The following expense types are not deductible or have limited deductibility for Cameroon tax purposes:

Head office overhead expenses pertaining to the Cameroon business and payments in remuneration for services (including research, technical, financial and accounting assistance) provided to Cameroonian firms by non-resident natural persons or legal entities are deductible up to a maximum of 2.5% of the payer’s taxable profits before deducting such expenses. In case of loss years, the 2.5% taxable profits cap is computed by reference to the most recent profitable year not yet barred by the statute of limitations. The deduction cap is fixed at 1% of turnover for public works businesses and 5% of turnover for engineering-consultancy firms. Effective 1 January 2024, it is also fixed at 1% of turnover for newly-formed companies that are in a loss position and for companies in a continuous loss situation. If there is no turnover in case of new companies or loss-making companies, the deduction cap is 1% of annual expenses instead of turnover. Finally, where the payments are made to a non-CEMAC related party, the non-deductible portion is classified as a constructive distribution and is subject to withholding tax unless a tax treaty provides otherwise;
Royalties for the use or the right to use patents, trademarks, drawings and models paid to a non-CEMAC related party who directly or indirectly holds an interest in or controls the Cameroonian payer are deductible up to an overall limit of 2.5% of the taxable income of the payer before the deduction of the royalty expense;. Where the payments are made to a non-CEMAC related party, the non-deductible portion is classified as a constructive distribution and is subject to withholding tax unless a tax treaty provides otherwise;
Rent paid for movable equipment to a shareholder that manages the company or holds directly or indirectly more than 10% of the capital of the company is not deductible;
Interest paid in excess of the rate of the Bank of Central African States (BEAC) plus 2 percentage points is not deductible for tax purposes (see other limitations to the tax deduction of the interest expense in Sec. 13.2.);
Commissions and brokerage service fees paid in relation to the acquisition of goods abroad are deductible up to a maximum of 5% of the value of the relevant import. Moreover, the payment must be properly invoiced and supported by the goods acquisition invoice. Where the payment is made to a non-CEMAC related party, the non-deductible portion is classified as a constructive distribution and is subject to withholding tax unless a tax treaty provides otherwise;;
Payments to residents of tax havens are not deductible, except, effective 1 January 2018, payments relating to the purchase of goods produced in a tax haven (see Sec. 13.5.);
Amounts set aside for self-insurance are not deductible;
Donations exceeding 0.5% of the turnover to the institutions located in Cameroon engaged in research and development, philanthropic, educational, sports activities etc.;
Gifts and subsidies exceeding 5% of the turnover of the clubs participating in official national competitions and the bodies in charge of such competitions are not deductible;
Bad debts are not deductible unless the debtor has extinguished all recovery avenues provided for under the guidelines of the OHADA Uniform Act relating to the organization of simplified procedures for collection and enforcement. However, effective 1 January 2022, the obligation to justify the exhaustion of the means of recovery does not apply for smaller debts not exceeding XAF 500,000 that have been provisioned over a minimum period of 5 years;
Effective 1 January 2021, losses due to damages and breakages incurred by companies in the brewing sector in excess of 1% (increased from 0.5% effective 1 January 2023) of the total production volume are not deductible;
Penalties or fines are not deductible;
Expenses paid in cash in excess of XAF 100,000 (reduced from XAF 500,000 effective 1 January 2024) are not deductible;
Effective 1 January 2024, expenses which are not justified by invoices issued through the tax authorities’ electronic invoicing monitoring system are not deductible. Likewise, the deduction of expenses (other than those due to non-resident persons) is denied if the invoice does not include the tax identification number of the recipient;
Effective 1 January 2024, expenses in relation to all types of remunerations paid to persons who, on the date of payment, are not on the tax authorities’ list of active taxpayers are not deductible.

As from 2017, damages to inventory and business assets are deductible only if supported by an expert’s report and actually inspected by a tax administration official of a certain rank. Further, effective 1 January 2024, such losses must not be the result of negligence or manifest recklessness on part of the taxpayer.

Effective from 1 January 2022, gifts and donations made by companies as part of the construction and development plan for economically stricken regions are fully deductible without any cap.

Note that excessive payments to non-residents, including royalties, service fees, or head office expenses, the deduction of which are disallowed for corporate tax purposes, are reclassified as constructive profit distribution and subject to withholding tax at the rate applicable to dividends and similar distributions.

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