Ethiopia

{"ftc_utility":"high","fbar_trigger_notes":"Expats required to open local Ethiopian Birr accounts for salary payment or local transactions will likely exceed the $10,000 FBAR threshold. Ethiopian banks include the Commercial Bank of Ethiopia and Dashen Bank. FBAR filing on FinCEN Form 114 is required annually if aggregate foreign account balances exceed $10,000 at any point during the year.","ftc_utility_reason":"Ethiopia taxes residents on worldwide income at rates up to 35%. US expats paying Ethiopian income tax on their earned income can claim the Foreign Tax Credit to offset US federal tax liability dollar-for-dollar. Given the relatively high marginal rates, the FTC is often more advantageous than FEIE for higher earners, and many expats use a combination strategy.","presence_day_count_notes":"Ethiopia does not issue long-term work visas with ease for most nationalities. Many expats working for NGOs, embassies, or international organizations operate under specific permits. The 330-day physical presence test is achievable for those with valid residency or work permits. Frequent regional travel can complicate day counts but does not categorically prevent qualification.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":14000,"local_tax_rate_on_earned_income":0.35,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign pension income received by Ethiopian tax residents is subject to Ethiopian income tax at progressive rates up to 35%. Ethiopia taxes residents on worldwide income. No treaty relief is available.","tax_rate":0.35,"locally_taxed":true},"social_security":{"notes":"No US-Ethiopia totalization or income tax treaty exists. US Social Security benefits received by Ethiopian tax residents are not protected by treaty and could be subject to Ethiopian income tax as foreign-source income, though practical enforcement is limited.","locally_taxed":true,"treaty_protection":false},"roth_distributions":{"notes":"No US-Ethiopia tax treaty exists to provide exemption. Roth distributions could be taxable in Ethiopia if the recipient is a tax resident, though the practical enforcement for foreign retirement accounts is limited. Residents should seek local tax advice.","locally_taxed":true},"us_401k_ira_distributions":{"notes":"Ethiopia and the US have no bilateral tax treaty. US 401k and IRA distributions received by an Ethiopian tax resident would be treated as foreign-source income subject to progressive employment or other income tax rates up to 35%. Taxation depends on characterization of the distribution under Ethiopian domestic rules.","tax_rate":0.35,"locally_taxed":true,"treaty_protection":false}}

{"rate":0.15,"notes":"Capital gains on immovable property are taxed at 15%. Gains from share transfers are taxed at 30% for companies or 15% for individuals depending on asset type.","details":{"tax_type":"Capital Gains Tax","country_name":"Ethiopia","country_iso_code":"ETH","source_references":["PwC Worldwide Tax Summaries - Ethiopia","Ethiopian Income Tax Proclamation No. 979/2016"],"last_verified_date":"2026-06-03","general_description":"Ethiopia levies capital gains tax on gains from transfers of certain assets. Gains from the disposal of immovable property and shares in companies are the primary taxable events. Rates differ by asset type and taxpayer category. There is no separate capital gains tax law - gains are addressed under the Income Tax Proclamation No. 979/2016.","corporate_capital_gains":{"rate":0.3,"tax_treatment":"Capital gains on disposal of business assets are included in ordinary business income and taxed at the standard corporate income tax rate of 30%."},"individual_capital_gains":{"rate":0.15,"tax_treatment":"Gains from disposal of immovable property are taxed at 15%. Gains from transfer of shares in Ethiopian companies are taxed at 30% if held by a company or 15% if held by an individual. The tax is withheld at source on share transfers."}}}

{"notes":"Dividends paid to resident and non-resident individuals are subject to a 10% withholding tax. Dividends paid between Ethiopian resident companies are exempt.","rates":[{"rate":0.1,"type":"withholding","notes":"Standard withholding tax on dividends paid to individuals, both resident and non-resident."},{"rate":0,"type":"exempt","notes":"Dividends paid from one Ethiopian resident company to another resident company are exempt from withholding tax."}]}