Configure automated thresholds within your ERP or accounting software.
The payer of the income is responsible for withholding tax. The payer is required to:
You can download the Withholding Tax Proclamation in Ethiopia PDF from the Ethiopian Revenue Authority website or other online sources.
The amended law sets specific thresholds and rates for different income types: Income Type Resident Rate Non-Resident Rate Supply of Goods Above ETB 20,000 Provision of Services 15% (Management/Tech) Above ETB 10,000 No threshold Varies by institution 15% (10% Art) No threshold Digital Content For non-professional activities Penalty Rate: withholding tax proclamation in ethiopia pdf best
WHT on insurance premiums and royalties for non-residents has increased from 5% to Payment & Filing: Withholding agents must remit taxes to the Ministry of Revenue after the month the payment was made. Advance Payments: Businesses must now pay of their prior year's tax as a quarterly advance payment. Essential PDF Resources
: Provides downloadable PDF copies of Proclamation No. 979/2016 alongside updated directives.
Ethiopia’s tax system has undergone significant reform over the last decade. Among the most crucial mechanisms for revenue collection is . For businesses, accountants, and legal advisors operating in Ethiopia, understanding the official Withholding Tax Proclamation is not optional—it is a legal necessity. Configure automated thresholds within your ERP or accounting
What is your or taxpayer category (Category A or B), and are you currently registered for VAT ?
| Type of Payment | Withholding Rate | Threshold (ETB) | | :--- | :--- | :--- | | Real estate rent (building) | 5% | Above 600 ETB/year | | Real estate rent (other) | 2% | Above 600 ETB/year | | Contractors (local) | 2% | Above 10,000 ETB/payment | | Transport services | 1% | Above 2,000 ETB/payment | | Consultancy & technical fees | 10% | No threshold | | Lottery/prize winnings | 15% | Any amount |
: The threshold has been raised to ETB 10,000 per contract (previously ETB 3,000). The amended law sets specific thresholds and rates
The withholding tax proclamation in Ethiopia has several benefits, including:
: All federal and regional state organs, public enterprises, and ministries.
The new system uses 6 progressive brackets ranging from 0% to 35%.