Ethiopia

Generally, payments for supply of goods (worth ETB 10,000 or more) and provision of services (worth ETB 3,000 or more) to a resident person are subject to WHT at the rate of 2%.

The 2% WHT applies if the supplier provides a valid tax identification number (TIN) and a business licence. If the TIN and the licence are not provided at the time of making the payment, the payer is required to subject the payment to a 30% WHT rate.

On other qualifying payments, WHT is levied at varying rates on a range of payments to residents and non-residents. Resident WHT is a final tax or creditable against CIT.

The table below shows the maximum rates of tax that recipients in those countries with a double taxation treaty (DTT) with Ethiopia can be charged on dividends, interest, and royalties. The table is for guidance only and shows taxation agreements that are currently in force.

Notes

* Most tax treaties Ethiopia has signed do not include provisions on management fees.

1. The 5% rate applies to interest paid on a loan granted by a bank of a contracting state, and the 10% rate applies in other cases.
2. The 0% rate applies if the beneficial owner is the government of the other contracting state or a company 49% of the capital of which is owned by the government. The 5% rate applies in other cases.
3. The 0% rate applies if the interest is derived by the government of the other contracting state or a company 49% of the capital of which is owned by the government or if the interest is paid on loans guaranteed by the government. The 5% rate applies in other cases.
4. The 5% rate applies if the beneficial owner is (i) a company (other than a partnership) that is a resident of the other state and directly holds at least 10% of the capital of the payer company or (ii) a pension fund. The 10% rate applies if the payer company is a resident of Ethiopia. The 15% rate applies if the payer company is a resident of the Netherlands.