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← Taxation Fundamentals for Ethiopian Businesses: Business Tax Management

Business Income Tax

Module 01 / 6 · 65 min · Free preview

Classify taxpayers under the 2025 rules, compute taxable business income from the books, apply depreciation, the minimum alternative tax and advance tax, and file on time.

In this module you will learn to

  • Explain the Category A and B taxpayer structure after Proclamation No. 1395/2025 and how it differs from the four income schedules
  • Determine taxable business income from accounting profit with the correct add-backs and deductions
  • Separate allowable from non-allowable expenses, including the ETB 50,000 cash payment rule
  • Compute tax depreciation at the regulation rates and apply the minimum alternative tax test
  • Prepare the annual return balance and plan quarterly advance tax

Built on

  • Erudite Africa training curriculum: Taxation Fundamentals for Ethiopian Businesses, Level 2 Intermediate, Business Tax Management (October 2026)
  • Federal Income Tax Proclamation No. 979/2016 as amended by Income Tax (Amendment) Proclamation No. 1395/2025, and Council of Ministers Income Tax Regulation No. 410/2017 as amended; article references for No. 1395/2025 per KPMG, EY, PwC and Grant Thornton summaries
  • Value Added Tax Proclamation No. 1341/2024, VAT Regulation No. 570/2025, VAT Registration Directive No. 1104/2025, Directive No. 1021/2024 and Electronic Invoicing System Administration Directive No. 1142/2026
  • Federal Tax Administration Proclamation No. 983/2016 as amended by Tax Administration (Amendment) Proclamation No. 1434/2026, and Penalty Waiver Directive No. 189/2025
  • Financial Reporting Proclamation No. 847/2014, Private Organization Employees' Pension Proclamation No. 1268/2022 and Investment Incentive Regulation No. 586/2026

Examples and companies are fictional. Tax rates and rules are shown as they stood when the course was written; always check the current proclamations, directives and guidance from the Ministry of Revenues before filing, and take professional advice for your own case.