Withholding Tax Proclamation In Ethiopia Pdf Best 🎯 Limited Time

| Type of Payment | Standard Rate | Notes | | :--- | :--- | :--- | | | 3% | Applied when a supplier provides a valid TIN and business license, and when the payment is for goods worth ETB 20,000 or more , or services worth ETB 10,000 or more . | | Purchase Voucher | 3% | Applied as an exception per Directive No. 2/2018 when a business uses a Purchase Voucher to record a cash payment to an unregistered supplier. | | Penalty Rate | 30% | Applied if the supplier does not provide both a valid TIN and a renewed business license at the time of payment. | | Dividends | 15% | Applies to gross dividend payments. Exemptions apply for intra-group dividends where the controlling company holds over 50% shares. | | Royalties | 10% (or 5% for art & culture) | Applies to gross royalty payments, covering intellectual property and commercial know-how. | | Interest | 10% (on most interest) | Savings deposits with financial institutions are taxed at 5%. Interest on credit sales of goods/services is taxed under Schedule C (Business Income). | | Technical & Management Fees | 3% | For resident payments. Non-resident payments are taxed at 15%. | | Games of Chance | 20% | Withheld from gross winnings payments. | | Capital Gains | 15% | Applied on gains from the disposal of property and shares. | | Undistributed Profits | 15% | Applicable to companies that do not demonstrably reinvest their profits. | | Income from Digital Content Creation | 15% | Applied as final withholding tax. Professional activity is taxed under business income rules. |

For anyone seeking the "best" PDF version, the most reliable sources are official government ministry websites (such as the Ministry of Finance and Economic Development, or MoFED), legal databases like the Ethiopian Legal Information Institute, and reputable legal information websites that provide direct links to the official Federal Negarit Gazette PDFs.

Distribution of company profits to shareholders attracts a 10% withholding tax . withholding tax proclamation in ethiopia pdf best

The Ethiopian withholding tax framework categorizes transactions into distinct bands, each carrying specific rates and compliance thresholds. 1. Supply of Goods and Services

A: Yes. The 2025 amendment (Proclamation No. 1395/2025) has increased several rates, including dividends to 15%, royalties to 10%, and games of chance to 20%. | Type of Payment | Standard Rate |

: The physical presence threshold for establishing a "Permanent Establishment" has been cut in half, from 183 days down to 91 days within any 12-month period.

In step with shifting global commerce, non-resident digital services and local digital creators face rigid final withholding structures. | | Penalty Rate | 30% | Applied

A trusted, comprehensive online legal repository in Ethiopia that hosts high-quality, searchable PDFs of Proclamation No. 979/2016 alongside its accompanying Regulations No. 410/2017.

| Income Type | Old Rate (2016) | New Rate (2025) | |-------------|----------------|----------------| | Dividends | 10% | | | Interest | 5%-10% | 15% | | Royalties | 5% | 15% | | Technical/Management Fees | 10%-15% | 10%-15% (depends on type) | | Repatriated Branch Profits | 10% | 15% | | Digital Services | N/A | Up to 5% (capped) |

Ethiopia's Startup Proclamation offers significant tax benefits for eligible startups, including: