New Rules for Tax Deductible Expenses in Cameroon (2026 Guide)

New Rules for Tax Deductible Expenses in Cameroon – 2026 Finance Law in Cameroon

Every business owner knows the golden rule of accounting: profit is not just what you earn; it is what you keep. In our fiscal environment, the line between “accounting profit” and “taxable profit” is often where the battle is won or lost. You might think you have generated a healthy margin, but if the administration disallows your charges, you could end up paying tax on money you have already spent.

The regulatory landscape is shifting. The government is strictly refining what counts as tax deductible expenses in Cameroon. The new regulations found in Section 7 of the 2026 Finance Law introduce strict limits on rental payments, simplify the treatment of bad debts, and impose a flat-rate tax on digital giants.

This article breaks down these changes to help you protect your bottom line and ensure your books remain “clean” for the 2026 fiscal year.

A Major Win: Simplified Deduction for Small Bad Debts

For years, managing unpaid invoices was a nightmare for Cameroonian businesses. We have all been there: a client owes you money, they disappear, and you are left with a loss.

Previously, the General Tax Code was rigid. To claim these losses as tax deductible expenses in Cameroon, you had to prove you had exhausted all legal means of recovery. This meant hiring lawyers and bailiffs to chase small amounts, often costing more than the debt itself. Consequently, many businesses kept “zombie debts” on their balance sheets for years, afraid to write them off.

The New 500,000 CFAF Threshold

The 2026 Finance Law introduces a pragmatic change in Section 7C. It states that losses due to bad debts of less than 500,000 CFAF can now be deducted automatically.

You no longer need to produce a pile of court documents or legal fees. The conditions are simple:

1. The debt must be less than 500,000 CFAF.
2. It must have been fully provisioned in your accounts for a minimum period of 5 years.

For credit institutions (banks and microfinance), this threshold is raised to 3,000,000 CFAF. This update allows you to clean up your balance sheet penalty-free. If you have old, small receivables sitting in your books since 2020, you now have a clear path to expense them.

The “Related Party” Trap: New Limits on Rental Expenses

While the law offers relief on debts, it tightens the screws on rental costs. This change specifically targets a common structure in Cameroonian family businesses where an owner rents their personal property to their own company.

In principle, this is legal. However, the administration has noticed that some entrepreneurs use this to shift profits, charging inflated rent to reduce the company’s taxable income. To curb this, the new law redefines how these costs are treated as tax deductible expenses in Cameroon.

The 25% Cap on Deductibility

Under the new Section 7A, if a partner (shareholder) holds at least 25% of the company’s shares, the rent paid to them is only deductible within the limit of 25% of the taxable profit.

This is a critical calculation. If your company makes zero profit, you cannot deduct any rent paid to a major shareholder. The expense becomes “non-deductible,” and the company must pay Corporate Income Tax on that amount. Furthermore, this rule extends to the shareholder’s spouse and direct relatives. You cannot bypass the rule by listing the property in a family member’s name.

Depreciation: Aligning Tax with Finance

Another subtle but vital shift concerns depreciation. Previously, there was often a disconnect between the financing duration of an asset and its tax amortization schedule.

Section 7D mandates alignment. For assets acquired under a “liability contract” (such as leasing), the tax depreciation period must now match the duration of the financing contract. This move prioritizes “substance over form.” You can no longer claim tax deductible expenses in Cameroon over 5 years if your lease contract says the asset is paid off in 3. This simplifies the math but removes a lever for deferring taxes.

The Special Provision: A 10% Flat Tax on Digital Income

Finally, the law addresses the difficulty of taxing foreign digital companies (like streaming services or software vendors) that lack local accounting records.

Since these entities cannot easily prove their local expenses, the law moves to a “Lump-Sum” assessment. The Special Provision states that the taxable profit of non-resident enterprises with a significant digital presence is fixed at 10% of their gross income in Cameroon.

While this doesn’t directly affect your local deductions, it affects your costs. Because this is effectively a tax on turnover, foreign software providers will likely pass this cost on to you. You should anticipate a rise in the price of your digital tools, which will, in turn, increase your own operating expenses.

Read Also: 2026 Tax Filing Deadlines in Cameroon: New Reporting Standards

How to Optimize Your Strategy for 2026

The 2026 Finance Law is not trying to destroy businesses; it is pushing for transparency. It rewards those who keep accurate records and punishes those who rely on outdated loopholes.

To maximize your tax deductible expenses in Cameroon this year, we recommend three steps:

1. Audit Your Receivables: Identify all debts under 500,000 CFAF older than 5 years and prepare to write them off.
2. Review Related-Party Leases: If you rent property to your own company, calculate if the rent exceeds 25% of your projected profit. You may need to restructure the lease.
3. Update Asset Registers: Ensure your depreciation schedules match your leasing contracts to avoid penalties during an audit.

At OpenHub, we specialize in translating these complex rules into safe business strategies. Through OpenHub Consulting, we can perform a “Fiscal Health Check” on your books before the year ends. Alternatively, if you want to empower your internal team, the OpenHub Academy offers targeted training on these new fiscal realities.

Don’t wait for the tax inspector to explain these rules to you. Clarity is your best defense.