Overview
VAT is due when a non-resident provides goods or services via an electronic platform to a resident established in Benin. VAT is charged by the non-resident regardless of the nature of the beneficiary. (Article 224 of the General Tax Code (GTC); Tax administration note of 2023).
Key provisions applicable to VAT on ESS
| Particulars | Description |
| Scope | B2C only. Where the customer is a VAT-registered business subject to the Benin VAT regime, the non-resident supplier is not required to charge VAT. In such cases, the VAT is accounted for by the customer under the reverse-charge mechanism. |
| Liability to remit VAT | The non-resident supplier is liable to remit VAT where the recipient is a B2C. Where recipient is a VAT registered business in Benin, the local business must account for VAT as per the reverse charge mechanism. |
| VAT rate | 18% |
| Taxable value | Price payable by the recipient of the supply |
| Effective date | 14 April 2023 |
| VAT registration threshold | Companies or individuals with a turnover exceeding XOF 100,000,000 (circa USD 170,000) |
| Tax invoice | Yes |
Services in scope
VAT applies to:
- The supply of digitised products in general, including software and software modifications or upgrades
- Services that provide or support a professional or personal presence on an electronic network, such as a website or web page
- Services generated automatically from a computer via the Internet or an electronic network, in response to the input of specific data by the recipient
- The transfer for, consideration, of the right to offer a good or service for sale on an Internet site operating as an online marketplace, on which potential buyers make their bids by means of an automated procedure and on which the parties are notified of a sale by electronic mail generated automatically from a computer
- Internet Service Packages (ISP) of information in which the telecommunications component forms an accessory and subordinate part (i.e. packages going beyond simple internet access and including other elements such as content pages providing access to news, weather or travel reports, playgrounds, website hosting, access to on-line debates, etc.)
- The following services: the provision of websites, website hosting, remote maintenance of programs and equipment.
Registration and compliance
Non-resident suppliers are required to register locally with the tax authorities. Once registered for VAT, they must complete and submit monthly VAT returns. VAT returns and payments are due by the 10th of every month for the preceding month.
Invoicing
The law does not specify the invoicing method to be adopted.
VAT on costs
Non-resident suppliers registered under the simplified tax registration are precluded from recovering any VAT incurred on costs in Benin as input tax. Accordingly, any Benin VAT incurred by the non-resident suppliers are an absolute cost.
Other considerations
A withholding tax of 20% applies to all remuneration for ESS provided or used in Benin and paid to foreign electronic service suppliers located in a country with no DTA with Benin.
VAT on cryptocurrency/digital assets
Currently, Benin does not have specific VAT rules or regulations relating to cryptocurrency-related activities or digital assets.
Related Content
Follow us
