Withholding Tax Proclamation In Ethiopia Pdf Best Jun 2026

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

It is Part VI of the Income Tax Proclamation No. 979/2016. There is no standalone WHT proclamation. Searching for a separate file will lead you to incomplete documents.

KPMG Analysis of Proclamation No. 1395/2025 . Explanatory Note: Ministry of Finance Note on 2025 Reform . Important Compliance Deadlines

: WHT acts as a collection mechanism where tax is deducted at the earliest point of income realization. withholding tax proclamation in ethiopia pdf best

In Ethiopia, the is the foundational law that, until recently, governed all income tax matters, including withholding tax. However, on July 17, 2025 , Ethiopia's House of Peoples' Representatives passed the Income Tax (Amendment) Proclamation No. 1395/2025 , which significantly revised—and in many cases replaced—key provisions of the older law. This new amendment has been in effect since July 8, 2025, with some provisions, particularly those affecting withholding tax, becoming applicable on August 7, 2025.

Navigating the Ethiopian tax landscape presents distinct administrative hurdles: Common Challenge Strategic Solution

: Income generated within Ethiopia is subject to tax, regardless of the recipient's residency. Federal Income Tax Proclamation No

A standalone PDF of Proclamation 979/2016 is excellent, but the resource often includes references to:

As of early 2026, the following withholding rates apply under the amended schedules: Income Type Resident Rate Non-Resident Rate 15% (previously 10%) Interest 10% (PE/Savings) Royalties 5% (Art/Culture) 10% (Other) Management/Technical Fees Games of Chance 20% (previously 15%) Repatriated Profits Digital Content Creation 15% (if non-professional) Up to 5% (Digital Services Tax) Compliance and Administration Tax - KPMG agentic corporate services

Investors in Special Economic Zones may benefit from exemptions on withholding tax during the tax holiday period. 979/2016

Avoid PDFs from random document-sharing sites that are scanned copies of typewritten documents. They often contain OCR errors in key numbers (e.g., confusing 10% with 20%).

The rates of withholding tax in Ethiopia vary depending on the type of income. The rates are as follows:

A standard 2% withholding tax applies to the supply of goods within Ethiopia, provided the transaction meets the minimum financial threshold.

: For official local proceedings, companies rely on the Federal Income Tax Proclamation No. 979/2016 (Amharic Version) .

Applies to the supply of goods exceeding ETB 20,000 and services exceeding ETB 10,000 per contract.