Dispute Resolution Court Litigation
• Stamp duty is charged on instruments of incorporation defined by certain regulations. The instruments of incorporation include memorandum and articles of association of business organizations, contracts, security deeds, powers of attorney, documents of title to property. The rate is computed depending on the type of instrument, either on flat rate basis or according to value on a percentage basis. • The major direct and indirect taxes applicable to businesses are the following: • Indirect Taxes include a turnover tax, an excise tax, a value added tax, and a customs duty. Stamp duty is charged on instruments of incorporation defined by certain regulations. The instruments of incorporation include memorandum and articles of association of business organizations, contracts, security deeds, powers of attorney, documents of title to property. The rate is computed depending on the type of instrument, either on flat rate basis or according to value on a percentage basis. • The major direct and indirect taxes applicable to businesses are the following: Principal taxes currently in force Type of tax Rate Corporate income tax 30%
Commercial disputes are dealt with through the courts system. Based on the monetary value of a case any commercial dispute is settled through the Court of First Instance, the High Court or the Supreme Court (which both deal with appeals from the lower courts). In general, the parties are free to choose the law and jurisdiction which governs disputes arising under their contracts. However, certain issues are strictly within the jurisdiction of the Ethiopian courts, for example issues of a public law nature like tax, administration and criminal matters. Arbitration Ethiopia is not a party to the NewYork Convention, and so the enforcement of foreign arbitration awards is likely to be more challenging in this jurisdiction. Alternative Dispute Resolution is common however. Parties are free to submit their disputes to a body established, financed, regulated and entirely sanctioned by the State. Currently, the Addis Ababa Chamber of Commerce and Sectoral Associations Arbitration Institute ( AACCSA AI ) is the only mandated commercial disputes settlement body in Ethiopia. The AACCSA AI arbitration rules are consistent with the mandatory provisions of the national codes. These rules draw on the rules of other commercial arbitration institutions as well as the United Nations Commission on International Trade Law ( UNCITRAL ) Model Law.
Custom duties
0% up to 35%
Dividend tax
10%
Excise tax
10% up to 100%
Export tax
None
Income tax from employment
0% up to 35%
Royalty tax
5%
Turn over tax
2% and 10%
Value added tax
15%
Withholding tax
2%
Capital gains tax
15% for buildings held for business, factory, office 30% for the transfer of shares of companies
Income from receiving of a technical service from abroad 4
10%
4 Article 32 of the Income Tax Proclamation No. 286/2002
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