Living in Benin: dividends at 5 % or 10 % (2022 edition code), 12 % tax on rents, 1975 convention

This page reports information published by the Ministry of Economy and Finance of Benin, the #AskGouvBenin portal, the BOFiP (Official Bulletin of Public Finances), and impots.gouv.fr. The General Tax Code, established by Law No. 2021-15 of December 23, 2021, replaced the 1964 law and the 1966 ordinance. In the English translation of the 2022 edition of the code, dividends are subject to a withholding tax of 5 % for non-resident shareholders and 10 % in other cases, while income from receivables and deposits is subject to 15 %. The Ministry indicates a single rate of 12 % for property income tax since 2022.

The tax residence of natural persons and the tax scale for salaries and wages are not detailed here.

The General Tax Code resulting from the 2021 law

The Ministry of Economy and Finance presents the new code as a single document, adopted by the deputies on December 8, 2021, which notably replaces Law No. 64-35 of December 31, 1964 and Ordinance No. 2-PR/MFAE of January 10, 1966 and integrates for the first time the Book of Tax Procedures.

The 2023 edition published by the Ministry (Law No. 2021-15, updating the 2023 Finance Law, Law No. 2022-33 of December 9, 2022) includes in Book 1 a chapter on property income tax (IRF), one on capital gains tax on real estate (TPVI), and one on income tax on salaries and wages (ITS). Registration fees and stamp duties are covered in Book 3. The definitions of tax residence for individuals and the ITS tax scale are not detailed here.

Income from movable capital: dividends, bonds, receivables

In the English translation of the 2022 edition of the code, Article 81 makes tax due when income is paid by a business carried on in Benin, or received by a business carried on in Benin or by a person domiciled there. Articles 86 to 88 set the following rates.

For a resident of a country bound to Benin by a treaty, Article 89 applies the treaty rate if it is lower than the 15% rate of Article 88, upon proof by the beneficiary of their status as beneficial owner. The translation specifies that the French version of the code prevails. These rates are those of the 2022 edition; any potential modifications by subsequent finance laws are not detailed here.

Property income: a single rate of 12 %

On January 5, 2022, the Ministry of Economy and Finance published a webpage on the single tax rate of 12 % for property income, introduced by the new tax code. This rate replaces the previous rates of 10 % and 20 %, which, according to the webpage, were in effect until the end of 2021. The webpage makes no mention of any tax allowances or finance law.

In a government Q&A session (#AskGouvBenin No. 21, undated page mentioning January 2022), the Director General of Taxes stated that capital gains on real estate sales are subject to a levy of 5 % and that Benin does not have a housing tax. These statements are not taken from the text of the tax code and may have been amended since then.

Activity carried out on a personal basis: business profits tax

In the 2023 edition, Article 54 subjects individuals who habitually carry on a gainful activity for their own account to the Business Profits Tax (IBA). Article 55 specifically targets industrial, commercial, and artisanal profits, those of the liberal professions, and income from intellectual or industrial property rights. Article 59 only considers profits earned in the Republic of Benin, as well as those that the applicable international convention allows to be taxed in Benin. Article 63 sets the standard rate at 30%, with 25% for private educational institutions.

Article 64 provides for a minimum collection of 1.5 % of cashable products, without the tax being able to be less than 500,000 FCFA.

Coordination with the Franco-Beninese convention

The convention was signed in Cotonou on February 27, 1975, when the country was called the Republic of Dahomey, and entered into force on November 8, 1977, according to the BOFiP (Official Bulletin of Public Finances). It covers income tax, inheritance tax, registration fees, and stamp duties. The text published by impots.gouv.fr notably includes the following provisions:

Details can be found on our page dedicated to the convention.

What this page does not cover

It does not detail the tax residency of individuals under Beninese law, nor the tax scale for salaries and wages, nor the text of the tax on capital gains from real estate, nor domestic registration and inheritance taxes, nor the conditions for a foreigner to purchase property, nor exemptions for capital income, nor social security, nor residence permits. These points fall under the General Tax Code and should be verified with the Directorate General of Taxes. Balmont Conseil is not a law firm or a local tax advisor: local tax matters should be assessed with a professional based in Benin. Matters pertaining to France, particularly the departure declaration and the accounts to be declared, are addressed in our pages on tax residency and exit tax.

What changes depending on your situation

• The nature of your income: dividend, interest, rent, capital gain, salary or profit from self-employment.
• Your status as a resident or non-resident in Benin determines the rate of 5 % or 10 % on dividends.
• The beneficiary's country of residence and the applicable convention.
• Your residency situation in France and Benin, year by year.

The rule depends on your situation. No results are guaranteed.