Source-cited draft: corporate income tax for Ethiopia (tax year 2025) — rates, thresholds and rules with primary-source citations. Unverified; pending local-accountant review.
Written by the OpenAccountants team. Written by the OpenAccountants team from the official sources it cites.
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Every figure is drawn from this Guide and cited to its source.
Standard corporate income tax rate
30Income Tax Proclamation No. 979/2016View source ↗
Tax base
Net business profit (gross income less deductible expenses) per the financial accounts as adjusted for taxIncome Tax Proclamation No. 979/2016
Mining / petroleum sector rate
Mining 25%; petroleum operations subject to separate sector rulesMining Income Tax ProclamationView source ↗
Minimum Alternative Tax (MAT)
2.5% of annual turnover where the declared tax liability falls below that amount; creditable against future taxIncome Tax (Amendment) Proclamation No. 1395/2025View source ↗
Tax on undistributed profits
15% on undistributed profits of corporate bodies unless reinvested (used to increase capital/shareholders' equity) within 12 months of year-endIncome Tax (Amendment) Proclamation No. 1395/2025View source ↗
Withholding tax on dividends
15% (increased from 10%)Income Tax (Amendment) Proclamation No. 1395/2025View source ↗
Withholding tax on interest
10% (increased from 5%); final taxIncome Tax (Amendment) Proclamation No. 1395/2025View source ↗
Withholding tax on royalties
5% to 10% depending on residency/contextIncome Tax (Amendment) Proclamation No. 1395/2025View source ↗
Withholding on domestic supplies of goods/services
2% withholding on payments for goods/services above a de minimis thresholdIncome Tax Proclamation No. 979/2016View source ↗
Non-resident taxable-presence (PE) time threshold
Reduced from 183 days to 91 days for services and construction/installation projectsIncome Tax (Amendment) Proclamation No. 1395/2025View source ↗
Annual return filing/payment deadline
Within 4 months of the end of the tax yearTax Administration Proclamation No. 983/2016View source ↗
Quarterly advance income tax (large taxpayers)
Category A large taxpayers make quarterly advance payments, settled within 30 days after each 3-month cycleMinistry of Finance advance income tax directive (2025)View source ↗
Rendered from the canonical facts model. General reference only — confirm with a qualified professional before acting.
Resident companies pay corporate income tax at a flat 30% on net business profit; non-resident companies are taxed on Ethiopian-source income. The 2025 amendment introduced a minimum alternative tax, a tax on undistributed profits, and higher dividend/interest withholding rates.
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