Introduction

Traditionally, public finances have been viewed as a simple means of covering public
expenditures. However, it is essential to acknowledge that political considerations have
always been intertwined with debates and fiscal decisions. Taxation is neither socially nor
economically neutral, as it serves as an instrument for policymaking and reflects a vision of
communal life, managed by public authorities overseeing public services.
At the heart of any tax, there is almost always a fiscal policy issue to address.
Fiscal policy is the use of government revenue collection (mainly through taxes) and
expenditure to influence the economy. It is one of the primary tools that a national
government utilizes to achieve specific economic goals, such as managing inflation,
encouraging economic growth, reducing unemployment, and stabilizing the business cycle.
Fiscal policy involves adjusting the level of public spending, taxation, and the balance
between them to achieve desired economic outcomes. For example, a government may lower
taxes or increase spending during an economic downturn to stimulate economic activity.
Conversely, it may raise taxes or reduce spending during periods of economic expansion to
control inflation and manage the growth of the economy.
In summary, fiscal policy plays a crucial role in managing and shaping a country's economic
landscape by leveraging government spending and tax policies.
Fiscal policy primarily entails two key aspects: first, authorising expenditures for various
public services and initiatives, and second, determining the source of funding for these
expenditures, with taxation being the principal means of generating the required revenue.
Central to this entire process is the government budget, which serves as the primary tool for
implementing fiscal policy.
The government budget outlines projected revenues and expenditures over a specified period,
typically a fiscal year. It is a comprehensive financial plan that demonstrates how the
government intends to allocate resources among its different functions and programs. The
budget serves as a blueprint for the government's priorities and goals, reflecting the decisions
made through fiscal policy.
There are two main components of a government budget:
1. Revenue: This includes the projected revenue collection by the government through
taxation, fees, fines, and other income sources. Taxation is the primary means of
generating revenue and can take many forms, such as income taxes, Consumption
taxes, Wealth/property taxes and activities taxes.
2. Expenditure: This encompasses the projected spending by the government on various
public goods and services, generally divided into two:
- Functioning or recurring expenditures;
- Investments expenditures.
The difference between the government's total self generated revenue and total expenditure
determines the budget balance. A balanced budget occurs when self general revenue
projections such as revenue from taxes, levies etc, and total projected expenditures are equal.
A budget deficit occurs when total projected expenditures exceed total projected self
generated revenues, while a budget surplus results from self generated projected revenues
exceeding projected expenditures.
In summary, fiscal policy plays a crucial role in managing public finances and driving
economic growth by balancing the need for government spending with the ability to generate
revenue, primarily through taxation. The government budget serves as a central instrument in
implementing fiscal policy and demonstrating a government's priorities and goals.
One of the primary questions when it come to budget management is whether a particular
expenditure will be authorised. If the decision is affirmative, the next step is to determine
whether the expenditure will be covered by taxes, borrowing, or cash resources. Therefore,
fiscal policy serves two key objectives: deciding on expenditures and determining how to
fund them.
Once it has been decided that an action must be undertaken for the benefit of the general
public, which necessitates expenditure, the source of funding must be determined. This
involves budgetary management. More specifically, the question arises as to whether, given
the nature of the expenditure and the desire to distribute the burden among citizens in the
most equitable manner, it is appropriate to resort to taxes or borrowing.
It is generally considered appropriate for investment expenditures, which provide the
community with sustainable assets, to be funded by loans. By doing so, although undertaken
in the present, the benefits will be enjoyed by future generations, and thus, its cost should not
be shouldered solely by the current generation.
Conversely, it is more suitable for immediate or short-term consumption expenditures, which
do not leave lasting wealth in the hands of the State, to be financed through taxes. This is
because these expenditures benefit the current citizens immediately, and it would be unjust to
burden future generations with the costs of present satisfaction through borrowing.
This is why tax revenue remains the most significant source of government revenue to this
day, underscoring the importance of tax administration in mobilising tax-related revenues to
cover state expenditures.
Consequently, it is crucial that taxes correspond to the services provided, i.e., the payment
made to the State in exchange for the protection of the rights it affords its citizens. This
concept forms the basis of the benefit doctrine, which asserts that there must be equivalence
between the utility that citizens derive from the public services they consume and the fiscal
"price" they pay.
As the functions of the state have expanded, justified either by the need to compensate for
market failures or to ensure the harmonious development of industrial capitalism, public
spending has surged, particularly in infrastructure and social amenities such education and
health. This has necessitated a strengthening of the role and techniques associated with tax
mobilisation, affecting both individuals and companies.
This course, focusing specifically on Cameroon’s taxation, will enable us to explore some
fundamental concepts related to the taxation of corporate entities, which represents the
primary source of state revenue. It will also allow us to address topics related to Corporate
Income tax (CIT) (Title 1), then Personal Income Tax (PIT) (Title 2) before delving into
consumption taxation (VAT) (Title 3), we will examine the tax obligations (Title 4) imposed
on these entities.

PRELIMINARY TITLE: GENERALITIES

The generalities discussed in this course pertain to concepts related to taxation (I) and
business concepts (II).
I. GENERAL NOTIONS ABOUT TAXATION
Taxation is a legal science that intersects with several other branches of legal sciences. It has
been said that "behind each legal act in an individual's life or each accounting entry of a
company, there is a tax treatment whose non-compliance can have significant consequences,
and ignorance of favourable tax provisions can result in substantial revenue loss." Here, we
will explore the notion of tax, its characteristics, objectives, its distinction from taxes and
fees, as well as differentiate between direct and indirect taxes, while gaining an
understanding of the sources of tax law.
1) Tax
Among the many definitions, we can use Gaston Jèze's, which states that a tax is a monetary
payment required by authority, definitively and without consideration, to cover public
expenses.
This definition highlights its neutrality since tax can serve as an instrument of public policy, a
social or moral factor, and a foreign policy factor.
Overall, tax can be understood as a mandatory "pecuniary" levy imposed by the State or local
authorities on a definitive basis, without direct compensation, to ensure public expenditure
coverage and achieve other economic and social objectives.
2) Characteristics of Tax
 The tax is a levy (transfer of funds).
 The levy is mandatory (sanctions and penalties in the event of late or non-payment).
 The tax is not allocated (financing of the public budget without prior allocation).
 Tax is without direct consideration (the person or entity paying tax is not entitled to
demand immediate direct benefits in return for the sums paid).
3) Objectives of Tax
The primary objective of tax is to finance public expenditure by the State.
Another objective is income redistribution. Taxation can be seen as a corrective mechanism,
addressing the imperfections of the free market, which does not lead to a fair distribution of
wealth (with the objective of reducing social inequalities).
Taxation can also be used to influence individual and collective behaviors, whether by
granting tax incentives or imposing penalties for non-compliance.
4) Direct and Indirect Taxes
Direct taxes are levied directly on the income or wealth of individuals or legal entities, such
as income tax or corporate tax.
Indirect taxes, on the other hand, are levied on the consumption of goods and services, and
the burden can be shifted from the seller to the buyer, as with value-added tax (VAT) or
excise duties.
5) Sources of Tax Law
Tax law is derived from various sources, including constitutions, tax codes, international
treaties, case law, and regulatory texts issued by tax authorities.
These sources of law define tax bases, rates, exemptions, and deductions, as well as the rights
and obligations of taxpayers and tax authorities.
PART I: TAXATION OF BUSINESS INCOME
In the context of this course, we will focus on three key taxes concerning the taxation of
business income: Corporation Income Tax (CIT) (Chapter 1), Personal Income Tax (PIT)
(Chapter 2), and Special Income Tax (SIT) (Chapter 3).
CHAPTER 1: CORPORATE INCOME TAX (CIT)
A corporate entity is an autonomous legal body comprising two components: an economic
component consisting mainly of material and financial resources, and a social component
consisting of human elements. These components work together to produce marketable goods
and services.
PARAGRAPH 1: SCOPE OF CORPORATE INCOME TAX
Corporate Income Tax (CIT) in general is a tax levied on the income of legal entities engaged
in profit-making activities. Only the profits of companies operating in Cameroon are taxable,
subject to international tax treaties. However, not all legal entities are subject to this tax; a
distinction is made between liable entities (1) and exempt entities (2).
SECTION 1: ENTITIES SUBJECT TO CIT
Subject to the provisions of Article 4 of the General Tax Code and specific tax regimes,
liability to CIT depends on the legal status of the company, the activities carried out, or the
taxpayer's choice.
A. Entities Liable by Virtue of Law
These entities are subject to corporate income tax once it is established that they engage in
profit-making activities, regardless of their purpose. The following entities are automatically
subject to CIT:
 Public limited companies, including single-member companies
 Limited liability companies, including single-member companies
 De facto companies
  Cooperative companies and their unions
 Public establishments
 State bodies with financial autonomy
 All other legal entities engaged in profit-making operations
B. Entities Liable Under Certain Conditions
These structures are not inherently subject to corporate income tax; however, they become
liable under specific circumstances. This category includes civil companies and partnerships.
1. Non-trading entities or civil societies: Even when they do not take one of the forms
mentioned above, non-trading entities engaged in commercial, industrial, agricultural, or craft
operations are subject to CIT.
2. Public establishments and decentralized local authorities: Public establishments other than
scientific, educational, and assistance establishments, as well as associations and
decentralized local authorities, which are generally exempt from CIT under another
provision, become subject to CIT for income related to rental income, income from securities
not subject to income tax on securities available to them, and any other profit-making
activity.
C. Corporate Income Tax Options
Companies subject to other tax regimes have the option to choose to be taxed under the CIT
regime. Eligible entities include:
 Non-trading entities, under the same conditions set for partnerships
 Sole proprietors, partnerships, limited partnerships, and joint ventures
The option for CIT is irrevocable and not available to de facto companies and partnerships
resulting from the previous transformation of corporate companies. To be valid, the option
must be signed by all partners and notified to the tax administration at the place of taxation
within three months of the beginning of the fiscal year.
In the absence of an option, CIT only applies to the portion of profit corresponding to the
rights of:
 Limited partners in limited partnerships
 Partners not indefinitely liable or whose names and addresses have not been
communicated to the Administration in general partnerships
Liability to CIT in these cases depends on the company's "opaque" or "transparent" nature.
1. Concepts of Tax Transparency and Opacity
A company is considered fiscally opaque when shareholder identity is hidden behind shares.
The shareholder remains anonymous due to the shares forming a screen. According to this
principle, it is the company (legal person) whose income is subject to tax. The partner hidden
behind the "opaque" company is not considered a taxable person and is not targeted by CIT.
This concept applies to commercial joint-stock companies, including Public Limited
Companies (PLCs).
Tax transparency, on the other hand, reveals the partner's identity. The partner is the tax
subject targeted by the tax, forming the basis for taxation of persons subject to Personal
Income Tax unless they opt for the CIT regime.
2. Implications of Opacity and Transparency in Corporate Income Tax
Regarding corporate income tax, "opaque" companies are taxable by default. Thus, the profits
made by these structures are subject to CIT, with dividends distributed to partners being
taxed under Personal Income Tax (PIT) on dividends.
The profits made by "transparent" entities are not subject to CIT but are taxed as PIT at each
partner's level in different categories. This regime applies primarily to non-corporate entities,
with CIT being due only under the conditions specified in Article 3(2) of the General Tax
Code (GTC) or by option.
For limited partnerships, the tax treatment of profits distributed to partners demonstrates both
transparency and opacity. The share of income distributed to general partners, given their
status as partners with unlimited and joint liability for corporate debts, is subject to a
transparent tax system. This share of profits is not subject to CIT but PIT in their hands.
For limited partners, whose liability is limited to their contributions, the profit share paid to
them is subject to CIT. This profit share is first taxed under CIT, then PIT in the income from
securities category.
As a result, entities subject to CIT can be taxed by default or by choice. Some legal persons
are exempt from corporate income tax due to legal provisions or other regulations.

SECTION 2: EXEMPTIONS
Certain legal entities, although falling within the CIT scope, are exempt from paying it. These
exemptions are primarily provided by the CIT provisions of the General Tax Code (GTC),
while others are covered by specific provisions of the GTC or other legislative or contractual
texts.
A. General Exemptions
The following entities are exempt from CIT:
1. Agricultural Cooperative Societies: Article 4(1) of the GTC exempts cooperative
societies engaged in the production, processing, preservation, and sale of agricultural and
livestock products, as well as their unions, from corporate tax, provided they operate in
accordance with applicable laws. However, some operations remain subject to CIT despite
the company's overall exemption, such as:
 Retail sales made at stores separate from their main establishment
 Processing operations involving non-edible or non-agricultural products or by-
products
  Transactions with non-members
2. Agricultural and Pastoral Unions and Cooperatives: When operating under relevant
governing provisions, these entities are exempt from corporate tax.
3. Agricultural Mutual Credit Funds: Profits generated by these structures are exempt
from corporate tax. However, interest from credits granted to non-members remains taxable.
4. Mutual Aid Organizations and Associations: Exemptions are granted to mutual
companies and their unions if they are non-profit and do not generate profits for their
account. Otherwise, they become subject to corporate tax.
5. Non-profit Organizations' Profits: When non-profit associations organize public events
like fairs, exhibitions, sports competitions, and other events corresponding to their statutes'
objectives and recognized economic and social interests, any income generated is exempt
from corporate tax. This exemption applies when the income is used according to the
organization's purpose.
6. Decentralized Local Authorities and Public Service Boards: It is important to clarify
that this exemption does not apply to public establishments, which remain taxable under
Article 3(1) of the GTC when engaging in profit-making activities. The exemption solely
applies to activities carried out directly by decentralized local authorities or their public
service boards.
7. Public Utility Companies and Rural Development Organizations: Exemption is
granted when the activities performed are non-profitmaking in nature. The administration
may verify the nature of the operation by any means.
8. Low-cost Housing Organizations: This exemption is designed to promote social housing.
The social character is determined by the rent charged.
9. Clubs and Private Circles: Private circles and clubs are exempt from corporate tax for
their non-profit activities, such as services provided to members. However, taxable activities
include bar and restaurant operations, rental of premises for events, and other paid services
offered to third parties. These entities must maintain separate accounts for taxable activities.
10. Private Non-profit Educational Establishments: Private educational establishments are
exempt from corporate tax on profits from their main educational activities, including tuition
and registration fees, as long as their prices comply with state regulations. Income from other
profitable activities, such as selling school supplies or renting event spaces, remains subject
to corporate tax. The exemption applies to industrial and commercial profits under the same
conditions.
11. National Social Insurance Fund: The exemption applies only to contributions from
salary deductions and those intended for pension payments and other allowances.
12. Open-ended Investment Companies (SICAV), Mutual Investment Funds, and
Mutual Credit Funds: SICAVs, mutual funds, and debt funds are exempt from corporate tax
on profits generated within their legal purpose.
13. Economic Interest Groups: Economic Interest Groups (EIGs) are exempt from
corporate tax for the share of their profits distributed to individual members, provided they
operate according to relevant regulations. These profits are subject to Personal Income Tax
(PIT) or Corporation Income Tax (CIT) for the EIG members. Regardless of the distributed
income type, EIGs must withhold tax at the source.

14. Civil Companies with a Non-Commercial Purpose

According to Article 3 of the General Tax Code (GTC), civil companies are subject to
Corporate Income Tax (CIT) when they have a commercial purpose, have members already
subject to CIT, or have opted for CIT taxation.
Conversely, civil companies with a purely civil purpose, which do not meet the
aforementioned criteria, are exempt from corporate tax. In such cases, profits are taxable as
Personal Income Tax (PIT) in the category corresponding to the company's activity and are
taxed in the hands of the partners.
For instance, a civil real estate company that does not engage in commercial activities as
outlined in Article 3(2) of the GTC, and whose members are not subject to corporate tax,
would not be liable to pay CIT unless the company elects to do so. The income distributed to
the members will be taxed in their hands under the property income category.
B. Specific Exemptions
In addition to exemptions outlined in the General Tax Code, the Cameroonian government
has established specific exemptions from corporate tax to encourage growth in certain sectors
or support specific types of companies. These exemptions may be found in legislative texts or
conventions, such as the Mining Code, Petroleum Code, Gas Code, and the 2013 law on
private investment incentives in Cameroon. Examples of such exemptions include:
 Sole proprietorships with an annual turnover below XAF 10 million (except logging
companies, professional services, etc.) may be exempt from corporate tax.
 Transactions on real estate located in areas subject to the official list price may be
exempt.
 Promotion of youth employment may qualify for tax incentives.
 Income from agricultural activities may be exempt from corporate tax.
To navigate these exemptions and ensure compliance, seeking professional assistance or
consulting with the relevant government authorities is advisable. By understanding and
utilizing applicable exemptions, eligible organizations can reduce tax liabilities and focus on
their core operations.

SECTION III - DETERMINATION OF TAXABLE PROFIT

A. Methods for Determining Taxable Profit
The Concept of Profit: Profit can be defined as a monetary or material gain that adds to the
wealth of partners through a company. This definition helps distinguish between taxable
entities and other types of groupings. If a group seeks profit directly, it is subject to CIT.
However, if it pursues a non-profit goal, it will be classified as an association, which is
subject to CIT only under specific conditions. When a group seeks savings, profit is made
indirectly, and there is no corporate tax. This is the case with cooperatives.

Industrial and commercial profits (ICP) include income from the rental of movable property,
furnished premises, entertainment companies, transport, construction, and the provision of
services, excluding those where intellectual activity predominates in the formation of the sold
product. Agricultural activities closely related to commercial activity are also considered
ICPs. Due to the CIT's "totality" rule and the principle that the fate of an accessory follows
that of the principal, all operations within a commercial company generate ICPs. Even slight
commerciality of the operation is sufficient for CIT imposition, without determining whether
the commercial activity is predominant.
Determination of Taxable Profit: The General Tax Code (GTC) outlines two approaches
leading to the same result: the income method and the balance sheet method. Taxable profit is
determined from the company's accounting result, considering only operations conducted by
businesses located in Cameroon or those whose taxing power is attributed to Cameroon by an
international convention.
a. The Profit Method: This descriptive approach defines taxable profit as the difference
resulting from all operations performed during the financial year, regardless of their nature,
adding income from assets sold during or at the end of the operation. Taxable profit is the
algebraic sum of income and expenses incurred by the company during the financial year.
Taxable Profit = Income - Expenses
b. The Balance Sheet Method: The GTC provides this alternative approach, known as the
accounting or synthetic approach, based on the balance sheet theory. Net profit is the
difference between net asset values at the end of and beginning of the financial year.
Payments or contributions made by shareholders/third parties during the financial year should
be subtracted, while withdrawals made during the same year should be added. Tax
jurisdictions often use this more rigorous method to resolve disputes arising from CIT
imposition without company transactions occurring during the period. For example, a
dormant business receiving eviction compensation is taxable, even without operations
conducted by the company.
c. Deductible Expenses for Corporate Income Tax (CIT)
When determining taxable income for CIT purposes, the elements considered are taxable
income and deductible expenses. Deductible expenses for a financial year encompass all
operating expenses incurred by the company during that period. Some expenses arising in
previous years may also be deducted, as specified by law, such as deficits recognized over the
following four years.
Not all operating expenses are deductible for corporate tax purposes. The General Tax Code
(GTC) outlines conditions for deductibility, some of which are general, while others are
specific to the various expense types. Specific conditions for each type of operating expense
will be discussed later when examining individual expenses. For now, let's cover general
conditions:
i. Basic Conditions for Deductibility of Operating Expenses
Deductible expenses must meet these conditions:
 Directly serve the operation's interests and be related to normal company
management. Expenses exclusively benefiting company owners will be disallowed.
Expenses unrelated to the business purpose, such as gifts, will also be rejected.
 Reflect a decrease in the company's net assets. Expenses with no impact on net assets
won't be deductible, such as unreimbursed losses or expenses that offset liabilities.
Q: if a company owner uses the company income for personal reasons will those
expenses deducted to determine the tax amount.
 Be connected to taxable income and not explicitly excluded from deductions. Non-
deductible expenses specified by law (e.g., lavish expenses) fall under this category.
ii. Formal Conditions
Expenses must be:
 Justified by documents proving their occurrence and amount (invoices, acceptance
reports, etc.).
 Accounted for. Deductibility also requires posting accounting entries tracing
operations.
iii. Time Conditions
Expenses are deductible for a financial year only if incurred and accounted for during that
year. This principle of fiscal year independence/specialization requires deducting expenses
during the year incurred. Fiscal year independence encompasses understanding its scope and
identifying applicable exceptions.
d. Deductible Expenses
Since taxable profit derives from the accounting result, identifying tax-deductible expenses is
crucial, as not all expenses are deductible for PIT purposes. Non-deductible expenses must be
reintegrated into the result. Article 7 of the GTC categorizes deductible expenses, including:
 Overhead expenses
 Financial expenses
 Actual losses
 Depreciation
 Provisions
 Foreign currency-denominated receivables and debts
 Bonuses from partner transactions
Each expense type carries unique deductibility conditions and limitations, requiring careful
assessment to optimize tax liability and compliance.
 1. Overhead Costs: Overheads constitute charges and expenses directly resulting in a
net asset decrease. Overhead expenses include staff and labor expenses, premises,
equipment, insurance premiums, donations, subsidies, etc. The GTC provides specific
treatment for certain expenses in this category.
2. Direct/Indirect Employee Compensation: Direct or indirect employee
compensation (allowances, benefits in kind, social security contributions,
reimbursements) is deductible from company results provided it:
 Is not excessive relative to the service rendered
 Correlates with actual work performed
 Complies with applicable collective agreements
Employer contributions made abroad for expatriate workers' pensions are deductible up to
15% of their base salary.
3. Board Member Attendance Fees: Attendance fees paid to board members are
deductible from taxable profit if they compensate actual work. Fees paid to non-
participating directors will be reintegrated into taxable results.
4. Expense Reimbursements and Allowances: Justified expense reimbursements for
employees acting on the company's behalf and fixed allowances allocated to
managers/executives are deductible. In such cases, similar expenses should not
already be reimbursed to the parties, complying with the non bis in idem rule.
Companies cannot simultaneously deduct flat-rate allowances and actual expense
reimbursements for the same destinations.
5. Head Office Costs: Head office costs are expenses for effective services like
financial or accounting technical assistance and studies/coordination costs incurred by
foreign companies (often their parent company) for the benefit of Cameroonian
companies. These may include:
 Proven expertise transfer or supply
 Financial services like guarantees or intermediation
 Accounting support (e.g., audits, implementation)
 Studies conducted in the Cameroonian company's definite interest
Assessing the deductibility of overhead expenses requires examining each expense type's
unique conditions and limitations. Proper handling of overhead costs helps optimize tax
liability and compliance for businesses operating in Cameroon.
6. Commissions on Purchases and Sales of Goods: Commissions or brokerage fees for
goods purchased or sold on behalf of Cameroon-based companies are deductible up to
5% of the purchase/sales amount. For sales, revenue includes the sale price plus
insurance and freight costs. For purchases, the relevant amount excludes incidental
costs like transport and insurance. These commissions must be specially invoiced with
supplier/customer invoices, following regular invoicing procedures.
 7. Royalties for Patent and License Usage: Payments for valid patent, trademark,
design, and model usage are deductible. However, royalties paid to non-CEMAC
beneficiaries participating in the company's management or capital are considered
profit distributions, not deductions, and are subject to CIT and PIT.
8. Paid Holiday Travel Expenses: Deductible travel expenses apply to paid leave for
salaried partners, their spouses, and dependent children, provided the trip occurred.
9. Rental Expenses: Article 7-A(2) of the GTC allows rental expenses for CIT-subject
companies, provided they are not exaggerated compared to typical rents for similar
facilities.
10. Taxes, Duties, and Fines: Only professional taxes collected during the financial year
are deductible if related to Cameroonian operations. The following are not deductible:
 CIT and PIT
 Increases, fines, default interest, penalties for economic or tax-related legal violations,
confiscations, and other fees for offenses
 Indirect taxes definitely payable by third parties
 Taxes due by partners and deducted at the source (e.g., TSR, ISS, withholding taxes
on purchases), as these are the partners' responsibility
11. Insurance Premiums: Insurance premiums are deductible from taxable profits for
Cameroonian operations, including:
 Insurance against fire, natural disasters, and damage caused by exceptional
meteorological events.
 Insurance for company assets against work accidents, physical, material, and
immaterial damage caused to third parties, accidents, disease, invalidity, or death of
personnel.
 Credit insurance, discounts for uninsured customers, and work completion guarantees.
 Insurance premiums paid by exporters as part of export credit insurance.
Certain premium deductions may have limitations or specific conditions, and it is essential to
verify each deduction's eligibility and compliance with relevant tax regulations.
12. Gifts, Donations, and Subsidies: Generally, gifts, donations, and subsidies are not
deductible from a company's taxable profit. However, specific donations may be
deducted if they meet certain conditions.
13. Financial Charges: Financial charges are interest allocated to partners for funds
made available to the company beyond their capital shares, such as loans or additional
capital. These charges are deductible under the following conditions:
 The debt must be necessary and, in the company’s, best interest.
 Payments must be interest, not mere loan reimbursement.
 The debt must be supported by evidence, such as a loan contract.
For interest on loans granted by an associated company (directly or indirectly holding at least
25% of the borrower company's capital), interest is only deductible up to 75% of the amount
paid. Interest paid by a branch office is not deductible if the head office is domiciled outside
CEMAC and not subject to a similar tax.
14. Bad Debts and Reserves for Doubtful Debts: Bad debts are considered operating
expenses in the year they become irrecoverable and are deductible if:
 The debts result from operations producing taxable profit in Cameroon.
 Debts are related to goods or services sold/rendered within Cameroon.
 Impossibility to collect the debt is established with documents, such as a court
decision or a deed of renunciation signed by the creditor.
When meeting these criteria, the creditor company can deduct the corresponding amounts
from the taxable profit.
Reserves for doubtful debts are deductible if the company maintains accounting records per
Cameroonian standards, lists each debtor, and provides debtor aging. The deductible reserve
amount is based on the company's accounting data, corresponding to specific debts with low
collectability.
14. Losses: Deductible losses from taxable profit include:
 Actual losses on fixed or realizable assets.
 Irrecoverable debt losses after exhausting all means of amicable or forced recovery
under OHADA's Uniform Act on Simplified Recovery Procedures and Enforcement
of Debt Recovery.
15. Depreciation: Depreciation is the reduction in a fixed asset's value from use, time, or
technological change. It is an irreversible loss due to use, time, or obsolescence.
Depreciation involves spreading the asset's value over its probable duration of use
based on recognized standards.
Tax-deductible depreciation requires specific conditions:
 Not all assets are depreciable.
 Specific depreciation methods and bases determine deduction eligibility.
16. Provisions: Provisions are allowances for charges established during a financial year
to offset future losses or charges. They are specific, probable, and uncertain but likely
due to pending events from the same financial year. Provisions differ from prepaid
expenses, amortizations, and reserves.
Provisions are deductible from taxable income under certain conditions, with different types
of provisions having specific tax treatments.
17. Foreign Currency Probable Losses: Foreign exchange losses cannot create
deductible provisions, but currency translation differences and foreign currency
receivables/debts are valued at the end of each financial year using the exchange rate.
They are accounted for in determining taxable results for that financial year.
Translation differences on foreign currency debts of less than one year are deductible for the
same financial year's taxable result determination.
These guidelines help companies navigate the complex landscape of corporate tax regulations
in Cameroon, allowing for proper determination of taxable profits and ensuring compliance
with relevant tax laws. Consulting with a tax professional is advisable for accurate
interpretation and application of these provisions.
18. Bonuses from Operations with Associates: When a joint-stock company or Limited
Liability Company (LLC) owns shares/equity interests in another joint-stock company
or LLC, net proceeds from these shares/equity interests affected during the financial
year can be deducted from the first company's total net profit after deducting a portion
of costs and charges set by law.
19. Maintenance and Repair Expenses: Maintenance and repair expenses to preserve or
restore asset functionality are deductible, provided they don't increase the asset's value
or useful life. If such increases occur, expenses must be capitalized and deducted
through depreciation.
20. Research and Technological Development Costs: Fundamental research expenses
are deductible. If research leads to operational projects (inventions or patents),
expenses should be accounted for as intangible assets. Research not resulting in
operational projects should be deducted as current expenses. For sites selling
products/services, related expenses should be recorded as intangible fixed assets.
II. Income
Income includes sums received/to be received for delivered goods or services rendered.
Income types include:
 Current Operating Income
 Exceptional Operating Income
A. Current Operating Income
1. Direct Operating Revenue
a. Sales: Sales account for prices of goods sold, work done, or services provided by the
business. Sales considered for a financial year should relate to transactions within that year,
even if payment will be received later. Sales are influenced by off-invoice reductions
(discounts, rebates) which, to be deductible, must comply with articles 101 and 102 of the
GTC.
By accurately distinguishing between operating income types and understanding the
deductibility conditions, businesses can efficiently manage their tax liabilities and maintain
compliance with Cameroon's tax regulations. Consulting with tax professionals can provide
additional guidance for specific situations and help companies optimize their financial
strategies.
1. Direct Operating Revenue
b. Services: Income from services provided by companies is taxable per Article 6 of the
GTC, as it contributes to overall operational results within the financial year.
c. Accessory Income: Accessory income is not from the company's main activity but
contributes to total income determining the end-of-year result. Accessory and exceptional
income should be included in taxable profit calculations. Examples include:
 Property income from asset rentals (immovables and movables)
 Capital gains
 Financial income and foreign exchange gains
 Commissions, brokerage, and fees
 Royalties
 Grants, donations, subsidies, and legacies
 Exceptional compensation (e.g., insurance)
 Relief from previously accepted taxes and duties
Exemptions require strict interpretation; a product can only be exempt if expressly stated in
the law.
B. Exceptional Operating Income
Exceptional operating income includes non-recurring income from the company's main
activities. These can result from events like asset disposals or business restructuring. Some
examples include:
 Gains on asset disposals, including property, equipment, and investments
 Revenues from discontinued operations or restructurings
 Insurance compensation for business interruptions, natural disasters, or other
extraordinary events
 Gains from debt forgiveness or restructurings
Distinguishing between operating income types is essential for accurate tax reporting.
Businesses must understand income classification and related tax implications to manage tax
liabilities effectively. Consulting with tax professionals ensures compliance and can optimize
financial strategies.