Tax rates in Benin

Tax Rates

Consumption Taxes

Nature of the Tax

Value added Tax (VAT) - Taxe sur la valeur ajoutée (Local name)

Tax Rate

18% (standard rate)

Reduced Tax Rate

Certain activities are exempt, including banking and general insurance, imports of certain products, electric and hybrid motorcycles, books and newspapers, agricultural activities, gas for domestic consumption, works of art sold by the author, and externally financed government contracts (in some cases). An exemption from all customs duties, taxes, and VAT is available on health equipment, materials, and other health inputs used in the fight against the Covid-19 pandemic.
Exports of goods and services are zero-rated.

Other Consumption Taxes

Excise duties are levied on the following goods:

Cigarettes, cigars, cigarillos, smoking tobacco, and other tobacco substitutes: 50% (the specific tax amount applied to tobacco and cigarettes is allocated as follows: 80% for the public treasury,
20% for sports promotion).
Alcoholic beverages: beers and ciders: 20%; wines: 40%; liqueurs and champagnes: 45%.
Non-alcoholic beverages: energy drinks: 20%; non-alcoholic beverages, except for still water: 7%.
Imported mineral water: 20%.
Imported fruit juice: 20%.
Wheat flour: 1%.
Imported pasta: 5%.
Edible oils and fats: preparations for soup or broth: 10%; edible oils and other fats: 1%.
Coffee, tea: 10%.
Perfumery and cosmetic products: 15%.
Plastic bags: 5%.
Marble, gold bars, and gemstones: 10%.

Companies' vehicles are also subject to taxation (between XOF 150,000 and 200,000, according to the size of the engine). From 2022 an Urban Development Charge (RAU) and a Corridor Security Charge (RSC) are introduced on imports, as follows: RAU is levied at the rate of 0.5% ad valorem on all imported goods subject to a consumer regime (except basic necessities such as sugar, milk, pharmaceutical products, and agricultural inputs); RSC is levied at the rate of 0.5% ad valorem rate on all imported goods subject to a transit procedure (except for hydrocarbons destined for neighbouring countries and uranium from Niger).

Corporate Taxes

Company Tax: 30%
Tax Rate For Foreign Companies: Resident companies are subject to tax on Benin-source profits and foreign-source dividends, interest, royalties and capital gains, but not on foreign-source industrial and commercial profits. Non-resident companies are taxable only on Benin-source income and on the rental value of their Benin property.
Branches of foreign companies are taxed in the same way as domestic companies.
Capital Gains Taxation: Capital gains derived from the disposal of business assets are taxed at the ordinary company income tax rate unless a new investment is made within 3 years (under conditions). If the taxpayer ceases his activities or disposes of his business during the three-year period, the capital gains to be reinvested will be taxed immediately.
Capital gains of non-resident corporations are taxed at 30%.
Main Allowable Deductions and Tax Credits: Deductions normally are allowed for expenses incurred in generating income. Management fees may be deducted if they are reasonable for the services rendered.
Interest paid on loans is deductible if the rates charged correspond to those of the market. The total amount of net deductible interest due annually on all debts contracted by a company is limited to 30% of the result before tax, interest, depreciation and provisions. However, the part of interest that is not immediately deductible may be carried forward and deducted within the limit of five years.
The paid leave compensation, calculated in accordance with labour legislation, including the associated social and tax charges, is deductible. Additionally, the following expenses are also deductible if they meet the general conditions for deductibility of expenses: a) employee training expenses; b) sickness benefits; c) health insurance premiums paid by the company to an insurance company under a contract covering the entire staff or a specific employee.
Amounts paid to the head office and technical assistance costs are deductible, provided that the taxpayer can prove that they correspond to real operations and that they are at arm's length.
Losses can be carried forward for up to three years. The carryback of losses is not permitted.
Other Corporate Taxes: Other corporate taxes include a 4% payroll tax (Versement patronal sur les salaires - VPS); social security contributions equal to 15.4% of gross salary payable by the employer (6.4% pension and a 9% family allowance), plus 1% to 4% for industrial injury insurance (according to the level of risk); apprenticeship taxes; stamp duties; a duty of XOF 6,000 for capital increases; a tax of 8% on the transfer of land, buildings, and on the transfer of shares that results in the takeover of a company; a real property tax of 6% of the rental value for a developed property and 5% for an undeveloped property; a tax on a company's vehicles (between XOF 150,000 and 200,000, according to the size of the engine), an annual radio tax of XOF 1,000 and an annual television tax of XOF 3,000.
A tax for the development of sports is levied on big companies, with the taxable base represented by turnover (excluding taxes) at a rate of 1‰.
Contracts for insurance of assets in Benin are subject to insurance tax at rates from 0.25% (export credit) to 20% (fire).
Other Domestic Resources: Directorate-General for taxation; Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

	Benin	Sub-Saharan Africa	United States	Germany
Number of Payments of Taxes per Year	54.0	36.6	10.6	9.0
Time Taken For Administrative Formalities (Hours)	270.0	284.8	175.0	218.0
Total Share of Taxes (% of Profit)	48.9	47.3	36.6	48.8

Source: Doing Business, Latest available data.

Individual Taxes

Tax Rate

Individual income tax	Progressive annual rates range from 0% to 30%
Less than XOF 60,000	0%
Between XOF 60,001 and 150,000	10%
Between XOF 150,001 and 250,000 per year	15%
Between XOF 250,001 and 500,000 per year	19%
More than XOF 500,000 per year	30%

Allowable Deductions and Tax Credits: The taxable monthly salary includes the gross amounts of salaries, allowances, wages, bonuses, gratuities, overtime payments, professional benefits in cash or in kind, and all types of allowances, including transportation allowances. Sickness benefits paid to employees are also included in the taxable base.
The first XOF 60,000 of employment income are exempt from taxation. Deductions are available for dependent children, with the tax due being reduced as follows:

- 0% in case of one dependent child
- 5% in case of two dependent children
- 10% in case of three dependent children
- 15% in case of four dependent children
- 20% in case of five dependent children
- 23% in case of six or more dependent children.
Special Expatriate Tax Regime: An individual who has a tax domicile in Benin is normally subject to taxation on worldwide income, while individuals not domiciled in the country are taxed only on Benin-source income.
Domicile is based on habitual residence, which can be proved by a permanent home, principal place of residence or centre of economic interests.
Foreign-source income that already has been taxed may be exempt under an international tax treaty.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: Benin Tax Treaties
Withholding Taxes: Dividends: 15%/10% (regularly distributed amounts)/5% (regularly distributed amounts to non-residents)/7% (dividends distributed by a company whose shares are listed on an approved stock exchange in the WAEMU); Interest: 15%; Royalties: 10% (paid to a foreign individual)/12% (paid to a foreign company)

Sources of Fiscal Information

Tax Authorities: Overview of Benin's tax measures in response to Covid-19
Directorate-General for Taxation
Other Domestic Resources: Benin tax system information

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