Cameroon

Transfer Pricing legislation was already introduced in Cameroon according to the Finance Law of January 1, 2012. It was updated through Law No. 2014/026 of December 2014, which sets out the documentation and filing requirements to prove compliance with the Arm’s Length Principle.

In 2020, it decided to extend the time limit for Transfer Pricing controls from 9 to 12 months according to international Transfer Pricing standards.

Arm’s Length Principle

The General Tax Code (GTC) of 2017 in Section 19 contains the application of the Arm’s Length Principle between related parties. Based on the provisions of Section 19, related companies must document the Arm’s Length price, the method employed to determine the Arm’s Length price, and all the supporting evidence for the controlled transactions.

Related Parties

The Finance Act 2020 (Act No.2019/023) also addressed the definition of related parties. It stipulates that a relationship of dependence or control is established between two companies:

– If one owns or controls 25% of the share capital of the other, directly or through a proxy, or if one has actual decision-making powers over the other.

– If both companies are under the control of the same company or person subject to the aforementioned conditions.

Transfer Pricing Methods

There is no specific Transfer Pricing method provided by Cameroonian law. Conversely, the country’s Tax Administration focuses on the Transactional Net Margin Method (TNMM), as well as the Comparable Uncontrolled Price, Resale Price, and Cost-Plus methods.

Transfer Pricing Documentation

The Transfer Pricing documentation requirements are set forth in Section M 19-a of the Tax Procedures Manual. Documents must be filed in the Large Taxpayers Office in editable e-format and physical format.

Penalties

Failure to file within the deadline after a formal reminder, or filing false or incomplete information, will result in penalties of up to FCFA 50 million (approximately US$ 100,000).

Source: Directorate General of Taxation

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