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← Taxation Fundamentals for Ethiopian Businesses: Tax Awareness and Compliance Essentials

Starting a Tax-Compliant Business

Module 02 / 6 · 60 min

Get a TIN, register and license the business, understand the tax duties that come with the license, including VAT registration and 3% withholding, and set up records that stand up to an audit.

In this module you will learn to

  • Explain when and how to obtain a TIN and why it comes first
  • Describe commercial registration, business forms and licensing under current law
  • Identify the tax obligations that start with a business license, including VAT registration under Directive No. 1104/2025
  • Apply the 3% withholding rules to supplier payments
  • Set up records and retention that meet the Tax Administration Proclamation

Built on

  • Erudite Africa training curriculum: Taxation Fundamentals for Ethiopian Businesses, Level 1 Beginner (October 2026)
  • Income Tax Proclamation No. 979/2016 as amended by Income Tax (Amendment) Proclamation No. 1395/2025: taxpayer categories, PAYE table, Category B gross sales tax, withholding, cash payment limit and repeal of the Turnover Tax Proclamation No. 308/2002 (rates as summarized by PwC, KPMG, EY and Grant Thornton Ethiopia)
  • VAT Proclamation No. 1341/2024, VAT Regulation No. 570/2025, VAT Registration Directive No. 1104/2025 and Electronic Invoicing System Administration Directive No. 1142/2026
  • Federal Tax Administration Proclamation No. 983/2016 as amended by Proclamation No. 1434/2026, and the Ministry of Revenues' penalty waiver Directive No. 189/2025
  • Private Organization Employees' Pension Proclamation No. 1268/2022 and Labour Proclamation No. 1156/2019
  • Commercial Registration and Business Licensing Proclamation No. 980/2016 as amended by No. 1150/2019, Commercial Code Proclamation No. 1243/2021 and Financial Reporting Proclamation No. 847/2014

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.