Ethiopia Updates VAT Framework for Foreign Digital Services

Ethiopia Expands VAT to Foreign Digital Providers: Effective 17 March 2025, non-resident digital service providers and platforms must register, collect, and remit 15% VAT if annual sales exceed ETB 2 million (approx. USD 16,800).
Scope of Taxable Digital Services: VAT applies to a wide range of electronically delivered services including digital content, cloud computing, online advertising, and transactions facilitated by online marketplaces targeting Ethiopian consumers.
Place of Supply Rules Clarified: Draft regulations identify Ethiopia as the place of supply based on criteria like bank details, fixed-line usage, mobile phone country code, and IP address associated with the transaction.