Mergers, splits, and asset contributions are significant corporate activities. Section 9 of the General Tax Code provides tax relief for capital gains arising during these processes, fostering business continuity and regional integration within the CEMAC zone.
Tax-Free Capital Gains
Under Section 9, capital gains resulting from the gratuitous allocation of shares, founders’ shares, partnership shares, or debentures during mergers, splits, or partial contributions of assets are exempt from company profit tax.
To qualify for this exemption, the following conditions must be met:
- Registered Office Requirement: The new or taking-over company must have its registered office in Cameroon or another CEMAC member country.
- Simultaneous Contributions: Contributions to assignee companies must take effect on the same date, ensuring the immediate dissolution of the assignor company in the case of a merger or split.
These measures ensure that businesses in the region can restructure without incurring undue tax burdens.
Depreciation and Capital Gains Obligations
While the exemption is beneficial, companies must fulfill specific obligations:
- Depreciation for non-merchandise assets included in the contribution must be calculated annually, based on their original cost.
- Previous depreciation must be accounted for, ensuring an accurate calculation of subsequent capital gains.
These provisions promote accurate reporting and compliance with Cameroon’s tax laws, safeguarding the integrity of financial transactions.
Updates from the 2025 Finance Law
The 2025 Finance Law introduces additional measures to streamline corporate transactions:
- Enhanced Documentation: Companies involved in mergers, splits, or asset contributions must provide detailed documentation for tax audits.
- Strengthened Regional Focus: By emphasizing CEMAC-wide applicability, the law fosters economic integration and consistency in tax regulations.
These updates ensure transparency and fairness in corporate taxation.
How Can Businesses Benefit?
Planning a merger, split, or asset contribution? Leverage the tax exemptions in Section 9 while ensuring compliance with depreciation and reporting requirements. At OpenHub Consulting, we specialize in corporate restructuring and tax management, providing tailored solutions for your business needs.
Looking for tools to simplify tax compliance? Check out Kola Business Manager—a robust solution for invoicing and tax management tailored to businesses in Cameroon.
Ready to learn more?
Get your copy of the 2024 General Tax Code and 2025 Finance Law by clicking here.
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