Benin secures favourable taxation rights under a new bilateral agreement with the Netherlands, designed to address the specific needs of developing economies while meeting global BEPS standards. 

RF Report

Benin and the Netherlands signed an income tax agreement in Cotonou on 21 May 2026.

The agreement is aimed at preventing double taxation while strengthening measures against tax avoidance and evasion. The treaty aligns with current OECD/G20 Base Erosion and Profit Shifting (BEPS) standards and incorporates modern international tax practices. Recognising Benin’s status as a developing nation, the agreement includes provisions that allow the country earlier taxation rights compared to treaties with developed economies.

The treaty establishes capped withholding tax rates on outgoing payments, including interest and royalties, allowing Benin to retain source state levies on gross amounts up to agreed maximums. Additionally, a broader permanent establishment clause enables both countries to tax business activities more readily, particularly concerning service provision and insurance operations.

Both nations must complete their respective approval processes before the treaty takes effect. The Netherlands will submit the agreement to the Raad van State for review, followed by parliamentary consideration.