New ethiopian income tax proclamation. Council of Ministers Regulations No.

• New ethiopian income tax proclamation. Below is a schedule that specifies tax bands and their tax rates. [ ]/2023. Income Tax Proclamation Folder Details 979_2008_new_income_tax_pro. Sub-leases 29 17. Amendment The Value Added Tax Proclamation has exercised its power to lift the income tax levied on the share premium paid by non-resident investors in existing companies in Ethiopia considering its economic, governance and social implications. 2. The report also highlights important changes to the structure of the tax system which have occurred over the past few years, and the associated tax revenue implications. If no tax is payable, the penalty shall be Birr 2,000 for each tax period the taxpayer fails to maintain the documents for the purpose of income tax. The Federal Democratic Republic of Ethiopia (FDRE) House of Peoples' Representative has amended Excise Tax Proclamation number 1186/2020 and issued Excise Tax (Amendment) Proclamation No. Taxable Rental Income 27 16. Definitions A term used in this Proclamation that is defined in the Tax Administration Proclamation shall have the meaning in the Tax Administration Proclamation unless defined otherwise in this Proclamation. It means that tax losses will only be enjoyed by taxpayers who make a taxable income. Accordingly, directive no-43/2014 can be applied as a legal transfer pricing document even after the promulgation of the new law. , PLC, Share Company) is taxable at the rate 30%; May 26, 2024 · Income Tax Income tax is governed by the Federal Income Tax Proclamation No. pdf: 4 Years Ago: Download (660 KB) Addis Ababa ,Ethiopia Tel: The employee's income tax system divides taxable income into different tax bands. Rental income is taxed under FITP No. (Published on September 2, 2024) Federal Democratic Republic of Ethiopia, it is hereby proclaimed as follows: GENERAL 1. 979/2016 (herein after the Proclamation), a withholding tax is a tax on an income which is required to be withheld by the withholding agent. Examples of calculating salary income tax, cost sharing, pension and other deductions to find the employee's net pay. New Rental Building Notification 29 PART FOUR SCHEDULE 'C' INCOME These Regulations may be cited as the “Council of Ministers Federal Income Tax Regulations --/2016”. 979/2016 (English) Scope of Application: This Proclamation shall apply to residents of Ethiopia with respect to their worldwide income, and to non-residents with respect to their Ethiopian source income. 1 Value-added tax regulations 21 8. 1 The federal tax administration regulations 21 7. The Value Added Tax Proclamation 21 8. Key points: - It adds a new definition of "windfall profit" as profits obtained without own efforts due to economic or political changes. Abstract This research investigates the effect of the new income tax Proclamation 979/2016 on the employee’s disposable income, tax liability and the income inequalities among the high and low income earning groups of employees. [ ]/2023 VALUE ADDED TAX PROCLAMATION WHEREAS, NOW, THEREFORE, in accordance with Article 55(1) and (11) of the Constitution, it is hereby proclaimed as follows: PART ONE GENERAL 1. - It empowers the Minister to issue directives prescribing what qualifies Jul 16, 2021 · Proclamation no. Apr 30, 2008 · As per Income Tax Proclamation No. 285 /2002 (as amended); NOW, THEREFORE, in accordance with article 55 (I) and (l l) of the Constitution, it is hereby proclaimed as follows. Addis Ababa, Ethiopia + 251-111 552015 + 251-111 555189 Fax infopr@mofed. Short Title Proclamation No. Feb 27, 2021 · Contact. tax authority will attract a penalty of up to 20% of the tax payable by the taxpayer under the tax law for the tax period to which the failure relates. Jul 26, 2024 · The new VAT Proclamation No. Ethiopia’s latest directive on tax incentives for investment expansion, Directive No. 2019, Thesis. a) "Proclamation" means the Income Tax Proclamation No. May 27, 2017 · After more than a decade, the Government of Ethiopia is revising its tax and tax administration regulations, which will implement the tax proclamation adapted by the House of People’s Representatives back in 2016. • Proclamation No. Extension of tax loss carry forward for manufacturers Income tax is divided into five schedules in Ethiopia. Ethiopian resident individuals are taxed on their worldwide income. b) “Tax Authority" shall mean the Federal Inland Revenue authority Head Office or any of its branch offices established in any part of Ethiopia and the tax authorities of the regional All income which cannot be subject to either schedule A, B or C shall be subject to tax according to Schedule D of the Income Tax Proclamation. 908/2015. 979/2016 (“Proclamation”), any expenditure incurred during the pre-mining stage will be capitalized by the time the company starts commercial operation over the site over which the expenditure is incurred. pdf: 979_2008_new_income_tax_pro. g. et PROCLAMATION NO. Sep 16, 2023 · The new/revised property tax in Ethiopia signifies a significant step towards enhancing revenue generation for the Addis Ababa City Administration. Rental income. 1233/2021 Federal Judicial Administration Proclamation. በተለያየ ጊዜ የወጡ የሀገር ዉስጥ ታክስ አዋጆች. The Federal Tax Administration Proclamation 20 7. ’ INCOME TAX PROCLAMATION WHEREAS, the Declaration on Economic Policy of the Government of the Federal Democratic Republic of Ethiopia inaugurates a new era in social ari’d economic relations and institutions in this country; Continued application of the previous Income Tax Proclamation No. 103 ADDIS ABABA 20th August, 2016 ¯ Issued under the Authority of the House of peoples Representatives of the Federal Democratic Republic of Ethiopia FEDERAL TAX ADMINISTRATION PROCLAMATION Federal Negarit Gazette Extraordinary Issue Proclamation No. 979/2016”. It applies to both residents and non-residents earning income in Ethiopia. 983/2016 Federal Tax Administration Proclamation. 1. 916/2015 and Article 99 of the Federal Income Tax Proclamation No. Aug 14, 2024 · In Ethiopia, individuals are taxed on income that is sourced from Ethiopia, wherever paid. The tax system is tabular, with different rates for various income types: Employment Income: Includes wages, salaries, allowances, bonuses, and other benefits Oct 22, 2021 · Under Article 101/6 of proclamation 979/2016, the new Federal income tax law unequivocally indicates the applicability of regulations and directives issued pursuant to prior income tax law (286/94). 286/2002. Oct 21, 2020 · 7. Interest income. The Federal Income Tax Proclamation No. Definitions In this Proclamation unless the context provides otherwise: 1/ “Employer” means a person or an undertaking who employs one or more natural persons in accordance with Article 4 of this Proclamation. 983-2016 . Short Title This Proclamation may be cited as the "Value Added Tax Proclamation No. 979/2016. Short Title This Article provides that the proclamation may be cited as the Sep 2, 2024 · directive to provide electricity and water consumption exempt from value added tax no. 1231/2021 The System of Inter-Governmental Relations in the Federal Democratic Republic of Ethiopia’s Determination Proclamation. Income Tax Rates 27 15. Proclamation’ No. 410/2017 has been approved by the Council of Ministers. Employment Income 25 PART THREE SCHEDULE 'B' INCOME FROM RENTAL OF BUILDINGS 26 13. SECTION TWO APPLICATION OF TERMS USED IN THE 3. According to the Ethiopian Income Tax Proclamation No. According to the above tax rate schedule, employees who earn up to 150 birr a month are below the threshold for paying employment income This Proclamation may be cited as the “Federal Income Tax Proclamation No. - It introduces a new Article allowing the Minister to tax windfall profits of specified businesses at determined rates. As taxpayers navigate the updated tax obligations and potential impacts on rents and property prices, careful consideration and proper support from the government will be essential. 1156/2019 2. The work was carried out with the financial and technical Federal income tax regulation No 410-2017 is a summary of the proclamation issued by the government of Ethiopia federal income tax. Taxable Rental Income (Article 15 of the Proclamation) The taxable rental income of a taxpayer for a tax year is the gross amount of income derived by the taxpayer from the rental of a building or buildings for the year reduced by the total amount of deductions allowed to the taxpayer for the year. Imposition of Rental Income Tax 26 14. The Article references in these notes are to Articles in TAP unless otherwise stated. The same rates of tax are applicable to both residents and non May 26, 2024 · In the current Ethiopian Income Tax Laws, depreciation methods and rates for depreciable assets are addressed in Income Tax Proclamation No. Conclusion: The proclamation allows the Agency to provide construction permits, work permits, issuance of business licenses, issuance of tax identification numbers, notarization of memorandums and articles of association and amendments thereto and effecting registration of trade or firm as enumerated under article 30 of the proclamation. 941/2023, aims to stimulate economic growth by providing substantial benefits to investors. Foreign companies are taxed at the same rate as national ones. 979/2008 and subsequent amendments. " . Taxable value is calculated by Apr 30, 2008 · Other incomes deemed as an Ethiopian source income include; (a) a dividend paid to the person by a resident body; (b) rental income from the lease of immovable property located in Ethiopia or, movable property located in Ethiopia; (c) a gain arising from the disposal of an immovable property located in Ethiopia; (d) an insurance premium Nov 2, 2021 · Next Article Tax on Coffee Exported from Ethiopia (Amendment) Proclamation No. Short Title This Article provides that the proclamation may be cited as the The same is true for the production of beer and beer malt, which is exempt from income tax for two or three years under the beverage industry. Withholding Agent means a person liable to withhold tax from a payment made to a person and includes a person required to self-withhold tax. 979-2016 addresses issues concerning the taxation of income deriving entities in Ethiopia. 296/1986 (as amended); ›› [3/ terms and phrases used shall have the same meaning as in the Proclamation or the Federal Tax Administration Proclamation No. 1235/2021 A proclamation to amend Ethiopian Electoral law. PROCLAMATION NO. " 2. 1341/2024, represent a major design to modernize the efficiency and equity of the VAT system, broaden the tax base, and ensure that emerging sectors contribute to national revenue from the growing digital economy, this strengthens Ethiopia’s future growth and alignment with international standards. As such, a new proclamation amending the previous Federal Income Tax Regulation No. Federal Democratic Republic of Ethiopia Proclamation. Excise Tax Proclamation Amendment. This part of the Ethiopian Federal tax administration proclamation discusses the different types of tax assessments. can only deduct a tax loss against a taxable income. TOP. PRQCLAMATION NO. further amend the Value Added Tax Proclamation No. pdf: Jan 9, 2023 · Title: Ethiopia Federal Income Tax Proclamation No. 1021/2024 (published on september 5, 2024) Uploaded date: Sept. The new changes in the proclamation include: C. Mar 9, 2009 · According to the Federal Income Tax Proclamation No. C. Short Title This proclamation may be cited as the "Value Added Tax (amendment) Proclamation No. gov. The new Code also introduces a variety of insolvency procedures in addition to bankruptcy, including preventive restructuring proceedings and simplified reorganization proceedings. Type of law: Proclamation. The Excise Tax Proclamation 21 10. 1287/2023. 53/1993 (as amended) and the Petroleum Operations Income Tax Proclamation No. The Income tax rates and personal allowances in Ethiopia are updated annually with new tax tables published for Resident and Non-resident taxpayers. Interest income is subject to WHT at a rate of 15%, which is the final tax. Mar 14, 2012 · Rental Income Tax in Ethiopia: rates, deductions. Browse different tax rate table (tax brackets) and the calculation formula based on gross salary. Ethiopia Personal Income Tax Tables in 2024. _____/ COUNCIL OF MINISTERS REGULATIONS ON THE FEDERAL INCOME TAX These Regulations are issued by the Council of Ministers pursuant to Article 5 of the Definitions of Powers and Duties of the Executive Organs of the Federal Democratic Republic of Ethiopia Proclamation No. e) a declaration required to be filed under the Excise Tax Proclamation; f) a turnover tax return required to be filed under the Turnover Tax Declaration; g) a tax declaration required to be filed by a taxpayer under this Proclamation; 35/ “tax law” means: a) this Proclamation; b) the Income Tax Proclamation; Sep 1, 2021 · Revised after 62 years, the new Code allows for the legal recognition of holding companies and single-member companies, as well as allowing virtual shareholder meetings. . Dec 10, 2014 · In addition to the two article amendments, the directive also states Per Diems paid to government officials and civil servants are exempted from being subject to income tax “The highest rate of Per Diem for government officials and civil servants is 225 Br, that is why the directive will not be applicable for government officials,’’ said Mining Income Tax Proclamation No. Definitions The loss cannot be carried forward more than five income tax periods. 2 Tax administration directives 21 8. 1. TAP applies for the purposes of the Income Tax Proclamation (“ITP”), Value Added Tax Proclamation, Excise Tax Proclamation, Turnover Tax Proclamation, and Stamp Duty Proclamation. 979/2016 (Amharic) Scope of Application: This Proclamation shall apply to residents of Ethiopia with respect to their worldwide income, and to non-residents with respect to their Ethiopian source income. 286/2002 for losses carried forward under the same Proclamation There were occasional arguments on part of some taxpayers that they should be entitled to a new set of loss-carry forward privilege after introduction of the currently applicable Income Tax Proclamation in This document amends the Income Tax Proclamation of Ethiopia. 1 157/2019. Non-residents are taxed on their Ethiopian-sourced income. The explanatory notes on the Federal Income Tax Proclamation 979/2016 are developed as part of the Ethiopian Revenue and Customs Authority (ERCA) and Ministry of Finance and Economic Cooperation’s (MoFEC’s) work on the federal income tax system in Ethiopia. sportation Business of Non-residents1/ A non-resident conducting an international air transportation business shall pay business income tax at the rate of 3% of the gross amount derived by the non-resident for the carriage of passengers, livestock, mail, merchandise, or goods embarked or loaded in Ethiopia and d. Particular of income Resident Non- resident Insurance premium or royalty 5% 5% Dividends 10% 10% Interest 5%* and 10%** 5% * and 10%** Management or technical fees 2% 15% Entertainment - 10% In this report, we provide a detailed overview of Ethiopia’s current tax system and the evolution of tax revenue collections over the last 10 years. As per the Proclamation, the tax rates are as follows: Taxable business income of bodies (e. 286/2002 Income Tax Proclamation page 1867. ___/2016 FEDERAL INCOME TAX PROCLAMATION WHERAS, it has become necessary to introduce modern and efficient tax system that supports the economic development and which is in accord with the level of economic development achieved so far; WHERAS, it is found essential to make the tax system fair and bring income that Imposition of Employment Income Tax 24 11. It also addresses the issues of certification of tax declaration and advanced tax declaration. The production of alcoholic beverages is exempt from income tax for one to two years, depending on the investment sector, and the production of wines is exempt from income tax for three to four years. 286/2002. Effectively this amendment prohibits accumulation of tax losses from one year to another where the taxpayers suffer tax losses over a period of time. Part five of the Ethiopian Federal tax administration proclamation mentions how taxpayers file a tax declaration. 5, 2024 VAT Proclamation no 1341-2016 with annex. 979/2016 (hereinafter the Proclamation), tax is imposed on business income for each tax year at the rates specified below. Definitions 1/ In these Regulations: a) “Proclamation” means the Federal Income Tax Proclamation No. 715/2011 Private Organizations Employees’ Pension Proclamation as amended by Proclamation No. Income Tax Proclamtion Folder Details Technical Notes-Tax administration proclamation No. 286-2002 Published on : Thu, 2013-02-28 09:18 WHEREAS, the Declaration on Economic Policy of the Government of the Federal Democratic Republic of Ethiopia inaugurates a new era in social and economic relations and institutions in this country; Nov 2, 2021 · Next Article Tax on Coffee Exported from Ethiopia (Amendment) Proclamation No. 979/2016, specifically in article 25, and further Council of Ministers Regulations No. Both individuals and business entities can deduct up to 10 percent of their taxable income that is donated to Ethiopian charities and societies (Income Tax Proclamation Article 24). These are a range of income bands with different tax rates. 2. May 27, 2024 · Ethiopia’s Directive on Tax Incentives for Investment Expansion: Key Provisions and Benefits. 2 Value-added tax directives 21 9. 1229/2020 Excise Tax (Amendment Feb 28, 2013 · (የገቢ ግብር አዋጅ ) Income Tax Proclamation No. An individual is either taxed as a resident or a non-resident. Renta. The proclamation provides taxable incomes, exceptions and exemption from income tax. Such expenditure will be capitalized and then deducted in two different ways. The Turnover Tax Proclamation 21 11. Inclusion of new excisable items Aug 14, 2024 · Dividends declared by Ethiopian resident companies are subject to a 10% dividend withholding tax (WHT) for individual shareholders, which is the final tax. ___/2016 FEDERAL INCOME TAX PROCLAMATION WHERAS, it has become necessary to introduce modern and efficient tax system that supports the economic development and which is in accord with the level of economic development achieved so far; WHERAS, it is found essential to make the tax system fair and bring income that Apr 27, 2023 · Executive summary. 983/2016 th Jan 9, 2023 · Title: Ethiopia Federal Income Tax Proclamation No. Employment Income Tax Rates 25 12. Proclamation No. Business Income Tax Rates. ወደ ውጪ አገር በሚላክ ቡና ላይ ስለሚከፈል ታክስ የወጣው(ማሻሻያ) አዋጅ ቁጥር 287/1994. 979/2016; and b) “Repealed Proclamation” means the Income Tax Proclamation 286/2002(as amended), Mining Income tax Proclamation OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA 22nd year No. Filter and Order. Because the "charities and societies" terminology differs from the terminology for CSOs in the new CSO Proclamation, it is unclear whether and how Ethiopian tax Mar 19, 2018 · Employee payroll calculation in Ethiopia using 2021 latest tax rates. 979/2016 Federal Income Tax Proclamation. Part 6: Tax Assessments. 287/2002. If a resident taxpayer has foreign taxable income on which he has paid taxes abroad, the taxpayer will be entitled to a tax credit equal to the lesser of the income tax paid or the tax payable in Ethiopia in respect of the foreign income. The new Ethiopian excise tax proclamation No 1287/2023 became ratified by the House of Peoples Representatives to be effective starting 27 April 2023. 983/2016, as the case may be. The income tax proclamation issued in 2016 and repealed the previous proclamation has progressively clarified some unclear issues under the former proclamation. The Tax tables below include the tax rates, thresholds and allowances included in the Ethiopia Tax Calculator 2024. mbjwlk qyzjh igwcjdx wkqibgh kijq vyapmxo izab ateto hqbb tnazb