Ethiopia Tax Rates
Ethiopia operates a progressive personal income tax system with rates up to 35%. The Ministry of Revenue administers the tax system, which includes a 30% corporate tax rate, 15% VAT, and capital gains tax. Ethiopia is one of the fastest-growing economies in Africa, with special investment incentives in industrial parks and priority sectors to attract foreign investment.
Top Income Tax Rate
35%
Corporate Tax Rate
30%
VAT / Sales Tax
15%
Capital Gains Tax
15%
Detailed Tax Information
Income Tax Brackets
Ethiopia levies progressive personal income tax on employment income with seven brackets ranging from 0% on the first ETB 600 monthly to 35% on income exceeding ETB 10,900 monthly. Business income is taxed at rates from 10% to 35%. Non-residents are taxed only on Ethiopian-sourced income. The tax year follows the Ethiopian calendar (Meskerem 1 to Pagume 5/6).
| Income Range | Tax Rate |
|---|---|
| Br 0 – Br 7K | 0% |
| Br 7K – Br 20K | 10% |
| Br 20K – Br 38K | 15% |
| Br 38K – Br 63K | 20% |
| Br 63K – Br 94K | 25% |
| Br 94K – Br 131K | 30% |
| Br 131K+ | 35% |
Corporate Tax
Companies are taxed at 30% on taxable income. Mining companies may face different rates depending on the type of mineral. Industrial park enterprises enjoy income tax holidays of up to 10 years depending on the location and sector. Export-oriented businesses receive additional incentives. Agricultural income may qualify for reduced rates. Loss carryforward is available for five years.
Standard Rate
30%
Capital Gains Tax
Capital gains on the disposal of immovable property (buildings and land lease rights) are taxed at 15%. Gains on shares and bonds held for less than two years are taxed at 30%. Shares and bonds held for more than two years are taxed at 10%. The gain is calculated as the difference between the sale price and the acquisition cost.
Rate
15%
VAT / Sales Tax
VAT is levied at 15% on taxable goods and services. Exempt supplies include financial services, healthcare, education, and the sale or rental of residential property. Basic food items including injera, teff, and bread are exempt. Registration is mandatory for businesses with annual turnover exceeding ETB 1 million. The turnover tax (TOT) of 2% applies to businesses below the VAT threshold.
Standard Rate
15%
Cryptocurrency Tax
Ethiopia does not have specific cryptocurrency tax legislation. The National Bank of Ethiopia prohibits cryptocurrency transactions, making it effectively illegal to trade or hold crypto. No tax framework exists for digital assets, though general income tax principles could theoretically apply.
Tax Treaties
Ethiopia has approximately 20 double taxation agreements in force. The treaty network covers major investment source countries. Ethiopia continues to expand its treaty network to support its growing economy.
Treaty Network
20
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Ethiopia
See how much you could save by moving here from your current country.
$-1,177
Tax in United States
$24K
24.4% effective
Tax in Ethiopia
$26K
25.5% effective
Additional Cost
4.8%
more tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
