| Benin Income Tax Rates Personal income tax rates of Benin in 2009 are progressively between 10% - 35%.
Monthly Taxable Income (XOF) / Tax Rate %
XOF 0 - 50,000 Exempt
XOF 50,001 - 130,000 10%
XOF 130,001 - 280,000 15%
XOF 280,001 - 530,000 20%
Above XOF 530,000 35%
An individual, either a resident of Benin or a foreign national, whose tax domicile is in Benin is subject to personal income tax in Benin (l'Impôt Progressif sur les Traitements et Salaires - IPTS) on their worldwide income. Foreign source income which already has been taxed outside Benin may be tax exempt if there is a tax treaty between the two countries. Individuals not domiciled in Benin are subject to income tax only on Benin source income.
In Benin, income is taxed under 5 schedules:
- Income from industrial and commercial profits
- Income from non-commercial profits
- Employment income
- Income from moveable capital (investments), and
- Rental income
Tax Deductions and Allowances: The first XOF 50,000 per month of employment income is exempt from tax. Tax also is reduced according to the number of dependant children.
Capital Gains Tax in Benin: Individuals are exempt from capital gains on the disposal of shares. In other respects, the rules governing capital gains derived by companies apply.
Capital Duty: A fixed rate of capital duty of XOF 6,000 applies on the formation of a company in Benin, or an increase in nominal capital.
Capital Acquisitions Tax: There is no capital acquisitions tax in Benin.
Social Security: The employee's contribution is 3.6% of gross salary.
Wealth Tax: There is no wealth tax in Benin.
Tax Year: Tax year in Benin is the calendar year.
Benin Corporate Tax RatesThe standard corporate income tax rate of Benin in 2009 is 30%.
Tax is 25% of taxable income for natural persons and legal persons engaged in an industrial activity.
The tax rate is between 35% - 45% for oil companies carrying out research, exploitation, production and sale of hydrocarbons.
Taxation of Dividends: Dividends are not included in taxable income when determining corporate income tax liability in Benin. An 18% withholding tax is levied on dividends, although a special 10% rate applies to income arising from shares quoted on a stock exchange in UEMOA (West African Economic and Monetary Union) and a 6% rate applies to income arising from bonds.
Capital Gains: Capital gains derived from the disposal of business assets are included in ordinary income and taxed at the company tax rate in Benin. The taxation of certain capital gains may be deferred if the taxpayer reinvests, subject to certain conditions before expiry of a 3-year period.
Minimum Tax in Benin: There is a minimum tax of 0.75% on prior year turnover, up to a maximum of XOF 200,000.
Foreign Tax Credit: There is no unilateral tax relief granted on taxable income from a foreign resource in Benin. Unilateral tax relief is available to individuals by way of an exemption of income on which tax has been paid.
Tax Incentives in Benin: New or expanding enterprises that contribute to the government's economic and social objectives in benin may be eligible for tax incentives during a setting up period of up to 30 months, and 5-9 years of business operations, depending on the location.
Enterprises investing at least XOF 500 million and creating at least 20 new jobs for nationals of Benin will be able to import production plant, machinery and spare parts duty free, export production free of export duties and be eligible for a tax exemption on industrial and commercial profits for an approved period.
Enterprises in Benin investing at least XOF 3 million may obtain guarantees of a stable tax basis. One-half of profits reinvested in approved projects may be deducted from taxable income.
New industrial enterprises of divisions of established corporations may be granted an income tax exemption for 5 years, up to a total value of exempt profits of 50% of the investment.
Enterprises licensed to operate in Industrial Free Zones in Benin may be granted a 10 year exemption from income tax on industrial and commercial profits, as well as other tax concessions.
Financial and banking institutions may obtain a license to operate in Industrial Free Zones in Benin.
Benin Withholding Tax
Dividends: Dividends paid to residents and nonresidents are subject to an 18% withholding tax, although a 10% tax rate applies to dividends quoted on a stock exchange in the UEMOA. This is a final tax.
Interest: Interest paid to residents and nonresidents is subject to a 15% final withholding tax.
Royalties: In Benin, a 15.2% withholding tax is imposed on royalty payments made to nonresidents.
Other Taxes on Corporations in Benin
Capital Duty: A fixed rate capital duty of XOF 6,000 applies on the formation of a company in Benin, or an increase in its nominal capital.
Payroll Tax: In Benin, a 4% payroll tax applies, based on a widely defined concept of emoluments.
Real Property Tax: An annual real property tax is levied in Benin on the owner of the property in main cities at a rate of 6% of the rental value for developed property, and 5% for undeveloped property. The real property tax is payable in advance, in equal instalments in January and March.
Social Security: The employer's contribution is 15.4% of gross salary (6.4% pension and 9% family allowance), plus 1%-4% as industrial injury insurance, depending on the degree of risk in the employment.
Transfer Tax: A transfer tax of 8% is levied on the transfer of land and buildings in Benin. The transfer of shares is subject to a fixed rate stamp duty.
Tax Year: Tax year in Benin is the calendar year.
Benin Value Added Tax RateThe standard rate of Value Added Tax (Taxe sur la Valeur Ajoutée - T.V.A.) of Benin is 18%.
Export of goods and services are zero-rated. Certain activities are VAT exempt. Those are: imports of certain products, banking and general insurance. Externally financed government contracts are also exempt under certain conditions.
| 
