IPELA Taxation Services
IPELA strives to keep you upfront to your tax obligations. Our service benefits clients to trade in liability-free-zone. We advise on different Ethiopian tax schemes applicable to different industries. We equip clients to comply with different corporate taxation rules and procedures including Value Added Tax (VAT), Turnover Tax (TOT), withholding tax, dividend tax, customs duty, excise tax, and stamp and title transfer duty.
Ethiopian tax system comprises direct and indirect taxes. Direct taxes include personal income tax, rental tax, withholding tax, and corporation tax, among others. The main types of indirect taxes are VAT, customs duty, excise and turn over taxes.
Type and rate of taxes applicable in Ethiopia are:
- Corporate income tax 30%;
- Turn over tax (TOT) 2% and 10%;
- Excise tax 10% up to 100%;
- Customs duties 0% up to 35%;
- Income tax from employment 0% up to 35%;
- Withholding tax 2%;
- Value added tax (VAT) 15%;
- Export tax Nil (with exception of hides and skins-150%);
- Royalty tax 5%; and
- Dividend tax 10%.
Business entities engaged in Ethiopia shall comply with tax obligations like keeping book of records, periodic reporting to the Tax Authority, paying tax duties and transacting with other business entities in due consideration of tax obligations.
Companies need to pay a special attention to each specific tax regime to get insight from tax experts so as to enjoy tax incentives and tax holiday benefits.