(Business in Cameroon) - In the 2020 Finance Law, Cameroon has decided to strengthen its international tax fraud and evasion combating system.
To this end, the country has specifically strengthened the mechanism for combating illicit profit transfers by reformulating the declaratory obligation for transfer pricing; clarifying the arm's length principle as a reference in the fight against profit transfers, and aligning the transfer pricing documentation obligation with international standards.
Nevertheless, Cameroon has decided to extend the time limit for transfer pricing controls from 9 to 12 months in accordance with international transfer pricing standards. In addition, the country has moved to abolish the requirement of proof of a presumption of transfer of profits as a triggering event for the transfer pricing documentation requirement in the event of a tax audit.
This change in Cameroonian legislation to combat international tax evasion follows Cameroon's accession, in 2017, of the Organisation for Economic Co-operation and Development (OECD) Convention on Mutual Administrative Assistance in Tax Matters.
This convention enables Cameroon to improve its tax information gathering capacities, especially with regard to Cameroonian subsidiaries of multinationals whose parent companies are, for the most part, located in tax jurisdictions already party to the convention.