🧮 VAT and Withholding Tax

VAT

The standard rate is 15%. Registration is compulsory above an annual turnover of ETB 2,000,000 (Proclamation 1341/2024 and Regulation 570/2025). Returns are filed monthly. Input VAT is recoverable only against a supplier invoice bearing a valid TIN.

Withholding tax on purchases

• 2% on goods where the single transaction is ETB 10,000 or more.
• 2% on services where the single transaction is ETB 3,000 or more.
• 30% where the supplier has no TIN.

The withheld amount is paid to ERCA and a withholding certificate is issued to the supplier; file the certificate against the supplier's record.

Employment income tax and pension

Employment income tax is applied on the statutory progressive scale. Pension contributions are 7% employee and 11% employer.

Rates are stated as the group applies them. Where a specific transaction is material, confirm the position with the group's tax adviser before relying on this article.