Ethiopia signed Double Taxation Agreements with four countries; China, India, Egypt and Sudan.
The agreements were presented to the House of Peoples’ Representatives for approval with the agreements expected to become active once they are ratified by the House.
The agreements will protect investors from double taxes on the same declared income thus enabling business from China, India Egypt and Sudan to pay income tax only once according to the Ministry of Finance and Economic Development.
The arrangement will not include other types of taxes including indirect taxes that may be levied other than the income tax explained a memo attached by MoFED to the bill.The agreements stipulate Ethiopia will share revenues from withholding taxes with the other partners as well as encouraging investment in sectors to be selected after negotiations by allowing tax holidays.
The agreements establish that taxes on fixed assets will be paid to the host country.
The deals, which incorporate unique elements for each country, assert that the relevant authorities will collaborate to exchange information about tax declarations from business taking advantage of the arrangements to avoid any attempts of tax evasion.
It is to be remembered that Ethiopia reached similar agreements with other countries in the past including the arrangement with the United Kingdom made last June.
Source: Capital
