@Tut
Hello please check this link
http://www.doingbusiness.org/data/exploreeconomies/cameroon/paying-taxes
Its the first tax called corporate income tax
@Abeiku
Thanks for your reply. This your withholding tax, what is the principal on which its calculated fom. Sub Total or Total All Taxes.
Warmest Regards
IR as an alternative minimum for the statutory corporate tax makes this situation even more complex. Since you have to know your turnover for the reporting period, and compare that to net taxable income to determine which is higher and therefore payable, what is the point of showing it on a sales invoice? It still has nothing to do with the customer.
Can you provide some link to a Cameroonian Ministry of Finance document that actually requires this to be shown on invoices?
With my method you enter the amount of withholding tax manually so you can decide if you want to calculate it on VAT inclusive amount cool, if you want to calculate on VAT exclusive amounts too it all possible.
The withholding tax function in manager calculate Withholding tax on VAT/Sales tax inclusive amounts. I tried to get it changed but instead Lubos added the ability to enter amounts if the rates isnāt working for you which works better.
You have been unable to explain your situation well.
Whatever your situation is, Manager.io currently can handle your situation.
@Tut
Thanks for your reply. The last picture of the invoice i put up, was a real one for a public institution, the reason for deducting IR on each invoice is to avoid accumulation, This way when an invoice is treated and paid, its IR is deducted instantly. You dont need to wait till end of financial year before paying it. You Pay As You Earn,
- Unfortunately I cant send you a link to the ministry of finance. Non Exist. I can however send you a link so you download an invoice in excel format. It could help decipher the problem.
https://drive.google.com/file/d/0B2uuiFNIIZGuRW9kTmlVNk5IbWc/view
Thanks
@Abeiku
This also sounds interesting. Please kindly check out the excel file in the link below, It is an actual invoice we did for a government corporation. May be it can help make more sense to what I have been trying to explain.
Thanks
https://drive.google.com/file/d/0B2uuiFNIIZGuRW9kTmlVNk5IbWc/view
This is the shared file
https://drive.google.com/file/d/0B2uuiFNIIZGuRW9kTmlVNk5IbWc/view?usp=sharing
None of this helps, @princeforchu. Youāve now given us a spreadsheet you generated that confirms the formulas used to calculate the example already provided in a screenshot. But the math was obvious without the formulas. The point Iāve been trying to make is that none of it makes sense.
You calculate and add VAT to the invoice subtotal, but apparently donāt expect the customer to pay the VAT. Instead, you calculate IR (payment of which is conditional upon knowing whether your regular tax is greater) and subtract it.
So which amount do you expect your customer to pay you? Through all this confusion, you have never said, I donāt believe. And why do you expect the customer to pay that amount rather than any other? What is your regulatory requirement?
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@Tut
Sorry I am a really bad explainer. Sorry I forgot to mention the amount the client is suppose to pay.
- The client is supposed to pay me 596 250 XAF (Sub Total + VAT)
- After I have paid the VAT (96 250 XAF) to the tax authorities, they will again go to my Sub Total deduct 2.2% (11 000 XAF) Like you said, its tax on earning,
Its the law in Cameroon and that is how it works, I really want to be able to empliment this is Manager.
Thanks
Well, @princeforchu, you can implement the necessary accounting in Manager. Create a custom tax code called āVAT - 19.25%.ā (There is not an in-built tax code for Cameroon, but one could be added if you request it). This tax code will take care of charging your customers for VAT, recording your liability to remit VAT collected to the government, and (if allowable) offset VAT you pay to others in the course of business. See this Guide: Create and use tax codes | Manager.
What Manager will not do is calculate the IR, because it is not related to the sales invoice directly and has nothing to do with what the customer owes you. And you may not even owe that amount to the government, if the standard corporate tax rate produces a higher amount for your reporting period. IR seems like something to be calculated and possibly paid when tax filings are due. Accordingly, IR has nothing to do with the amount receivable. I suspect that might be a term you adopted on your own, without regard to standard accounting terminology.
I donāt know if there are other users in Cameroon, but I think there probably are. No one has every raised this point before. And the procedure of showing an unrelated alternative tax payment on an invoice is not required anywhere else in the world that I know of. While tax rates, exemptions, and payment processes vary from country to country, most actual requirements turn out to be remarkably similar. Unless you can find some documentation explaining a requirement to show IR on invoices in Cameroon, I donāt think anyone is going to be able to help you.
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@Tut Thanks for your reply,
- I implement VAT in Manager with no problem.
- So there is just no way to implement what is found in the excel sheet I sent in Manager ??
Note: IR is a tax in cameroon, which means Tax On Revenue. Revenue is what you earn which has no tax yet on it.
Thanks very much for your contributions.
Correct, no way in that format on the client invoice.
However, the IR transaction itself could be recorded within Manager via a contra entry on either the Sales Invoice or the Receive Money.
Cr - IR Payable (which will be cleared via a payment to the government)
Dr - IR Paid (which will be cleared against any tax payable on the income tax return)
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In following @Brucannaās suggestion, @princeforchu, understand that the entries would be made only at the time of a definite event. That is, IR payable would only be credited when the tax was known for certain to be due. As it is described in the link you sent, the tax payable (IR or regular corporate rate) can only be determined after the fact, not at the time the sales invoice is raised.
Likewise, IR paid would only be debited when you actually remit to the government. Again, nothing to do with a sales invoice.
@princeforchu is correct that Public Corporations in Cameroon will (are obliged to) deduct the IR (translates as Income Tax on Revenue) when paying their suppliers.
It is borne by the natural or legal person who executes the contract and is deducted at source during the settlement of government contracts.
and from a Cameroon document on public corporations (translated, rates may have changed)
The above-mentioned deductions shall be made when paying the bills of
Suppliers and service providers at a rate of 19, 25% for VAT and
1.1%, 1.65% or 5.5% if applicable for the IR installment.
I suggest that @princeforchu find a real invoice, scan it, and show it here.
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This has been far too long a road.
The best Manager can do is to apply a 19.25% VAT tax code and mark the sales invoice for withholding tax. But in Manager, withholding tax is applied to the total of tax plus subtotal, not the subtotal. So rather than 2.2%, you will have to indicate withholding tax rate to be 1.84486373ā¦%. This will produce a sales invoice looking as below:
This presumes the customer owes you the subtotal plus VAT minus IR. If you want to show the label as IR 2.2%, that will require a custom template to substitute language. But note that this does not match the screen shot invoices @princeforchu provided, which are set up so the customer does not pay VAT, despite the fact that he said they did.
With that, I am bowing out of further discussion on this topic.
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I too was not able to make the necessary invoice. My best effort has a subtotal that is not really what @princeforchu needs.
Iāll just state the requirements as I see them in case @lubos wishes to make a custom tax rate for Cameroon state corporations.
The invoice must show:
- the Sub-total for all services and material supplied to the state corporation.
- the amount of the VAT at 19.25%
- the Total which is the sub-total plus the VAT
- the Income Tax Installment (IR) that the state corporation will deduct* from the invoice
- the Balance Due**, which is the sub-total minus the IR.
*I assume that the IR must appear on the invoice because the state corporation must be told the rate to apply to the supplier. There seems to be different rates for various corporations; sort of a self-assessment.
**The Balance Due does not include the VAT because this is an invoice for a state corporation who are obligated by law to deduct the amount from suppliers bills.
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Well, I lied. Iām back in the discussion.
@dcVest, what you say makes complete sense. But it directly contradicts what @princeforchu said. He said the amount the customer would pay on his example was the subtotal plus VAT. According to him, the IR was irrelevant. So @lubos should do nothing until @princeforchu can provide official documentation on what is required.
Agree, terminology seems to have gotten confused.
In case it is of help, Iāll point out that @princeforchu says in post 27 that the invoice shown in post 16 is a āreal one for a public institutionā.
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