Ethiopian Business Profit & Turnover Tax (TOT) Calculator 2026 (Proclamation 979/2016)
Calculate Ethiopian Business Profit Tax (Schedule C), 2% or 10% Turnover Tax (TOT), and 2% Withholding Tax under Federal Income Tax Proclamation No. 979/2016.
Ethiopia · Ethiopian Business Tax Calculator
Methodology
Under Ethiopian tax legislation (Federal Income Tax Proclamation No. 979/2016, Schedule C), business profit tax applies to commercial income derived by bodies (corporations, PLCs, share companies) and unincorporated sole proprietorships. Bodies are taxed at a flat rate of 30% on taxable net profit. Sole proprietorships and individual traders are taxed using progressive marginal tax brackets ranging from 0% (up to 7,200 ETB/year) to 35% (over 130,800 ETB/year). Businesses not registered for Value Added Tax (VAT) with annual turnover below the mandatory 2,000,000 ETB threshold are subject to Turnover Tax (TOT): 2% on the supply of goods and 10% on the rendering of services. In addition, commercial supply invoices exceeding 10,000 ETB are subject to a 2% advance withholding tax credited against final tax liability.
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User-provided inputs
This calculator uses only the values you enter. It does not automatically apply tax law, statutory deductions, lender fees, or live exchange rates.
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Formula basis
The formula is shown openly and no country rate is inserted automatically.
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Your estimate
AfricalHub is an independent private platform not affiliated with any government agency. Calculations are for educational planning only. Verify official filings with the relevant revenue authority or a qualified professional.
Schedule C: Sole Proprietorship Annual Tax Brackets
| Annual Taxable Profit (ETB) | Tax Rate (%) | Deduction Formula (ETB) |
|---|---|---|
| 0 – 7,200 ETB | 0% (Exempt) | 0.00 ETB |
| 7,201 – 19,800 ETB | 10% | (Profit × 10%) - 720 ETB |
| 19,801 – 38,400 ETB | 15% | (Profit × 15%) - 1,710 ETB |
| 38,401 – 63,000 ETB | 20% | (Profit × 20%) - 3,630 ETB |
| 63,001 – 93,600 ETB | 25% | (Profit × 25%) - 6,780 ETB |
| 93,601 – 130,800 ETB | 30% | (Profit × 30%) - 11,460 ETB |
| Over 130,800 ETB | 35% | (Profit × 35%) - 18,000 ETB |
| Corporations / PLCs | 30% (Flat Rate) | Taxable Net Profit × 30% |
Sources
User-provided inputs
This calculator uses only the values you enter. It does not automatically apply tax law, statutory deductions, lender fees, or live exchange rates.
Frequently asked questions
What are the business profit tax rates in Ethiopia?
Incorporated companies (PLC, Share Company) pay a flat 30% tax on net taxable profit. Unincorporated sole proprietorships pay progressive rates from 0% up to 35% across annual income brackets under Schedule C.
What is the Turnover Tax (TOT) rate in Ethiopia?
Turnover Tax applies to non-VAT registered businesses. The rate is 2% on the gross sales value of supplied goods, and 10% on the gross receipts from rendered services.
How are business categories (Category A, B, and C) defined in Ethiopia?
Under Proclamation 979/2016: Category A includes businesses with annual turnover of 2,000,000 ETB or more (and all incorporated bodies); Category B includes turnover between 1,000,000 and 2,000,000 ETB; Category C includes businesses with annual turnover below 1,000,000 ETB.
How does the 2% withholding tax work on business sales?
When a business supplies goods or services valued over 10,000 ETB to an authorized withholding agent (such as government offices, NGOs, or Category A companies), the buyer withholds 2% of the payment and remits it directly to the tax authority as a tax credit.