Ethiopia Introduces 15% VAT on Cross-Border Digital Services with New Proclamation

• Ethiopia introduces new VAT rules for taxing digital services from nonresident businesses
• A 15 percent VAT will apply to cross-border digital services for Ethiopian residents
• VAT applies to services performed in Ethiopia even without a permanent establishment
• Criteria for identifying Ethiopian residents and platform rules are clarified
• Nonresident providers must register for VAT if annual sales exceed 2 million birr
• A penalty of 100,000 birr is imposed for non-compliance
• The new proclamation repeals the previous VAT law from 2002
• These changes aim to modernize Ethiopia’s VAT system in line with global digital taxation trends

Source: globalvatcompliance.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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