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Ethiopia: standard rate: 15%
VAT Calculator calculates the VAT amount as well as the price with and without VAT. The VAT % is pre-filled, but you can change it or clear the value. The results are rounded to your desired precision. You can also make a currency conversion.
You can also choose the VAT% by clicking the percentages in the tables below.
Ethiopia | |
| standard rate | 15% Most taxable goods and services that are not zero-rated or exempt. The standard rate also applies to taxable imports, remote and digital services supplied to customers in Ethiopia, new residential premises and other taxable transactions not specifically relieved by law. Inbound tourism products and services facilitating inbound tourism are not treated as exports for zero-rating purposes. |
| zero rate | 0% Exports of goods and qualifying exports of services, including qualifying international transport services. Zero rating also applies to certain supplies connected with temporarily imported goods, qualifying transfers of a taxable business or part of a business as a going concern between registered persons, and supplies of gold to the National Bank of Ethiopia. The supplier retains the normal right to deduct input VAT attributable to zero-rated supplies. Inbound tourism products and the facilitation of inbound tourism are specifically excluded from the export-service zero rate. |
| exempt without deduction | Exempt supplies include qualifying sales and longer-term leases of residential premises, financial services, education and licensed child-care services, medical services and prescription medicines, public transport, specified religious services, certain medical equipment and mosquito nets, specified agricultural inputs and qualifying basic foodstuffs. Household electricity consumption of up to 200 kWh per month and household water consumption of up to 15 cubic metres per month, excluding bottled water, are also exempt. Input VAT attributable to exempt supplies is generally not deductible. |
| out of scope | Activities that do not constitute a taxable activity include work performed as an employee and an individual's hobby or recreational activity. A hobby or recreational activity carried on by another person essentially for the benefit of a member, owner or related person is also outside the taxable-activity rules. |
| reverse charge | A registered person, government entity or large unregistered person receiving a taxable service from a supplier outside Ethiopia that has no fixed place of business in Ethiopia generally accounts for Ethiopian VAT under the reverse-charge mechanism. The rule also applies in specified cases to services internally provided from the foreign part of a business to its Ethiopian part. There is no general domestic reverse charge. For qualifying B2C remote or digital services, the foreign supplier or electronic distribution platform instead registers and accounts for Ethiopian VAT when the registration rules are met. |
| VAT registration | Under the VAT Proclamation, compulsory registration is generally triggered when taxable supplies exceed ETB 2,000,000 during a twelve-month period or are reasonably expected to exceed that amount. Voluntary registration is generally available where annual taxable supplies exceed ETB 1,000,000. Directive No. 1104/2025 broadened compulsory registration: Category A taxpayers and taxpayers required to maintain, or voluntarily maintaining, formal books of account must register, and registration is also required where aggregate turnover from taxable and exempt transactions exceeds ETB 2,000,000. Certain professional service providers may therefore be required to register even where turnover is below the ordinary ETB 2,000,000 threshold. |
| Upcoming changes: | |
| 21 Aug 2027 | Under current legislation, the three-year transitional VAT regime allowing registered inbound tour operators to account for VAT on their net fee or commission expires. Ministry of Finance – VAT Proclamation No. 1341/2024, transitional provisions |
| Past changes: | |
| 3 Sep 2025 | VAT registration rules are broadened. Category A taxpayers and taxpayers required to maintain, or voluntarily maintaining, formal books of account must register. Taxpayers whose aggregate turnover from taxable and exempt supplies exceeds ETB 2 million are also required to register. Ministry of Finance – VAT Registration Directive No. 1104/2025 |
| 5 Sep 2024 | Household electricity consumption of up to 200 kWh per month and household water consumption of up to 15 cubic metres per month become VAT-exempt under a new directive. Bottled water is excluded from the exemption. Ministry of Finance – Directive No. 1021/2024 |
| 21 Aug 2024 | A new VAT Act replaces the 2002 legislation. The standard rate remains 15% and qualifying supplies continue to use the 0% rate, while the registration threshold is set at ETB 2 million. New rules cover remote digital services, electronically ordered goods and electronic distribution platforms. A three-year transitional net-basis VAT regime is introduced for registered inbound tour operators. Ministry of Finance – VAT Proclamation No. 1341/2024 |
Note! The VAT information on this page is general information, not tax advice. The information is not exhaustive. VAT rules include many exceptions and special cases. Check the treatment of your situation in the tax administration's guidelines. The information was checked on 22 Sep 2026.
VAT rounding: the EU, the UK and other European countries
The EU VAT Directive and the Court of Justice of the European Union leave VAT rounding rules to be decided at national level. National rules vary. In the UK, HMRC allows VAT on B2B invoices to be rounded down to the nearest whole penny.
Roundings in VAT calculation: Mathematically impossible prices?
There are a whole range of VAT-inclusive prices that cannot be mathematically arrived at if the tax is calculated from the VAT-free price. One example is 3.99. These prices are also possible, but then the VAT-free price must be interpreted as rounded.
VAT Gap - How much VAT is left uncollected in EU countries?
9.5% of VAT was left uncollected in EU countries. See the list of EU countries and candidate countries.
In Europe there is VAT - in the US sales tax
In Europe, companies belonging to the production chain account for the VAT paid by the consumer to the state in proportion to their value added. The US sales tax, on the other hand, is billed entirely by the company that made the consumer sale. Sales tax is paid to local operators, not to the state.
Many of today's taxes were already in use in Antiquity. Deciding on taxation has moved from autocrats to parliaments and the level of taxation has risen. In earlier times taxes were used to wage wars, today taxes are used to maintain welfare states.
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