Company Taxation in Cameroon: Determining Taxable Profits and Operating Criteria

Section 5 (a) of the General Tax Code in Cameroon outlines the criteria for determining taxable profits (profits that are liable to company tax). According to this section, profits subject to taxation are those earned by businesses carried on or transactions effected within Cameroon. However, this is subject to the provisions of international conventions.

To determine if a business is operating in Cameroon, the law provides several criteria:

1. Undertakings headquartered in Cameroon or with an effective management office in Cameroon: If a business has its headquarters or an effective management office in Cameroon, it is deemed to be operating in the country for tax purposes.
2. Those with a permanent establishment in Cameroon: If a business has a permanent establishment, such as a branch, office, or factory, in Cameroon, it is considered to be operating in the country and is subject to taxation on its profits.
3. Undertakings with a dependent representative in Cameroon: If a business has a dependent representative, such as an agent or employee, who has the authority to conclude contracts on behalf of the company in Cameroon, the business is deemed to be operating in the country for tax purposes.

In cases where a business does not meet the criteria mentioned above, its profits may still be taxable in Cameroon if it carries out activities that form a full business cycle within the country.

This provision ensures that businesses that conduct substantial operations in Cameroon, even without meeting the previous criteria, are subject to taxation on their profits.

It is important to note that the provisions of international conventions may also impact the taxation of profits earned by businesses operating in Cameroon.

International conventions, such as double tax treaties, may contain provisions that allocate taxing rights between countries and specify the conditions under which profits are subject to taxation.

The tax law in Cameroon determines that profits liable to company tax are those earned by businesses carried on or transactions effected in Cameroon.

The law provides criteria, such as having a headquarters, permanent establishment, or dependent representative in Cameroon, to determine if a business is operating in the country.

Additionally, profits may also be taxable if a business carries out activities that form a full business cycle in Cameroon. International conventions may also impact the taxation of profits, subject to the provisions outlined in those agreements.

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