Section 10 General Tax Code: Taxation of Capital Gains on Business Transfers

What happens to your taxes when you sell, transfer, or terminate your business activities in Cameroon? Section 10 of the General Tax Code answers this, providing a framework for taxing capital gains from such transactions. Here’s what you need to know.

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Taxation of Capital Gains

Capital gains refer to profits obtained from the sale or transfer of fixed assets, goodwill, or clientele as part of a business transaction. In Cameroon, these gains are taxed based on when the business was created or purchased:

1. Cessation or Transfer Within 5 Years
   If the transfer or termination occurs less than five years after the creation or purchase of the business, 50% of the capital gains are taxable.
2. Cessation or Transfer After 5 Years
   For businesses that cease or transfer after five years, only a third of the capital gains are taxable.

This approach encourages long-term investment while ensuring fair tax treatment for those exiting their businesses.

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Net Capital Gains and Realized Losses

Before taxation, net capital gains are calculated by deducting any realized losses from the transaction. This means you only pay taxes on the actual profits, ensuring a fair and balanced tax obligation.

For an in-depth understanding of taxable profits and how they are determined, refer to Section 6 of the General Tax Code.

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When Does This Apply?

Section 10 applies to total or partial sales, transfers, or the cessation of business activities. Whether you’re selling a fixed asset, transferring a client portfolio, or closing your practice, these rules guide the taxation process.

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Simplify Tax Compliance

Navigating taxes on capital gains can be complex, but you don’t have to go it alone. At OpenHub Consulting, we offer expert tax management and business consulting services to ensure compliance while minimizing your tax burden.

Looking for tools to streamline your accounting and tax processes? Discover Kola Business Manager for easy invoicing, tax management, and record-keeping.

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Ready to learn more?
Get your copy of the 2024 General Tax Code and 2025 Finance Law by clicking here.