The 2025 Finance Law introduced new tax deductibility rules in Cameroon, impacting the use of foreign accounting and tax services. These changes aim to improve tax efficiency, prevent base erosion and profit shifting (BEPS) and promote local expertise within the sector. CEMAC region.
Here is what this article will explain regarding the rules for corporate tax deductions;
Main changes in corporate tax deductions
Since January 1, 2025, fees paid to service providers outside CEMAC for accounting and tax services provided to Cameroonian entities are no longer deductible.
Previously, businesses could deduct up to 2.5% of their taxable profit for such expenses, but this provision has now been removed entirely.
Objectives of the new rules on corporate tax deductions
The new tax policy aims to promote local expertise, strengthen tax compliance and protect the national and regional tax base. We believe that the main motivations behind these changes are:
1. Encourage the use of local services
By excluding the tax deductibility of accounting and tax services provided by entities outside CEMAC, the law encourages companies to use local or regional service providers.
This measure supports the growth of the accounting and tax consulting sector within CEMAC and aligns with regional economic integration policies.
2. Preventing Base Erosion and Profit Shifting (BEPS)
Companies often use cross-border service transactions to shift profits and reduce tax liabilities in Cameroon. By prohibiting deductions for these specific expenses, the law aims to combat tax evasion and preserve Cameroon’s corporate tax revenues.
3. Improving tax transparency and compliance
Local service providers operating within CEMAC are subject to regional tax laws and regulatory oversight.
Ensuring that payments for accounting and tax services remain within jurisdictions where tax authorities can monitor compliance strengthens the administration and enforcement of tax rules.
4. Reduce foreign currency outflows
Cameroon and other CEMAC countries have exchange controls to manage capital outflows. This measure indirectly reduces foreign exchange outflows by discouraging payments to service providers outside CEMAC, thereby helping to stabilize the regional balance of payments.
5. Align with international tax practices
Many countries place restrictions on the deductibility of cross-border service fees to prevent aggressive tax planning.
This provision aligns with global trends in tax regulation, particularly the OECD BEPS framework, which aims to prevent tax base erosion due to business-to-business transactions.
Impact on businesses
- Companies operating in Cameroon must now rely on accounting and tax providers based in CEMAC if they wish to deduct these costs.
- Companies using non-CEMAC companies for such services will face higher effective taxation, as these expenses will no longer reduce taxable profits.
- Non-compliant deductions identified during tax audits will be disallowed, which could result in additional tax liabilities and penalties.
This legislative change marks a significant break from the previous regime, which authorized limited deductibility (2.5% of taxable profit).
By completely excluding these expenses from tax-deductible costs – unless they originate from CEMAC – Cameroon is strengthening its commitment to regional economic self-sufficiency and the protection of tax revenues.
