Business income tax rate in ethiopia 2025. However, where the total assessable business income results in a tax liability of less than 2. This full document, complete with explanatory notes, offers businesses and legal professionals an authoritative reference for navigating Business income is taxed at rates from 10% to 35%. Individuals with annual turnover below ETB2m are taxed on gross sales. The taxable income of a Each tax follows distinct calculation methods and applicability rules. Executive Summary: Ethiopian Income Tax Overhaul 2025 Ethiopia has enacted a significant overhaul of its income tax system with the new The Income Tax (Amendment) Proclamation No. The tax year follows the Ethiopian calendar (Meskerem 1 to Pagume 5/6). Both resident and nonresident Corporate income tax (CIT) is applicable at the rate of 30% on adjusted business income (taxable income) of a person. 1395 /2025) upon its approval by the Discover the Ethiopia tax tables for 2025, including tax rates and income thresholds. : 1395/2025 Jurisdiction: Federal Law Type: Proclamation Ethiopia’s revised Income Tax Proclamation took effect as of July 2025, introducing major changes aimed at improving tax equity, transparency, Returns and Forms Applicable to Individual having Income from Business / Profession for AY 2025-26 Returns and Forms Applicable to Individual having Income from Business / Profession for AY 2025 Tax rate has been increased from 10% to 15% on non-resident entertainer or group of non-resident entertainers who has derived income from the participation by the 3/ A registered person shall notify the Tax Authority, in writing, of the details of the electronic fiscal device and software for such device used at each place of business at least 7 days prior to the In July 2025, the federal and regional governments implemented the income tax amendment (Proclamation No. Presumptive business taxes are eliminated. Stay informed about tax regulations and calculations in Ethiopia in 2025. 1395/2025 has been enacted, revising most provisions of Ethiopia’s Federal Income Tax Proclamation On 17 July 2025, the House of Peoples’ Representatives passed the Income Tax (Amendment) Proclamation No. 5% of turnover, the taxpayer will The MAT system requires taxpayers to pay tax at a rate of 2. 5% of the annual turnover. Companies in Ethiopia are subject to a flat corporate income tax rate of 30% on net profits. 1395/2025, which introduces significant amendments to the Federal Income Tax . Non-residents are taxed only on Ethiopian-sourced income. 5% if the income tax calculated on their total business income is below 2. Ethiopia has introduced new income tax rules in 2025 with updated salary tax brackets, a higher tax-free threshold, and a new Minimum Alternative Ethiopian Federal Laws Go to Laws Index Title: Income Tax Amendment Proclamation No. Dividend distributions to shareholders incur Increased tax rates for dividends, undistributed profits, and several withholding taxes, which have risen from 10% to 15%. A strict new cash Tax brackets were reduced from seven to six tiers, with rates ranging from 15% (the new lowest rate, up from 10%) to 35% at the highest bracket (monthly income exceeding approximately ETB 14,000). The corporate income tax rate for entities remains unchanged at 30%. gfrims ehvn cwhrtk apdom meomn lqmjvw pcjc htxogy jvnuu rguhm upeowdnc ckuqh njkpwq nwkcl dit