and services produced (account 73); they are taxable in as much
as they are compensated for deductible charges.
(5) Other revenues (account 75)
Taxable but for few exceptions
Specifications:
o Operating provision written back (account 759)
They are not taxable when they are related to non – deductible provisioned expanses. e.g. Written
back provisions on paid leave.
o Indemnity for life insurance on behalf of the company: They are taxable with deduction of
insurances premium paid for life insurance on behalf of the company which were previously
reinstated.
o Tax credits of deductible taxes are taxable.
E.g. Business License tax, Registration Duties. Any reimbursement of these taxes by the
taxation office is taxable. Tax credits are receipt of the year of notification. This should not be
confused with the tax credit related to the company tax recorded by the credit of account 899,
which will escape from taxation and will only come as a deduction of the company tax payable.
(5) Financial revenues (account 77): elements of account 77 are taxable when they fulfill the
general condition for taxation of revenues; however, they are some specific aspects to be treated:
o Dividends and interest on deposits (line 22, table 22 STR standard system):
The tax on dividends and interest on deposits is withheld at source by the person making the
payment and is subtracted from the annual company tax liability by the company receiving the
dividends, so as to obtain the net company tax payable. This provision does not apply to parent
companies which receive dividends from their subsidiary firms.
Practically, accountants record dividends and interests in one of the two manners stated below:
First alternative: they record only the payment of the dividend or interest at its net value by:
Dr. Cash account (by the net dividend or interest)
Cr. 77 Financial revenues (by the net dividend or interest)
In this case, during the fiscal analysis of revenues at the end of the fiscal year, the deducted tax on
dividend or interest is reinstated into the accounting net income so as to actually tax the gross
dividend or gross interest. After the calculation of the company tax on the basis of the taxable net
income, the tax is then deducted from the company tax since it was an advance on company tax.
Second alternative: they record both the declaration of the dividend or the interest at its gross value
and its payment at its net value as follows:
Dr. Cash account or 4711 sundry debtors (by the net dividend or interest)
Dr. 4478 state, taxes deducted at source (by the income tax to be deducted at source)
2q Cr. 77 Financial revenues (by the gross dividend or interest)
If this alternative is used during the fiscal year, the deducted tax on dividend or interest shall no
longer be reinstated to the accounting net income during the fiscal analysis of revenues at the end
of the fiscal year. However, after the calculation of the company tax on the basis of taxable net
income, the tax is then deducted from the company tax since it is an advance of the company tax.
NB- Financial provisions written back related to non-deductible provisioned expenses are not
taxed.
- Elements of account 78 are taxable.
(6) Provisions written back (account 79): they are not taxable when they are related to a non-
deductible provisioned expense.
(7) Other specific aspects of revenues
o Gains on disposal to be reinvested: (line 20, table 22 STR, standard system) previously
they were not taxed but this advantage regime was canceled by the 2006 finance law; thus
henceforth they are taxed and by implication line 20, table 22ST, standard system does no
longer apply.
o Net dividends from subsidiary firms (line 21, table 22 STR, standard system)
Determination of the taxable profit of the parent company
It should be noted that the net dividend received has already been taxed on the account of:
Company tax at the rate of 33% at the level of the subsidiary firm;
Tax on income from securities deducted at source at the rate of 16.5%.
Thus the parent company receives the income net of the deduction of the above taxes.
In order to avoid double taxation at the level of the parent company, the net proceeds received from
the subsidiary firm should be excluded from the taxable profit.
The parent company incurs some expenses in collecting the dividends from the subsidiary firm.
These expenses are non-deductible and therefore should be reinstated to the profit. According to
section 13 of the GTC, the expenses are evaluated at a flat rate of 10% of the net amount of the
dividends.
NB: the shareholding proportion of the parent company in the subsidiary company should not be
less than 25% and the parent and subsidiary company should have their registered offices in an
ECCAS state.
Practically, the fiscal treatment of these proceeds is as follows:
Step 1: determine the amount of tax on income from securities deducted at source and reinstate, if
the accountant recorded just the net dividend.
Step 2: deduct from the profit the net proceeds received after having removed 10% as expenses
calculated on the net proceeds (line 21, table 22 STR)
NB: That is to say; net dividends less 10% (83.5% -10%) is not taxed when parent companies are
concerned.
Illustration:
The profit before tax of NITO Plc is 7800000fcfa with a net dividend of 350700fcfa received from
the subsidiary firm situated in the CEMAC zone in which NITO Plc has a shareholding of 32%.
Determine the taxable profit and the company tax of NITO Plc.
Solution:
Net profit before tax…………………………………...7800000
Reinstatements:
Tax on dividends: (350700 / 0.835) x 0.165……..69300
Deductions:
Recovery expenses: 350700 x 10% =35070
Exoneration: 350700-35070 = 315630………..(315630)
Taxable profit ………………………………………….7553670
Company tax payable 7553670 x 33%..........................2,492,711
NB: the tax deducted at source in this case is not an advance of the company tax. Thus the
provision of section 17 of the GTC is not applicable when it concerns parent companies

Determination of the deduction at source carried out by the parent company on dividends
received from subsidiary firms.
According to section 39 of the GTC, if the parent company received dividends from its subsidiary
for the year 20X0 and these dividends are distributed by the parent company to its shareholders by
the end of this same year 20X0, the tax borne by the dividends (before being received by the parent
company) shall be deducted from the amount of the tax owed by the parent company.
e.g. if ND = 350700, then at the level of the parent company it is taxed by 33%.
So net dividend to be shared by parent company = 350700 – 33% of 350700. = 234969
PIT on shared dividend = 16.5% x 234,969 = 38,769.9
But the GD was taxed at source by the subsidiary; i.e. 420,000 x 16.5% = 69,300
- If dividend is shared in the same year received, then the amount to be distributed is:
Amount of dividend taxed at 33% = (420,000 – 90% of 350,700) = 104,370
Company tax = 104,370 x 33% = 34,442
Dividend distributable = 350700 – 34,442 -0
- If paid next year,

APPLICATION EXERCISES
EXERCISE 1
The KETCH joint stock company is a public work enterprise of the Cameroonian nationality
created since 2010 in Douala with a capital of 800 000 000 FCFA totally liberated and divided as
follows:
MKEUTCHA JEAN……………………………………………………….22%
GUIEFEBOP………………………………………………………………20%
NGNONTSOKO JORDAN ………………………………………………15%
KUEBOVE…………………………………………………………………17%
ASQUINI ENCORAD Italy……………………………………………….18%
SOCIETE NATIONALE D’INVESTISSEMENT (SNI) ………………..10%
Its result account established on the 31st December 2017 reveal the following:
-Result of ordinary activities (ROA)…………………… 250 000 000 FCFA (C/B)
-Result of off ordinary activities (ROOA) ………………20 000 000 FCFA( D/B)
During the fiscal control after the deposit of the STR on the 31/12/2017, the following information
was extracted from the management accounts.
1-Account 61 -Transport: 6 000 000 FCFA
Of which 1 500 000 FCFA was reimbursement of displacement expenses to the technical director
for the prospection of the Central African market under construction.
2-Account 62-External services
Renting of technical equipments:
-To ASQUINI ENCORAD Italy against the monthly rents of 5 000 000 FCFA.
-To Y-CAM CAMEROUN against trimestrial rent of 9 000 000 FCFA.
GUIFEBOP receive from the company 70 000 FCFA and 150 000 FCFA for monthly rents on a
building and a truck respectively.
3-Account 63-Other external services: Honoraries for technical studies to ASQUINI ENCORAD
Italy 60 000 000 FCFA.
-The company use to buy and sell without transformation, some products bought abroad, of
which the situation (stock structure) for the 2017 financial year is as follows:
-Opening stock: 5 616 000 FCFA
-Closing stock: 1 296 000 FCFA
-Purchases of the year 8 200 000 FCFA
The company has paid 656 000 FCFA abroad for brokerages on purchases.
4-Account 65 other expenses:
-Gift and donation: -To the Bafut charitable house 2 725 000
-To FECAFOOT Yaoundé main office 31 500 000 FCFA
- 5-Account 66- personnel expenses:
-The technical director of the KETCH joint stock company receive a forfaitery allocation
(displacement indemnity) of 250 000 FCFA per month for his multiple displacements.
6-Account 67-Financial and assimilated expenses.
-The KETCH company received:
-30 000 000 FCFA from BICEC since the 1st of February 2017
-Some shareholders have deposited money in the company’s bank account:
Name of the shareholder Sum deposited (in Date of deposit % of shares held
FCFA)
GUIEFEBOP 80 000 000 01/07/2016 18
NGNONTSOKO 60 000 000 02/08/2016 15
JORDAN
KUEBOVE 30 000 000 01/07/2017 04
These funds have been remunerated at the rate of 13% per year for GUIEFEBOP and
NGNONTSOKO and at the rate of 12% for KUEBOVE. The BEAC rate passed from 9,5% to 10%
on the 01/07/20117.
7-Account 68 -Depreciation expenses: The first three annuities of depreciation of a transport
material bought for 5 000 000 FCFA and depreciated by the degressive depreciation are 500 000
FCFA, 1 800 000 FCFA and 1 080 000 FCFA respectively as of the 31/12/2017.
8-Account 707-Accessory incomes.
-The joint stock company KETCH has received and recorded the gross rents on a part of its
headquarter building that it rents to the joint stock company DAFIC at 500 000 FCFA per month.
9-Account 77-Financial and assimilated revenues.
The joint stock company KETCH has recorded dividends amounting to 30 000 000 FCFA from the
Ltd partnership “TRAVAUX Modernes “of Douala where it detents 20% of the capital. The
dividends received by bank cheque amounted to 25 050 000 FCFA.
-The joint stock company KETGH equally received a net dividend of 4 926 500 FCFA for inter-
company investments in BRASSERIES du CAMEROUN where she detents some shares.
10-Account 81 and 82
-The disposal of a tractor during the financial year produced an increase in value of 10 000 000
FCFA.
11- Fiscally exonerated revenues 2 540 000 FCFA
12-Deficit of 2016 4 780 550 FCFA

WORK REQUIRED
1-Calculate the fiscal profit of the joint stock company KETCH as of the 31/12/2017
2-Calculate the company tax, knowing that:
-The turnover tax free realized in 2017 was 500 000 000 FCFA and that the joint stock company
KETCH spontaneously paid all the monthly tax advances on the company tax.
3- Determine the net profit to be shared.

APPENDIX 1. TABLE CF1 of the STR for the determination of the taxable income.
Business name:
Address:
Identification number: Financial year ending 31-12-20 _ _ Duration (in month):__
DETERMINATION OF FISCAL PROFIT OR LOSS
Line AMOUNTS
BALANCE OF NET PROFIT NET PROFIT BEFORE TAX 01
BEFORE COMPANY TAX NET LOSS BEFORE TAX 02
 REINSTATED FOR THE COMPUTATION
Non-deductible Depreciation Expenses 03

OF THE FISCAL PROFIT OR LOSS

PARTLY OR NON-DEDUCTIBLE
EXPENSES OR LOSSES TO BE
Depreciation expenses recorded but deferred because of loss 04
Non-deductible Provisions 05
Non-deductible Interest on shareholders current accounts 06
Head office expenses 07
Non-deductible Taxes (other than income tax) 08
Non-deductible Fines and penalties 09
Non-deductible Gifts and donations: 10
Taxation at source of income from securities: 11
Sundry 1: 12
Sundry 2: 13
Sundry 3: 14
REINSTATEMENTS : TOATAL lines 3 to 14 15
Intermediary POSITIVE TOTAL : line 15 + line 1 or line 15 – line 2 16
Intermediary NEGATIVE TOTAL :Line 2 – line 15 17
Depreciation formerly deferred & allocated for the period 18
EXPENSES OR LOSSES,

Previously taxed or finally exonerated provisions reinstated. 19

FISCALLY DEDUCTIBLE

REVENUE OR PROFITS

Non-taxable part of gains on disposal of fixed assets 20

Subsidiary net income (after deduction of expenses & loss). 21
Other deductible incomes from securities 22
Deductible head office expenses 23
Sundry1________________________________________ 24
Sundry2________________________________________ 25
Sundry 3_______________________________________ 26
DEDUCTIONS: TOTAL line 18 - 26 27

FISCAL PROFIT OR FISCAL PROFIT FOR THE PERIOD :line 16 – line 27 28

LOSS FISCAL LOSS FOR THE PERIOD : Line27 – Line 16 or
line 18 + line 27 29

Bases of
HEADING line assessment Rate Tax principal
SITUATION OF THE FIRM

Fixed minimum tax Min. proportion to turnover 30 1%

TOWARDS THE FIXED

Company tax 31 35%

MMINIMUM TAX

Tax based on ICP $ NCP 32 22%

fiscal Profit for the Sole proprietor 33
period Profit from craftworks 34 11%
(line 30) income tax 35
36
Proportional tax Profit from agriculture 37
Proportional tax 38 15%
Total lines 32 to 38 39

APPENDIX 2. TABLE CF1A of the STR for the determination of the Income Tax Liability
Business name:
Address:
Identification number: Financial year ending 31-12-20_ _ Duration (in months):___
DETERMINATION OF INCOME TAX
HEADINGS Line AMOUNTS
TRANSFER OF FISCAL PROFIT OF THE PERIOD 01
DETERMINA

AFTER TAX
TION OF
PROFIT

Deductions on account of reinvestments made during the past 3 periods

Year N-3 Year N-2 Year N-1
HEADINGS
Authorised reinvestment b/f 02
 Deductible reinvestment = 50% x line 2 03
Total line 4
Reinvestment actually deducted 04
Reinvestment to be carried f/d 2 x (line7- line8) 05
DEDUCTIONS FROM REINVESTMENTS OF THE PERIOD
Reinvestments of the period authorized 06
Deductible Reinvestment = 50% x line 6 07 Total liine 8
Reinvestment deducted 08
(not exceeding 1/2 of fiscal profit of the period)
Reinvestment to be carried f/d = 2 x (line 7- line 8) 09
Allocation of losses brought forward
HEADINGS N-4 N-3 N-2 N-1

10 Total line 11
Losses brought f/d
Losses allocated for
the period 11
Losses to be c/f 12
FINAL FISCAL PROFIT(Total line 1,4,8 & 11) 13
CALCULATION OF TAX ON FINAL FISCAL PROFIT
HEADINGS Assessment basis Rate Line Amounts
Company tax 14
PIT not deducted at source 15
Deduction of PIT deducted at source 16
Other deductions 17
Net tax owed (line 14 + line 15) – (line 16 + line 17) 18
Additional council tax 19
TOTAL TAX (line 18 + line 19) 20
Taxes in advance (b/f line 13, Table 25 Col. 6) 21
Net payable 22
Tax credit 23
Account 89 : Income tax
Headings Amounts
891 Income tax for the period 24
892 Income tax arrears for prior periods 25
895 Fixed minimum tax 26
899 Tax credit and cancellation of tax on prior profits 27
Total 28

APPENDIX 3. TABLE CF1 Ter of the STR for the Determination of the Min. Income Tax
TABLE OF DETERMINATION OF FISCAL MINIMUM TAX
HEADINGS Amounts
FISCAL MINIMUM TAX BROUGHT FORWARD 01
TAX REDUCTION ON ACCOUNT OF PREVIOUS REINVESTMENTS
PERIODS Reinvestments Base Actual base of the tax Reinvestments which
authorised and 50% X column reduction can be carried forward
brought forward 1 2 x col. 2 – col. 3
Year N-3 and Previous 02
Year N-2 03
Year N-1 04
TOTAL 05
x (tax RATE) 06
TAX REDUCTION ON ACCOUNT OF REINVESTMENTS FOR THE FINANCIAL YEAR
Reinvestments authorised for the period 07
Base of the tax reduction (50% x line 7) 08
Actual base of the tax reduction 09 x ((tax rate)
Reinvestments which can be carried forward 2 x (line 8 - line 9) 10

HEADINGS
Proportional tax on income from securities not taxed at source 11 15% +
Progressive tax payable by the company and other artificial persons on concealed distributed revenues 12 60% +
Capital not taxed at sourced 13 25%

Deductions PITIS (Proportional income tax on income from securities) 14 -

Others 15 -
COMPUTATION OF THE FISCAL MINIMUM
Base Rates Amounts
Fiscal Minimum Tax 16
PITIS not retained at source 17
Deduction of PITIS retained at source 18
Other deductions 19
Net tax payable (line 16 + line 17) - (line 18 + line 19) 20
Additional Council Tax 21
TOTAL OF THE TAX (line 20 + line 21) 22
Advances Paid (transfer line 13 table 25 col. 6) 23
Net Payable (line 22 – line 23) 24
Tax Credit (line 23 – line 22) 25

SITUATION OF LOSSES BROUGHT FORWARD FOR BUSINESSES OTHER THAN THOSE ASSESSED ON ACTUAL PROFIT
FISCAL PROFI F THE PERIOD BROUGHT FORWARD 26
FISCAL LOSS OF THE PERIOD BROUGHT FORWARD 27
Imputations of brought forward losses
Headings N-4 N-3 N-2 N-1
Losses brought forward 28
Losses imputed 29
Losses which can be carried forward 30
FINAL FISCAL PROFIT 31
FINAL FISCAL LOSS 32

Account 89 : Tax on net income

Headings Amounts
891 Taxes on the net profit of the period 33
892 Tax arrears n previous net profits 34
895 Fiscal Minimum Tax 35
899 Tax relief and reductions on previous net incomes 36
TOTAL 37
THE COMPANY TAX RETURNS

UBA Plc, a general trade business, P.O. Box 39 Bamenda was created on the 1st January 2010 with a
capital of 600 000 000 CFAF. For the financial year ended December 31 st 2019, its main profit and loss
accounts showed the following data:
A) Ordinary activity profit or loss:
Total debit 274 352 500 CFAF
Total credit 508 362 500 CFAF
B) Extraordinary activity profit or loss:
Total debit 102 000 000 CFAF
Total credit 47 990 000 CFAF
From an examination of the profit and loss accounts, the following observations are made:
a. Paid professional expenses to a Chinese consulting firm 6000 000 CFAF for technical advice, to
a Cameroonian public works entity 5000 000F and for market research to a Nigerian entity
15000 000F .
b. Some shareholders who own less than 25% of the share capital put at the disposal of the
company funds of which deposits and withdrawals were as follows:
NGWA:
- Balance as at 01/01/2019: 6 000 000CFAF
- Deposit on 01/10/2019: 10 000 000CFAF
- Withdrawal on 31.10.2019: 4 000 000CFAF
RENE:
- Deposit made since the 01/01/2018: 20 000 000 CFAF
- Withdrawal on 30/06/2019: 11 000 000 CFAF
These funds have been remunerated at the rate of 16%. The Central Bank rate for advances of the
current year has been 11.5%.

c. The company organised a swimming gala for its main customer of which the cost found in the
accounting records of the company is 1 800 000 CFAF.
d. The following items appeared within sundry expenses:
900 000 CFAF of life insurance to the benefit of the General Manager;
30 000 000 CFAF of donation granted to the Cameroon National Football Team;
12 000 000 CFAF of donation granted to ‘Groupe FOKOU Plc’ on the occasion of its anniversary.
2800 000F to Bak orphanage located in Bertoua
200 000F to support flood victims in central African republic

e) The company received net dividends from securities of 10 020 000 CFAF, recorded at the net
value.
f. The rent of the warehouse amounting to 1200 000F was paid and recorded in the books of the entity.

g. The Commercial Manager had received a monthly amount of 300 000 CFAF during 2019 financial
year as lump sum allowance for travelling and representation made in West African, beside he was
reimbursed on justification 1000 000 CFAF for the same purposes.

h. Payments made to unknown persons: 5 000 000 CFAF.

i. The heavy transport equipment acquired on the 01/04/2018 with a lifespan of 4 years, for 40 000
000 CFAF has been depreciated following the reducing balance method.

j. Provisions and provisioned expenses

Provision for paid leaves: 12 000 000 CFAF
Depreciation on customer FRU under judicial liquidation: 9000 000 CFAF
Flat provisions relative to accounts receivable: 12000 000 CFAF

k.The accounts of rates and taxes indicated the following:

 Business license 1500 000F
 Windscreen license 40 000F
 Penalty for recovery 500 000F
 Penalty for late payment 200 000F
l. insurance paid for tourism vehicle 150 000F
m. provisions written back for paid leave 1000 000F
n.exempted revenues 4000 000F
o. Royalties paid to Kenyan company which takes part in the management of the Cameroonian
entity 1200 000F.
P. Total revenue tax inclusive 596 250 000F
q. losses brought forward:
Year 2018 2017 2016 2015
amount 2000 000 1000 000 4000 000 3000 000
r. advance taxes paid: on purchases 2000 000
0n turnover ?

Required :
a) Present the fiscal analysis of each transaction
b) Calculate the fiscal result
c) Calculate the tax liability and the net result
d) Present the accounting recordings of the tax knowing that the payment was done on 30th
march 2020.

SOLUTION
a. Fiscal analysis
description Calculation and amount Observation,Reinstatement or
deduction
a HOE general 6 000 000 Reinstate
Public works (1% 500 000 000) 5000 000 Reinstate (6000 000-5000
000)=1000 000
Market research 5%(500 000 000 =25 000 000 ok
b Shareholders interest 6000 000*2.5*9/1200=112 500 The excess of 558333 will be
. 16000 000*2.5*1/1200=33, 333 reinstated.
12000 000*2.5* 2/1200=50 000
20 000 000*2.5*6/1200=250 000
9000 000*2.5*6/1200=112500
c Swimming gala 1800 000 Reinstate luxury expense
d Life insurance 900 000F Reinstate
Gifts to lions 5%(500 000 000)=25 000 000 Reinstate excess 5000 000
Gifts to Fokou 12000 000F Reinstate since it is a profit
making institution.
Gifts to Bak 2800 000 0.5%(500 000 000)=2500 000 Reinstate excess 300 000
Gifts to CAR 200 000 Reinstate the complete amount
e Net dividend (10020 000/0.835)0.165= 1980 000 reinstate
f rents 1200 000 Completely deductible
g Displacement 300 000*12 =3600 000 Reinstate 3600 000F since he
allowance had reinmbursements
h Unknown persons 5000 000 reinstate
i depreciation Calculated 2018:40 000 Reinstate the excess (10781
000*37.5*9/1200=11250 000 250-10 000 000)
2019: 28750 000*37.5*1/100=10 =781 250F
781 250
Acceptable depreciation: 40 000
000/4= 10 000 000
j Provison:
Paid leave 12000 000 Reinstate
Customer Fru 9000 000 Deductible (ok)
Flat provision 12000 000 Reinstate since it is general
k Rates and taxes:
Business license 1500 000F Deductible
Windscreen license 40 000F Deductible
Penalty for recovery 500 000F Reinstate penalty
Penalty for late 200 000F Reinstate
payment
l Insurance 150 000 Reinstate since it is for tourism
m Provision WB for paid 1000 000 Deduct since it is related to a
leave non deductible item
n Exempted revenues 4000 000 deduct
o royalties 1200 000 Reinstate, since it will be
considered as distribution of
profit.
p Total revenue 596 250 000/1.1925=500 000 000
q Losses brought 2000 000+1000 000+4000 deduct
forward 000+3000 000
Advance taxes Turnover (2.2%500 000 000)= 11 Total advances paid 13 000 000
r 000 000
Business name UBA PLC TABLE NO CF1- DETERMINATION OF FISCAL PROFIT
Address: PO BOX 39 BAMENDA
Identification number financial year end 31-12-2019 Duration (in months)12
Determination of fiscal profit or loss
lig amounts
SOLDE DU RÉSULTAT NET AVANT NET PROFIT BEFOR TAX 01 180 000 000
IMPÔT SUR LE RÉSULTAT NET LOSS BEFOR TAX 02

EX PE NS ES O RLO SS ES P ART LYO RN OTD ED U CT IBLE T O BE ADD ED BACKF ORCO M PU T ATIO NO FT HE FISCALP ROF ITO RLOSS
Depreciation charges not deductable 03 781250
Depreciation charges recorded but deferred because of loss 04
Provisions not deductible
Sundry 3…DISPL A LLOWAN CE AND U NKN OW N PERS ON…
05 24000 000
14 8600 000

Interest on share holders current a/c not deductible 06 558 333

Head office charges 07 7000 000
Taxes not deductible (other than income tax) 08
Fines and penalties not deductible 09 700 000
Gratuities and donations not deductible 10 17500 000
Taxes at sources of income from securities 11 1980 000
Sundry 1 LUXURY……and royalty…………………………………….. 12 3000 000
Sundry 2………LIFE INSURANCE…AND TOURISM CAR………… 13 1050 000

AMOUNTS ADDED BACK : TOTAL line 3 to line 14 15 65 169 583

Intermediate POSITIVE TOTAL : line 15+ line 1 or line 15-line 2 16 245 169 583
Intermediate NEGATIVE TOTAL : line 2- line 15 17

Depreciation formerly defers. $ allocate for the period 18

EX P E NS ES O RLOS S ES ,RE VE N UE O RP ROF ITS F IS CALLY DE D U CT IB

Previous taxed on definitive. Exonerated provi reintegrate 19

Untaxible part of gains on disposal of fixed asserts 20
LE

Subsidiaries net income (after deduct. Of expense and loss 21

Others income from securities deductible 22
Head office deductible 23 6000 000
Sundry 1______PROV FOR PAID LEAVE WB__ 24 1000 000
Sundry 2_exempted revenues__________________ 25 4000 000
Sundry 3_________________________________ 26
Amounts deducted. Total line 18-27 27 11000 000

FISCAL PROFIT OR FISCAL PROFIT FOR THE PERIOD : line 16- line27 28 234 169 583
LOSS Fiscal loss for the period: line 27- line 16 or line 18+line 27 29
P O S IT IO N O F T H E F IRM T O W ARD S T H E F IX E D M IN I M U M T AX

HEADING lig Base of assessment rate Tax principal

Fixed mini tax 30 500 000 000 2% 10 000 000
Mini proport to turn over
31 234, 169 000 30% 70,250 700
Company tax
Tax base on Sole proprietor ICP and PE 32 22%
fiscal p for 33
the period income tax P from crafts 34 11%
line 30 35
36
Proportional tax P from agriculture 37
proportional tax 38 15%
total line 32 to 38 39
Business name TABLE NO CF1 Bis DETERMINATION OF THE INCOME TAX
Address
Identification number financial year end 31-12- Duration (in months)
DETERMINATION OF INCOME TAX
HEADINGS line AMOUNTS
TRANSFER OF FISCAL PROFIT OF THE PERIOD 01 234, 169,583
DURATION ON A./C of reinvestment made during past 3 periods
HEADINGS Year N.3 Year N.2 Year N.1
of profit after tax

Allow reinvest. b/f 2

Deductitable reinvest =50% line 2 3 TOTAL LINE 4
Reinvestment actually. Deducted 4
Reinvestment to be carried f/d 2 (line7-line8). 5
DEDUCTION FROM REINVESTMENT OF THE PERIOD
Reinvestment of the period allowed
heading N-4 N-3 N-
6
2 N-1
Determination

Reinvestment deduct = 50% line 6 7 TOTAL LINE 8

Reinvest deduct (not exceed, ½ of fiscal profit of the period 8
Reinvest to be carried f/d 2 (line7- line8) 9
Allocation of losses brought forward

Losses brought forward f/d 10 3000 000 4000 000 1000 000 2000 000 10 000 000
Losses allocated for the period 11 3000 000 4000 000 1000 000 2000 000
Losses to be c/f 12
Definitive fiscal profit (total line 1, 4, and 11) 13:
CALCULATION OF TAX ON DEFINITIVE FISCAL PROFIT
HEADINGS Assessment basis rate Li
Company tax 224 169 000 30% 14 67250700
PTI not deducted at source 15
Deduction of PTI deducted at source 12 000 000 15% 16 1800 000
Other deductions 17
Net tax owed (line 14, line 15) line 16+line 17) 18 65450 700
Additional council tax 19 6545070
TOTAL TAX (line 18+ line 19) 20 71995770
Tax in advance ( b/f line 13 table 20 Ccl. 6) 21 13000 000
Net payable 22 58,995,770
Tax credit 23

Account 89 : income tax

Heading
891 Income tax for the period 24 73,975770
892 Income tax arreas for prior periods 25
895 Fixed minimum tax 26
899 Tax credit and cancellation of tax on prior profit 27
Total 28 73,975770

b. Net result = accounting profit –tax

liability 180 000 000-73 975 770
=106,024 230
c. ACCOUNTING RECORDING
4492 13000 000
521 11000 000
4011 Payment of advance company tax 2000 000
137 234010 000
138 54,010 000
131 106,024230
891 73 975770
Annual tax liability
891 73,975,770
4492 Advances on TO and purchases 13000 000
44 PIT deducted at source 1980 000
4441 Net tax payable 58995770
Company tax payable
4441 58995770
521 58995770
Settlement of company tax balance

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