Benin’s 2026 Amending Finance Law

Seven Key Tax Reforms Affecting Digital Transactions, Capital Income and Tax Audits

1. Taxation of withdrawals or transfers via mobile phone operators.

Anyone making a withdrawal, transfer, or using any other service will be required to pay a 5% levy on the pre-tax sales price of the service, which is remitted by the operator to the tax authorities. This is a major amendment to Article 273 of the General Tax Code (CGI), included in the amending finance law for the 2026 fiscal year.

2. Airbnb, Booking.com, and other furnished apartment rental platforms become tax collectors.

The 2026 amending finance law introduces paragraph 9 to Article 106 of the CGI, stipulating that short- and long-term accommodation bookings and rent collection transactions conducted via electronic platforms for properties located in Benin will be subject to a 12% withholding tax. The obligation to withhold and remit the funds no longer rests with the lessee, but directly with the platform owner, whether based in Benin or abroad, operating directly or through intermediaries.

3. Taxation of Dormant Reserves

Article 69 of the General Tax Code (CGI), point 10-b), stipulates that any profit not reinvested within three years of the end of the fiscal year will be automatically presumed to have been distributed. These profits will be taxed under the Income Tax on Movable Capital (IRCM) as if they had been distributed to shareholders.

To mitigate the impact of this new measure, companies are authorized to make a voluntary regularization until December 31, 2026, for existing reserves at a reduced rate of 7.5%. For the application of this new measure, IRCM payments on uninvested reserves must be made no later than March 31 following the expiration of the three-year period.

4. Capital gains from the sale of securities of Beninese companies are taxed in Benin, regardless of the residence of the seller or buyer.

5. The new provisions of Article 234 of the General Tax Code (CGI) concerning the territoriality of digital VAT stipulate that VAT is due at the user's place of residence for online services, while platform commissions are taxed as soon as a party to the transaction is in Benin for e-commerce.

6. Reduction in the duration of general accounting audits in companies.

The duration of the general audit by the tax authorities is reduced to two months instead of three months for companies with a turnover of less than 2 billion FCFA, and to four months instead of six months for companies with a turnover exceeding 2 billion FCFA. The taxpayer's response time is reduced from 30 days to 15 days. The tax authorities must confirm or reject any adjustments within one month instead of two.

7. Audit notices sent electronically by tax administration now have the same legal value as paper notices.