Ethiopia

There are no group taxation consolidation rules in Ethiopia.

Transfer pricing

Ethiopia has transfer pricing provisions and rules that regulate dealings between related parties. The rules require taxpayers to have transfer pricing documentation in place at the time of filing the annual CIT return.

The rules largely follow Organisation for Economic Co-operation and Development (OECD) guidelines and apply to both resident and non-resident related parties. The Ethiopian transfer pricing rules require transactions between related parties to be at arm’s length.

Thin capitalisation

Ethiopia has thin capitalisation rules that apply where a foreign-controlled resident entity (entity where 50% or more of the membership interest is held by a non-resident person alone or together with other related person(s)) has an average debt-to-average-equity ratio in excess of 2:1 for a tax year.

Controlled foreign companies (CFCs)

Ethiopia has no specialised rules regarding CFCs.