The primary legislation governing this topic is Proclamation No. 979/2016 (the Federal Income Tax Proclamation), which superseded the earlier Proclamation No. 286/2002. The specific implementation details are often found in the accompanying Council of Ministers Regulation No. 410/2017.
| Type of Payment | Withholding Rate | Applicable To | |---|---|---| | Dividends | 10% | Shareholders | | Interest | 5% – 10% | Banks, financial institutions | | Royalties | 5% – 10% | Licensing, copyrights | | Technical services | 2% | Consulting, engineering, IT services | | Contractors (non-registered) | 10% | Construction, supplies, works | | Rent (building/equipment) | 5% – 7% | Lessor (non-resident or non-registered) | | Goods purchased (with TIN) | 1% | Suppliers (above 10,000 ETB) | | Goods purchased (no TIN) | 2% | Suppliers without TIN | withholding tax proclamation in ethiopia pdf best
Warning: 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 primary legislation governing this topic is Proclamation
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In conclusion, withholding tax is an important aspect of the Ethiopian tax system. The Withholding Tax Proclamation No. 608/2008 provides the framework for withholding tax in Ethiopia. It is essential for payers of income to understand their responsibilities and comply with the proclamation to avoid penalties.