The Comprehensive Double Taxation Convention between the UK and Ethiopia entered into force as of 21 February 2013. The treaty was signed on 9 June 2011. The convention generally follows the OECD Model Tax Convention.
According to the provisions of the treaty the maximum withholding tax on dividends is 10%, or where the dividend is paid property income by certain investment vehicles the maximum rate is 15%. The withholding tax rate on interest is 5% and on royalties 7.5%.
In Ethiopia the treaty is effective from 1 March 2013 for withholding taxes and from 8 July 2013 for income taxes.
In the United Kingdom the treaty is effective from 1 March 2013 for withholding taxes, from 1 April 2013 for corporation tax and from 6 April 2013 for income and capital gains taxes.
