The development of cross-border digital economies has fundamentally challenged traditional tax
nexus rules predicated upon the criteria of permanent establishment and physical corporate
presence. This paradigm, rendered obsolete by the digital transformation of the global economy,
has facilitated tax fraud and evasion phenomena, thereby compromising fiscal equity and
occasioning substantial revenue losses for States. In response to these challenges, the OECD,
through its BEPS initiative, especially the 2015 Final Report on Action 1 “Addressing the Tax
Challenges of the Digital Economy”, recognized the imperative to recalibrate fiscal regulations
applicable to the digital economy by contemplating diverse solutions, among which significant
economic presence emerged as a prominent mechanism. This criterion constitutes a tax
connection that represents a departure from traditional Corporate Income Tax (CIT) territoriality
principles, enabling States to tax a portion of the profits generated within their territory by large
digital enterprises, even in the absence of physical presence. Aligning with this international
framework, the Cameroonian tax legislature, through the 2026 Finance Law (FL 2026), adopted
this criterion and established a related specific tax regime. This was accomplished through the
rewriting of Article 5a of the General Tax Code (GTC) and the introduction of new Articles 5b,
7a, 17c and 23a. According to the FL 2026 explanatory memorandum, such innovation is
justified by the necessity to ensure fiscal parity between domestic and foreign operators while
embracing international best practices. It undoubtedly reflects the commitment to sustainably
adapt Cameroon’s tax system to contemporary economic realities. Such an approach begs the
question: how does the Cameroonian tax legislature conceptualize significant economic presence
as a tax nexus criterion for taxing digital activities (I), and how does it regulate its taxation (II)?
I. Identification of Significant Economic Presence as a Tax Nexus Criterion for Digital
Enterprises in Cameroon
the Cameroonian tax legislature equates significant economic presence to a digital permanent
establishment, whose characterization necessitates the satisfaction of certain criteria and the
provision of specific digital services. Regarding the criteria, Article 5 b (new) of FL 2026
stipulates that an enterprise is deemed to have a significant economic presence in Cameroon
when, despite lacking physical presence, it maintains a substantial and dematerialized connection
with national territory, characterized by the fulfilment, during a fiscal year, following one of the
two alternative criteria. The first one relates to the generation of gross turnover exceeding fifty
million (50,000,000) CFA francs from the provision of digital services to clients or users
established in Cameroon. The second criteria reveals that the number of users, clients, or account
holders located in Cameroon should exceed one thousand (1,000). Concerning the provision of
digital services, Paragraph 2 of Article 5 b (new) of GTC as introduced by FL 2026 enumerates,
in a non-exhaustive manner, the targeted services. These encompass the provision of on-demand
digital content such as streaming, downloads, online gaming, subscriptions; online advertising
services and monetization of client or user data; intermediation services for electronic
marketplaces; cloud computing services, data hosting, and Software as a Service (SaaS); as well
as any other service rendered or facilitated through electronic networks or digital applications.
The provision of any such service, coupled with the satisfaction of one of the aforementionedalternative thresholds, triggers the collection of tax in Cameroon according to the rule enshrined
in the FL 2026.
II. Specific Taxation Regime for Enterprises with Significant Economic Presence in
Cameroon
The tax regime applicable to digital enterprises with significant economic presence in Cameroon
is defined in the 2026 Finance Law by three key rules: specific assessment, filing modalities, and
penalties for noncompliance. Regarding tax assessment, the tax legislature provides two
options namely, the liberatory CIT and CIT at the standard rate. For option 1, the tax is
calculated at a rate of 3% of total gross revenue realized within Cameroonian territory and
constitutes a final and liberatory CIT in Cameroon serving as the minimum assessment. As for
the 2 nd option, CIT is calculated at the standard rate of 30% of actual net profit equal to 10% of
the gross revenue realized within Cameroonian territory. Regardless, the CIT due under this
option shall not be inferior to the aforementioned minimum assessment. Concerning filing
obligations, targeted enterprises shall file a registration application with the tax administration.
Furthermore, their CIT must be declared and paid via an electronic portal established by the tax
administration. Regarding penalties, non-compliance with the aforementioned filing obligations
primarily results in suspension of platform access from Cameroonian territory pursuant to the
provisions of Article 149 c of the GTC. Moreover, the offender is exposed to sanctions
prescribed in the Manual of Tax Procedures, generally encompassing fines, tax surcharges, and
late payment interest applicable to registration failures, late filing and payment, declaration
defaults, and tax payment omissions. It remains that an Order from the Minister of Finance will
establish implementation modalities for these requirements.
The recognition of significant economic presence as a tax nexus criterion for corporate income
tax assessment marks a major development in Cameroon’s fiscal system, responding to the
challenges of economic digitalization. The identification of this nexus relies on alternative
thresholds relating to annual turnover and the required number of users. Examination of the
specific taxation regime reveals the assessment rules, the filing obligations of liable entities, and
the corresponding sanctions for non‑compliance. Nevertheless, while this regime may serve as a
pertinent instrument for domestic revenue mobilization, its effectiveness ultimately depends on
further clarifications and guidance awaited from the Cameroonian authorities.
Author: Patricia Ngo Ntomb, Senior Tax & Legal Consultant; Supervisor: Albert Désiré
Zang, Managing Partner