New Caledonia

Corporate - Deductions

Last reviewed - 16 April 2024

Depreciation and amortisation

Depreciation is allowed as a deductible expense from taxable profits when it meets the following conditions:

  • It must be carried out on fixed assets belonging to the operator and actually subject to depreciation.
  • The annuity must correspond to the depreciation suffered. It can be calculated either according to the straight-line system or, for certain equipment assets, according to the declining-balance system.
  • The depreciation must have actually been carried out in accounting.
  • Depreciation must appear on a special statement (relevé special).

Depreciation ceases to be tax deductible when it has reached, in total, the amount of the cost price. The cost price to be used generally means the actual acquisition price that the item involved for the company, as it results in principle from the accounting.

In the straight-line system, the annual depreciation to be deducted from the results of each fiscal year is calculated by applying to the cost price the rate corresponding to the normal duration of use of the element.

Equipment goods whose normal useful life is at least three years and industrial or agricultural buildings whose normal useful life does not exceed 15 years can be depreciated using the declining-balance method.

The coefficient applicable to the linear depreciation rate is, for each fixed asset, set at:

  • 1.5 when useful life is 3 years or 4 years.
  • 2 when useful life is 5 or 6 years.
  • 2.5 when useful life is greater than 6 years.

Start-up expenses

The New Caledonian law provides specific rules for certain new companies, particularly when they set up in a free zone or when they can be qualified as young innovative companies (jeunes entreprises innovantes).

Interest expenses

Interest paid to shareholders for the sums they leave or make available to the company, in addition to their share of the capital, whatever the form of the company, is deductible within the higher of the following two rates:

  • Legal interest rate in force over the period for which the interest is due.
  • Legal interest rate in force over the period for which the interest is due, increased by three percentage points, the rate thus determined not being able to exceed 5%.

The legal interest rate is the rate determined by Article L. 313-2 of the French Monetary and Financial Code.

This deduction is subject to the condition that the capital has been fully paid up.

Charitable contributions

As a general principle, charitable donations are not tax deductible for CIT purposes. However, they may entitle one to an incentive (see the Tax credits and incentives section for more information regarding the charitable donations tax reduction).

Payments to directors 

The fixed allowances that a company grants to its directors or executives of its company for representation and travel expenses are not deductible from tax results when these expenses already include the usual expenses of this nature reimbursed to the interested parties. Moreover, expenses that are excessive and not incurred for business purposes, including direct or indirect remuneration, paid to directors or persons with the highest remuneration in the company are not deductible from the taxable result.

Research and development (R&D) expenses

See Tax credit for research and development (R&D) in the Tax credits and incentives section.

Fines and penalties

As a general principle, fines and penalties are not tax deductible for CIT purposes.


The TSS and the CAIS are not tax deductible for CIT purposes.

Other significant items

Overhead costs of any kind are generally tax deductible for CIT purposes. However, companies having their head office or effective management outside New Caledonia may deduct from the amount of their taxable profit the share of general expenses incurred at the place of the head office or management relating to activities carried out in New Caledonia, within the limit of 5% of the amount of external services required by said activities. This deduction is subject to the following cumulative conditions:

  • The costs allocated to activities carried out in New Caledonia were incurred in the direct interest of companies in New Caledonia.
  • Companies attach to their CIT return a statement of overheads (relevé des frais généraux) incurred and a statement of determination of the deductible amount of overheads in accordance with models established by the administration.

When these conditions are not met, the share of the costs deducted is reinstated in taxable income without a rectification proposal.

At the first request from the administration, a justification of the interest of the costs for the business operated in New Caledonia is produced within three months.

Royalties that mining companies pay to shareholders who have, directly or indirectly, a majority stake in the company's capital are not deductible for the purposes of CIT.

Net operating losses

Carryforward of tax losses

Tax losses can be offset against long-term capital gain of the fiscal year.

Tax losses carried forward are available to offset the entire taxable profits of the following fiscal years and can be carried forward indefinitely.

Carryback of tax losses

As a general principle, carryback of tax losses is not allowed, except for metallurgical and mining companies.

Payments to foreign entities

Interest, arrears, and other income from obligations, debts, deposits and guarantees, royalties from the transfer or grant of operating licences, patents of invention, trademarks, manufacturing processes or formulae and other similar rights or remuneration for services, paid or due by a natural or legal person domiciled or established in New Caledonia to natural or legal persons who are domiciled or established outside New Caledonia and are subject to a privileged tax regime are permitted as deductible expenses for the establishment of the tax only if the debtor provides evidence that the expenses correspond to real operations and that they are not abnormal or exaggerated. Persons are considered to be subject to a privileged tax regime in the state or territory considered if they are not taxable there or if they are subject to taxes or if the tax due is less than half of the tax that they would have been liable in New Caledonia.