Transfer pricing - Cameroon

• Article 18 (b) of the General Tax Code: Companies under the entity in charge of the management of large companies that are controlled by or that control other companies are required to file an annual transfer pricing report electronically.
• The transfer pricing declaration is required before the filing of the annual tax return as provided for in Article 18 of the Finance Law for 2025.
• By the provisions of Article M19 (a), the General Tax Code specifies that for 
  the purposes of establishing corporate income tax payable by companies that are controlled by or control an enterprise established outside Cameroon, profits transferred indirectly to the latter by increasing or reducing the purchase or sale price, or by any other means, must be incorporated in the results appearing in their accounts. The same applies to companies that are controlled by an enterprise or group that also controls enterprises established outside Cameroon. In order for this criterion to be met, the taxpayer must:
  • Have an annual turnover greater than or equal to 1 billion CFA francs;
  • At the end of this exercise, hold more than 25% of the share capital or voting rights of a company established in Cameroon or outside Cameroon with an annual turnover of 1 billion CFA francs or more.
• Article 19 of the 2017 General Tax Code (CGI) contains the application of the arm's length principle between related parties. Under the provisions of section 19, related companies must document the arm's length price, the methodology used to determine the arm's length price, and any evidence or status in support of the controlled transactions.

• Cameroon's transfer pricing (TP) regulations, which are stipulated in Article 
  18 of the General Tax Code of 2024, are in line with the OECD (Organisation 
  for Economic Co-operation and Development) transfer pricing guides for 
  multinationals.
• In accordance with Article 18 of the 2024 General Tax Code, the OECD 
  country-by-country report is an obligation imposed on certain companies 
  established in Cameroon under well-defined conditions. The 2025 Finance 
  Law specifies in paragraphs 6 and 8 that the content, as well as the list of 
  States that have concluded an agreement with Cameroon authorizing the 
  automatic exchange of country-by-country reports, will be established by an order of the Minister of Finance.
• Action 13 of the OECD Action Plan completes Cameroon's legal framework for transfer pricing documentation, which has so far been incomplete due to its non-existence. The OECD's contribution on transfer pricing policy is intended to be an instrument to combat fraudulent profit shifting within multinational groups.
• Article 18 provides that, a Cameroonian company owned directly or indirectly by a foreign company is subject to country-by-country reporting when the company that owns it meets one of the three non-cumulative conditions provided for by law. Primarily, the foreign company in question must be established in a country that does not require the filing of this declaration, but which would be required to do so if it were located in Cameroon.
• In addition, it must be established in a country that is not on the list of States with the automatic exchange of country-by-country reports with Cameroon but which has concluded an agreement on the exchange of tax information. Finally, when established in the State on the list of States that have concluded an automatic exchange of country-by-country reports agreement with Cameroon, the Cameroonian administration must have been informed of a systemic failure in its State of tax residence. This omission must have prevented the automatic exchange of country-by-country reports. Companies subject to this reporting obligation must do so within 12 months of the end of the financial year and electronically, using a format established by the tax authorities. Failure to file or the filing of an incomplete or inaccurate declaration is subject to the penalties provided for in Articles 18 and L 104 of the Manual of Tax Procedures, including a fixed fine of 50 million (50,000,000 XAF). 

The fact remains that, some companies, although established in Cameroon, are exempted from this country-by-country reporting obligation.

• Cameroon's transfer pricing legislation requires taxpayers to self-assess and be able to demonstrate the arm's length principle applied in intra-group transactions.

• Pursuant to Article 18 of the General Tax Code, the presentation of transfer pricing documentation is required prior to the filing of annual tax returns.
• TP documentation must be available at the start of a tax audit and provided to the tax authorities upon request. The declaration must be submitted in accordance with the standards of the administration and must include:
  • a declaration of their shareholdings in other Cameroonian or foreign 
    companies;
  • an overview of the activities carried out, including changes during the 
    financial year;
  • Overview and definition of the group's transfer pricing policy;
  • List of the intangible assets held by the group used by the reporting body and the legal name of the entity that owns the assets and its tax domicile.
• Specific information on the reporting company must also be provided, such as:
  • a summary of the activities carried out during the financial period, including adjustments made during that period;
  • a brief statement of related party transactions, which should include the characteristics and amount of the transactions;
  • the state or territory of residence and the legal name of the associated enterprises involved in the transactions, as well as the beneficial owners of the related transactions for tax purposes;
  • the transfer pricing method used and the changes that occurred during the financial year;
  • a summary of transactions with associates that did not involve a monetary contribution.

• Under Article 18 of Cameroon's General Tax Code, taxpayers are required to submit their transfer pricing statement when filing the financial statements, including March 15 for taxpayers who are large companies.

• Transactions with related parties that operate in low-tax jurisdictions (tax havens).
• Persistent losses in an entity may be the reason for a full tax audit with a potential risk of significant tax adjustment.
• Tax deductions for intra-group head office fees and interest rates on intra-group loans are capped by tax regulations.

• In the event of no response to the formal notice from the tax authorities, the taxpayer is required to pay a fine of 5% of the amount of the transaction for each financial year audited (Article 19(4) of the General Tax Code).
• When a taxpayer does not file the annual transfer pricing declaration within the prescribed period or when an incomplete or non-compliant declaration is made, the amount of the fine may not be less than 50 million CFA francs (Article 19(4) of the General Tax Code).

• Currently, in Cameroon, there is no prior agreement on transfer pricing. However, a taxpayer, prior to carrying out a transaction by means of a contract, may seek the opinion of the tax authorities on the tax regime applicable to him. The Tax Administration's position on the transaction guarantees the taxpayer against any subsequent modification or interpretation of the tax law.
• In addition, companies that are directly or indirectly dependent on or control other companies located outside Cameroon within the meaning of the provisions of Article 19 bis of the General Tax Code may request the tax authorities to conclude a prior agreement on the transfer pricing method for a period not exceeding four (04) financial years.

• There are generally no exceptions to advance pricing agreements from a transfer pricing perspective.

• There are no specific transfer pricing provisions in relation to Covid-19.