VAT Rules for E-commerce & Digital Services in Burkina Faso – 2025 Guide

As the digital economy continues to expand, Burkina Faso is taking steps to ensure that its tax framework keeps pace with the growing volume of cross-border e-commerce and digital service transactions. The National Assembly adopted the draft Finance Act 2025 during the plenary session held during the last week of December 2024. The new rules came into force on January 1, 2025. The introduction of Value Added Tax (VAT) rules for e-commerce marketplaces is a significant development in the country's efforts to adapt to the evolving economic landscape. These rules aim to ensure that digital transactions are taxed fairly and consistently, while also creating a level playing field for local businesses competing with international online platforms.

1. Overview of VAT on Digital Services in Burkina Faso

Burkina Faso’s VAT system, governed by the General Tax Code (Code Général des Impôts), applies to both goods and services, including digital services. The standard VAT rate in Burkina Faso is 18%, and this rate applies to most digital services provided to customers within the country.

Key Definitions:

Digital Services: These include services delivered or accessed over the internet or electronic networks, such as:

• Advertising

• Software licences (e.g. cloud or SaaS)

• Data storage and processing

• Platform operator commissions

• Telecoms

• Broadcasting

Place of Supply: For VAT purposes, digital services are considered supplied in Burkina Faso if the customer is located there.

2. VAT Registration Requirements for Foreign Providers

Foreign businesses providing digital services to customers in Burkina Faso may be required to register for VAT. While Burkina Faso has not yet established a specific revenue threshold for digital services, businesses should monitor their sales to Burkinabè customers and consider voluntary registration to ensure compliance.

Steps to Register:

1. Determine Taxable Supplies: Assess whether your digital services fall under Burkina Faso’s VAT rules.

2. Submit Registration Documents: Provide the necessary documentation, such as proof of business incorporation, tax identification numbers, and details of sales to Burkinabè customers.

3. Appoint a Local Representative: Currently, foreign businesses may need to appoint a local tax representative or an agent to handle VAT compliance.

3. VAT Collection and Invoicing Requirements

Once registered, businesses must comply with VAT collection and invoicing rules:

• Charging VAT: VAT must be charged at the rate of 18% on all taxable digital services provided to customers in Burkina Faso.

• Issuing Compliant Invoices: Invoices must include:

  • The supplier’s name, address, and VAT identification number.

  • The customer’s name and address.

  • A description of the digital services provided.

  • The VAT amount charged, clearly stated in XOF (West African CFA franc).

4. Filing VAT Returns and Remitting Taxes

Registered businesses are required to file periodic VAT returns and remit the collected VAT to the Burkinabè tax authorities.

Key Points:

• Deadlines: Ensure timely submission of VAT returns to avoid penalties.

• Currency Conversion: VAT must be remitted in XOF. Businesses should use the official exchange rate at the time of remittance.

• Record-Keeping: Maintain detailed records of all transactions, including invoices, receipts, and VAT returns, for at least five years.

5. Challenges for Foreign Providers

Complying with Burkina Faso’s VAT rules for digital services presents several challenges for foreign businesses:

• Lack of Clear Guidelines: The absence of specific thresholds and detailed regulations for digital services creates uncertainty.

• Complex Registration Process: Foreign businesses may face difficulties navigating the registration process, especially if a local representative is required.

6. The Future of VAT on Digital Services in Burkina Faso

Burkina Faso is likely to continue refining its VAT rules for digital services, potentially aligning with international standards such as the OECD’s guidelines on the taxation of the digital economy.

The Government of Burkina Faso has recognized that the existing VAT framework for foreign providers of digital services and e-commerce suppliers is not functioning as intended. Key challenges, including a lack of transparency, inadequate technical infrastructure, and the absence of a simplified registration and reporting system, have contributed to the reluctance of these providers to voluntarily comply with VAT obligations.

Conclusion

The newly adopted regulations require e-commerce platform operators to collect, report, and remit VAT on behalf of suppliers for goods and services sold through their platforms. However, the enactment of the 2025 Finance Act and the introduction of VAT obligations for non-resident digital service providers mark only the initial phase of implementation. In the coming months, the relevant authorities are expected to issue guidelines or other clarifications to help foreign businesses navigate compliance with these VAT requirements.

Sources; Burkina Faso’s General Tax Code (Code Général des Impôts), Developing Telecoms