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It's imperative that one knows the existing tax regulations in Ethiopia when one plans to start business in the country and while doing business in Ethiopia. What types of taxes are there in Ethiopia? What are the tax rates in Ethiopia? What are the tax exemptions in Ethiopia (if applicable)? How are taxes filed in Ethiopia? These are important questions on Ethiopian tax regulations. INCOME TAX PROCLAMATION NO. 286/2002 OR 286/1994 EC AND ITS AMENDMENT…
The Ethiopian government proclamation number 286/94 required all tax payers to register their businesses with the Ethiopian Custom and Revenue Authority (ECRA) office, submit the business owner’s finger print, and obtain a Tax Identification Number (TIN). For Ethiopians living outside of Ethiopia obtaining accurate and timely information to comply with this proclamation has been rather difficult. This is an attempt to clarify the requirement, the timeline for compliance, and provide other relevant information.What is a…
The value added tax (VAT) system, which came into effect on 41h July 2002, largely replaced the old business tax system of commodity and service taxes including the sales tax and the withholding tax. The VAT rate is 15% of the value of every taxable transaction by a registered person and all imports of goods and services other than those exempted. Taxable transactions which shall be charged with zero percent are: export of goods or…
Incomes taxable under Income Tax Proclamation No. 286/2002 (Article 6) include: incomes from employment, business activities,personal activities, entrepreneurial activities by non-residents, movable property, immovable property, alienation property, dividends distributed by resident company, profit shares paid by registered partnerships, interest paid by the national, regional or local governments, and license fees. Table 1 Taxable business income of companies is taxed at the rate of 30%. Other business taxpayers with business income ranging from ETB 1,801 to…