Individual - Tax administration

Last reviewed - 17 November 2023

Taxable period

The tax year in Ethiopia runs from 8 July to 7 July.

Tax returns

Individuals who receive employment income only are not required to file personal income tax returns. Instead, employers must withhold PAYE taxes from each payment to an employee and remit the payment to the tax authorities based on the amount withheld during each calendar month.

Payment of tax

PAYE taxes should be paid by the end of the month following the month the income was earned (i.e. the month for which the payment/income relates to).

In Ethiopia, the calendar year runs on a slightly different basis. For example, statutory payments due for the month of December 2020 would be due at the end of the following month. In Ethiopia, the end of the following month is equivalent to 7 or 8 February (as opposed to 31 January) since the Ethiopian calendar has a time lag of 7 to 8 days.

Statute of limitations

The statute of limitation in Ethiopia for taxes is five years from the date that the tax declaration for the tax period to which they relate was filed with the tax authority.