Eritrea

{"ftc_utility":"low","fbar_trigger_notes":"US citizens maintaining Eritrean bank accounts denominated in Nakfa (ERN) must file FBAR if aggregate foreign account balances exceed $10,000 USD at any point during the year. Eritrea's banking system is state-dominated and limited. Informal currency exchange is common due to foreign exchange controls, adding complexity to account valuation.","ftc_utility_reason":"Eritrea has progressive income tax rates up to 38%, so local taxes paid do generate Foreign Tax Credits usable against US tax liability. However, in practice very few US citizens reside in Eritrea long enough to accumulate significant local tax liability, and the absence of a tax treaty means no special coordination mechanism exists. FTC is theoretically available but rarely significant in practice.","presence_day_count_notes":"Eritrea imposes strict controls on foreign residents and movement. Visas are difficult to obtain and extend. Long-term legal residence is challenging for most US citizens, which may complicate establishing bona fide residence status. The 330-day physical presence test is mechanically achievable if the individual can legally remain in country, but Eritrea's exit visa requirements and government restrictions on movement add practical complications.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":2652,"local_tax_rate_on_earned_income":0.38,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign pension income received by Eritrean tax residents is taxable as ordinary income at progressive rates up to 38%. Eritrea taxes residents on worldwide income in principle, though tax administration capacity and international information exchange are minimal.","tax_rate":0.38,"locally_taxed":true},"social_security":{"notes":"No bilateral tax treaty between the US and Eritrea covers US Social Security benefits. Benefits received by Eritrea residents are technically subject to Eritrean income tax as ordinary income. Practical enforcement is limited.","locally_taxed":true,"treaty_protection":false},"roth_distributions":{"notes":"No treaty protection and no specific Eritrean exemption for Roth-style accounts. Distributions would technically be taxable as ordinary income, though Eritrea's tax authority has limited ability to monitor foreign account distributions.","locally_taxed":true},"us_401k_ira_distributions":{"notes":"No US-Eritrea income tax treaty exists. Distributions from US 401k or IRA accounts received by Eritrea tax residents would be treated as ordinary income and subject to the progressive tax schedule up to 38%. In practice, enforcement against foreign-sourced pension income is weak given limited tax administration capacity, but no legal exemption applies.","tax_rate":0.38,"locally_taxed":true,"treaty_protection":false}}

{"rate":0.38,"notes":"Eritrea does not have a separate capital gains tax. Gains are treated as ordinary income and taxed at progressive rates up to 38%.","details":{"tax_type":"Capital Gains Tax","country_name":"Eritrea","country_iso_code":"ERI","source_references":["Eritrea Proclamation No. 62/1994 - Income Tax Proclamation","IMF Fiscal Affairs Department country notes on Eritrea","African Tax Administration Forum (ATAF) country profiles"],"last_verified_date":"2026-06-03","general_description":"No standalone capital gains tax regime exists in Eritrea. Capital gains are folded into ordinary income and subject to the standard progressive income tax schedule, with a top marginal rate of 38%.","corporate_capital_gains":{"rate":0.35,"tax_treatment":"Capital gains of corporations are included in taxable business income and subject to the corporate income tax rate of 35%."},"individual_capital_gains":{"rate":0.38,"tax_treatment":"Capital gains for individuals are treated as ordinary income and taxed at progressive rates up to 38%. No preferential rate or exemption threshold applies."}}}

{"notes":"Dividends paid to resident and non-resident individuals are subject to a withholding tax in Eritrea. The standard withholding rate on dividends is 5%. This withholding is generally treated as a final tax for non-residents. Eritrea has very few active tax treaties so treaty rate reductions are rarely available.","rates":[{"rate":0.05,"type":"withholding","notes":"Standard withholding rate on dividends for both residents and non-residents under Eritrean income tax law. Treated as final tax for non-residents."}]}