Sole Proprietor (Individual Trader)Ethiopia
What it takes to form, own and run a sole trader in Ethiopia, and how its profit is taxed. Each figure links to the page it was read from.
This company type
At a glance
The registry’s and the law’s own pages do not mention it.
The registry’s and the law’s own pages do not mention it.
Form it
Who registers it
- Registry
- Ministry of Trade and Regional Integration (central commercial register; regional trade bureaus and the Ethiopian Investment Commission register and forward to it)
- Formed without visiting
- Not stated
The registry’s and the law’s own pages do not mention it.
- Formed online
- Not in our records
What it takes to form
Not in our records A notary, A resident director, Paying up the capital: none of these is in our records for the Sole Proprietor (Individual Trader).
Own it
Who may own and run it
- Directors
- Does not apply
- Shareholders
- Does not apply
- Members
- At least 1 · at most 1 · one person may form it alone
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Trade name of a sole proprietor shall include
- A local company secretary
- Does not apply
- A local registered agent
- Not stated
The registry’s and the law’s own pages do not mention it.
Each year, at the registry
Not in our records Annual registry fee, Accounts on the public record, Audit for a small company, Audit: none of these is in our records for the Sole Proprietor (Individual Trader).
Important dates
When each obligation falls due, as the authority states it.
Not in our records No dates for the Sole Proprietor (Individual Trader) are in our records.
What is public
Not in our records What the register shows the public is not in our records for the Sole Proprietor (Individual Trader).
Tax
Tax on profit
How this company type is taxed, which can differ from its place’s headline rate.
Varies · 0–35%
Individuals pay business income tax on bands from 0% up to 35% on annual taxable income over 130,800 (Proclamation 979/2016 art. 19(2)).
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በግለሰብ ላይ ተፈፃሚ የሚሆኑት የንግድ ሥራ ገቢ ግብር
- CFC rules in Ethiopia
- Not in our records
Close it
Closing it
The other end, which most guides leave out.
Not in our records Route, Statutory fee: none of these is in our records for the Sole Proprietor (Individual Trader).
Every business in Ethiopia
VAT
- Standard rate
- 15%
Value Added Tax Proclamation No. 1341/2024 (Federal Negarit Gazette No. 61, 21 August 2024), art. 8(2): 15 percent, with zero percent for zero-rated supplies. Read on the Ministry of Justice's law site (justice.gov.et), which lists the Proclamation as in force.
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b) in any other case 15 percent.
- Other rates
- 0% Zero-rated supplies
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a) for a taxable supply that is a Zero-rated supply, Zero percent, or
- Registration threshold
- ETB 2,000,000
total value of taxable supplies, or such other amount as the Ministry's directive sets (art. 12); 12 calendar months
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The registration threshold is 2,000,000 Birr or such other amount as specified in the Directive to be issued by the Ministry.
- A foreign company
- The same threshold applies
Art. 64 applies the art. 12 liability to register to a person carrying on a taxable activity outside Ethiopia with no fixed place of business there, so the threshold applies. It does not require a VAT representative as a rule: the Tax Authority may require security, and may require a VAT representative if the person then fails to comply, so representative_required and registers_from_first_supply stay open.
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the Tax Authority may require a person carrying on a taxable activity outside Ethiopia who is liable to be registered under Article 12 of this Proclamation but who does not have a fixed place of business in Ethiopia to lodge security
- Returns filed
- Monthly
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“Accounting Period” means each calendar month.
- Tax authority
- Ministry of Revenues, Federal Democratic Republic of Ethiopia
Payment and banking services
None of the services whose lists we hold names Ethiopia. Each provider, and what a listing means.
Reference
Its name and code
- Kind
- Sole traderDerived our grouping, the same words in every country
- Name in law
- Sole Proprietor (Individual Trader)
- Identifier
- ET-SOLE-PROPRIETORA form ISO 20275 does not list.