CAMEROON LAW AND PRACTICE Contributed by: Serges Martin Zangue, Brandon Ntahdui, Joel Noussie, Julienne Happi, Mathias Choudjem, Maeva Pokem, Winy Felifack and Synthia Pamela Dounking Amfouo, Zangue & Partners
9.2 Withholding Taxes on Dividends, Interest, Etc Withholding Tax on Dividends or Interest Payments to Foreign Investors In Cameroon, dividends or interest paid to foreign companies are subject to a withholding tax known as the income tax on movable capital ( impôt sur le revenu des capitaux mobiliers IRCM). Applicable Rates of Withholding Tax on Dividends or Interest Payments to Foreign Investors The main rate of withholding tax on dividends or inter - est is 16.5% of the income paid. However, the rate is 30% when the dividends or interest are paid to a person domiciled in a country considered a tax haven, and 10% for dividends distributed by companies with turnover below or equal to XAF3 billion. These rates may be different for companies whose countries have signed tax treaties with Cameroon. The tax rate on dividends and interest on bonds matur - ing in less than five years, as well as other remunera - tion from securities held by individuals or legal entities listed on the BVMAC, is set at 10%. This rate is set at 5% for proceeds from bonds issued by private or public companies maturing in five years or more. The Cameroon General Tax Code also provides for exemptions and reduced rates (depending of the phases of the start-up) for dividends paid to share - holders and interest paid to investors of innovative start-ups in the field of information and communica - tion technologies, grouped within management struc - tures set up as approved management centres. Other Reductions and Exemptions Under a Treaty or Legal Instrument The reduction in the rate of this tax does not, in prin - ciple, depend on the length of time shares are held. Furthermore, depending on the applicable tax trea - ties, the tax could be revised downwards. In addi - tion, Order No 2025/002 of 18 July 2025 establishing incentives for private investment in the Republic of Cameroon, which abrogates all previous and contrary provisions (in particular that of Law No 2013/004 of 18 April 2013 as amended by Law No 2017/015 of 12 July 2017), provides for a reduction in the rate of
the IRCM for companies approved for the incentive system provided by said law. Treaty Shopping In Cameroon, there are no formal restrictions on treaty shopping. However, before granting a taxpayer the benefit of provisions of an international tax treaty, the tax authorities carry out verifications of the applica - bility of the treaty concerned to ensure that no tax evasion is involved. 9.3 Tax Mitigation Strategies Taxpayers use a variety of methods to reduce their tax base and pay less tax. However, these methods must be legal and comply with current legislation. There are precautions to be taken and specific rules governing their application to avoid abuses such as tax evasion or tax fraud. Tax authorities in Cameroon closely con - trol companies’ tax practices and can apply penalties to those who fail to comply with the law. General Overview of Tax Optimisation Methods in Cameroon There are a number of tax optimisation measures that enable taxpayers to pay the least amount of tax. Tax - payers must ensure that these measures are regular in order to avoid possible sanctions. These measures may include: • use of the tax incentives provided for by invest - ment incentives laws; • tax benefits provided for in the General Tax Code; • use of tax treaties; • carrying out an activity under the free zone regime; and • efficient structuring and management of a com - pany. Increasing the base of depreciable assets is permitted in Cameroon as long as the acquisition of the assets complies with accounting and tax standards. In reality, this involves revaluation. It is free for some taxpayers and compulsory for others, depending on their tax system, the nature of their business or their turnover. Other Tax Optimisation Measures Step-up depreciable asset basis
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