By Moïse Gnakouri, Doctoral researcher, Catholic University of Louvain, Brussels, Belgium
The Benin parliament, on December 8, by unanimous vote, adopted a new tax ruling procedure coming into force from 2021. The tax ruling may be based on a taxpayer’s prior transfer pricing agreement with the Benin tax administration.
To obtain this agreement, the taxpayer must send a written request to Benin’s chief of the tax administration.
This written request must include the taxpayer’s name and address and must accurately and truthfully describe the transaction.
The transfer pricing agreement will be legally binding for the tax authorities as long as the conditions specified by the financial law are respected.
This new tax provision aims to create a legal framework for negotiations between the tax administration and multinationals to discuss the most appropriate methods to determine the arm’s length price for cross-border intra-group operations. The goal is also to fight tax avoidance and profit shifting.
Indeed, we should remember that, according to a Dalberg study commissioned by the NGO OSIWA, West Africa, the region where Benin is located, is expected to have lost about USD 56 billion from 2012—2018 due to the lack of transfer pricing legislation.
Moïse Gnakouri
Moïse Gnakouri is a Ph.D. Researcher at Catholic University of Louvain. His Research is focused on tax and development, fiscal federalism, and international tax law.
Moïse holds a law degree from University Paris 1 Panthéon Sorbonne and a master in tax law and wealth management.
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