Withholding | Tax Proclamation In Ethiopia Pdf Best Upd

Federal Income Tax Proclamation No. 979/2016 (English) .

The primary legislation governing withholding tax (WHT) in Federal Income Tax Proclamation No. 979/2016 , which was recently updated by the Income Tax (Amendment) Proclamation No. 1395/2025

Based on the analysis of the withholding tax proclamation in Ethiopia, we recommend the following: withholding tax proclamation in ethiopia pdf best

The withholding tax mechanism in Ethiopia operates as an advance payment system for income tax. Under this framework, a designated withholding agent (the payer) deducts a specific percentage from a payment made to a payee (the supplier or service provider). The agent then remits this deducted amount directly to the Ethiopian Ministry of Revenues (MoR).

A: For many types of income, yes. Withholding tax on dividends, interest, royalties, and payments to non-residents is generally a final tax. This means the recipient has no further liability to pay income tax on that specific income. However, withholding tax on payments for goods and services is creditable against the supplier's final corporate income tax liability. Federal Income Tax Proclamation No

A: If a supplier (a resident) does not provide a valid TIN and business license at the time of payment, the payer is required to withhold tax at a much higher rate of 30% instead of the standard 3%.

: Revised to 10% (up from 5%), though cultural/artistic royalties may remain at 5%. 979/2016 , which was recently updated by the

. These laws establish the rates, thresholds, and obligations for both domestic and international transactions. ✅ Key Rates and Thresholds (2025 Updates)