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Ethiopia follows a classical corporate income tax system in which tax is imposed both at the corporate and shareholder level. The corporate income tax rate is 30% and the dividend tax rate is 10%. All entities (except those currently enjoying income tax holidays) that carry on business or trade are subject to corporate tax. The principal taxes currently in place in Ethiopia are corporate income tax, value-added tax (VAT), customs duties, and excise taxes. Several final withholding taxes are imposed on income such as income from employment, dividend, and royalties.

At ELO, we provide comprehensive tax advice on all aspects of Ethiopian taxation law advising foreign and domestic corporate entities, trusts, and individuals in matters related to:

  • Tax advisory for national and international mergers, acquisitions, and joint-ventures;
  • Excise duties and VAT consultancy concerning the property and other commercial transactions;
  • Establishment of national and international holding structures;
  • Tax planning for national and international investment funds;
  • Income tax, VAT, and other indirect taxes;
  • Transfer pricing, expatriate tax;
  • Tax issues related to shareholder loans/thin capitalization;
  • Assisting clients with tax due diligence in connection with mergers and acquisitions.
  • And many more.