PAPERS ELEN APHOALL CTAAN 6.2.6-0 196bT 260 . FEDERAL NEGARIT GAZETTE OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA ie rors sour enc TE RAD NIN ht, TD PF HD I. MATERE SLEARAPHCNLR CTA PaUA tobe TE FHC Lt mIert Por * 234 Year, Nos? ADDIS ABABA,25 ®, August, 2017 on, PLLC PC Me LIN ATC GETRLD 9.7° reer rhc AT 5H name... PRCA PM “TIC 1K ABR 78 TAREE CONTENT * Council of Ministers Regulation No.410 /2017 of Ministers Federal Income eee PUAnTet Phe > RIN PC BELT AALLEA $7, 7G LON PEAS F 2h At FM WiC £0 PULDNCE PHC MY CHICKS LLENE APHEALE 2TANN ANAT AHAKE AMIS HOC AcomNt NOMD APE #TC BETTE NR GAG NLLCA FM, MIG APE AVC HAVENS ATOR AH NtAma- PAM coud? LU7 LN DowP shat DEA DIE mt £3.29 RdEC Con 20 LN PLAICE PHC Me PARA PIM FAG RN RPC OTE Pee Ath BEANS 2002 | Pate NIM AA TCT PoLsimar hav NAteC LY £90 wT: 7m 92 Unie Price COUNCIL OF MINISTERS REGULATION No.410/2017 COUNCIL OF MINISTERS REGULATION ON THE FEDERAL INCOME TAX This Regulation is issued by the Council of Ministers pursuant to Article 5 of the Definit Duties of the Executive Organs of the Federal Democratic Republic of Ethiopia Proclamation No.916/2015 and Article ‘99 of the Federal Income Tax Proclamation No.979/2016. ns of Powers and SECTION ONE GENERAL PROVISIONS 1. Short Title This Regulation may be. cited as the “Council of Ministers Federal Income Tax Regulation No.410/2017". 2. Definition Unless the context requires otherwise, in thisAPE” WAP PALGA PM. PC APE PC REDRAS rors “eigen NPE oA) ern, TNC NPE #PC RENRTOEW (AITAAGr)! COWL DEPT IM, TAC APE #TC UATE (NIREAIAD) AG PAE CPF MN, WMG APE ePC REV THRRS Oriettiting) rat UTEP AR PP FATT VETTE NILA NPR LP NALA KIN AVEC APE HTC HERS CANE Ord POOP LLMA = bea var MbTE Ter As ere HA7S veIF hnser” os MAPK 9077 NTHOM NFR Ambar NeMAT AEC Whe Are THIN w29 AnIAT PP PAULRT NRE AILOAL LMEA MeLyh ewe SCEY BLANPR NHR WEN) 9497 STOR har h BERE 99 042 o98P-E Aco@n? FILL far ORF TI Sia ho tePIC TCENT WIP wT ow NAN OPK HIER AE) Proahr? “TROP TASITCENY OLE -FEK 72G- POLENGO> Na h KEKE $9 POLAT PFL2> UL OPAL APOANTFEY her hor Prhior THOT TASITCENY ORI TER 76 ookowce Ptmthar har PhS@rar 77d NoOhisar 1h AL POPC hAd nani ken Veh mm orc KE HWM IW #7 RIP 27 Feder Nepait Gaccte No 82 a August ase. 17 “Proclamation” means the Federal Income Tax Proclamation No. 979/2016; 2/ “Repealed Proclamation” means the Income Tax Proclamation No.286/2002 (as amended), the Mining Income Tax Proclamation No.53/1993 (as amended) and the Petroleum Operations Income Tax Proclamation No. 296/1986 (as amended); 3/ terms and phrases used shall have the same meaning as in the Proclamation or the Federal Tax Administration Proclamation No.983/2016, as the ‘case may be. APPLICATION OF TERMS USED IN THE PROCLAMATION Interest ‘An amount, however described, paid by a saving and credit: assotiation as the retum on deposits with, or member's contributions to the association shall be treated as Proclamation. Permanent Establishment 1 In determining whether a person exceeds the 183- day period specified in Article 4{2)(c) of the Proclamation, account shall be taken of a connected priject of the person or of a related person. 2) When a person operates a. buil interest for the purposes of this ing site or conducts a project or activity referred to in Article 4@3) of the Proclamation, any connected activities conducted by a related person shall be added to the period of time during which the first- mentioned person has operated the building site ‘or conducted the project or activities for the purpose of determining whether the 183-day period is exceeded.me SINE cen 12g muck dre FHM UP +9 BIR 9.0 Fetal Neg Gecete No 02.25" Amp 2017....pooe panhe ves S. Nesident Individual grey nveR On NIKO HI20 NILhane | lf Sst tO subraticle (2) Of this Article, in USANA NIK HRs) AT NIE TAN AIRE OT APENFOR 457 NA: v) on MERE ema AS ati fom) ¢) arc Tar Tin DAAPRE ONT FFPN $7 NLA AidLoeA PV ARS LAMCAL A oTHa TAN Newt we AEA OMFS oP PETiNto FountAt 9) NiRaw le $9 ERI LAMEM (i) fave naa: (®) fALN? P59 RUC Led OC! ©) We AATPRE @nT PoLeHoror PE MME AF ALMENE NLLT fe Nt ATHY = RPCO HTT 2967 NLDA PAPC ULI DLT PES ONSET AE OIE PWISEE CreemaFar +571 @) WAND oTHarie 7d. howKows. Né.1+t Oe AL AEA ORT God hardh N24 OMAPRE ONT PANE Tor HER eet: $1) NIE TAA NAAPAS orca, Oh UA PEASE OSPF ehh INE TN Ph At wey MARE NT PUPLCID forh ORF Thea + HLH OIERS ONT NII ELI DEAMCR calculating the number of days an individual: is present in Ethiopia for the purposes of Article 5(2Xc) of the Proclamation: 8) a part of a day that an individual is present in Ethiopia (including the day of arrival in, and the day of departure from, Ethiopia) shall count as a whole day of such presence; b). the following days in which an individual is wholly or partly present in Ethiopia shall count as a whole day of such presence: (1) public holidays (2) aday of leave, including sick leave; (3) a day in which the individual's activity in Ethiopia is interrupted because of a strike, lock-out, delay in the receipt of supplies, adverse weather conditions, or seasonal factors; (4) days spent by the individual on holiday in Ethiopia before, during, or after any activity conducted by the individual in Ethiopia. 2/ A day or part of a day when an individual is in Ethiopia solely by reason of being in transit between two different places outside Ethiopia shall not count ‘as a day present in Ethiopia,wee * A fd 926% 2mm 476 HH VM TH 49 RIM 97 Federal Nezarit Guactic No 82, 25% August _2017....page 8° 5. AhAPeS AG MRF 6. Shares and Bonds A ONPR ATER (Rhy ANALAT ED AS ODA NLemAh) Pra Wow NAhieTt OL WRF AL PAF AAANASS Poous onl} OZ CRF Pooh TRI LAI CN: HP ONTeRES PA AD WATS GNP Lat PARAS? ott Oe MARY Lik WOE PO OR ATUEAE PTT PHT HAMPRS PEE NRATT MM LAME nea pit a “y" WD NEA AIS L9erk TEP 3. MEA wh) 70-0 NEA Ape 7-693 BI OLY REA arr U) “Purch! AMAR OPE" AMAT ome WOE OLE TFT Loar WAIL AbME WD Gar weer AAA D PALLASAM ager OPP hWEC tO ; ALPEN AIM web IAD PRA WEEP IN AR TBC NEDA ET OLF KA ALAN AIAIAT POLAT far ‘YOrt ch) nO PC MITT “PINE Kes! was aos TS “ B) ATL AI AUF PAIPAP the? Wh AVE AIF NEC AT MPAA. AS PAG PLAT FETT OAR ALC PCO MAMNT OC OARS OrT PPAd POTNRLE DAT mong) OLP / The reference to “shares and bonds” in Article $9(7)(c) of the Proclamation includes any interest in shares or bonds, such as, in the case of shares, a right or option to acquire shares. 2/ A gain arising on disposal of an interest in a share in, or bond issued by, a resident company shall be Ethiopian source income. SECTION THREE SCHEDULE ‘A’ INCOME SUB-SECTION ONE " FRINGE BEN! 7. Sub-Section ‘Section Three Definition 1/ In this Section: a) “employee share scheme” means an agreement or arrangement under which an employer company or a related company may allot shares to an employee of the employer company; b)“household personnel” means a housekeeper, cook, driver, gardener, assistant; ‘or other domestic ¢)'“market lending rate”, in relation to a month, means: » (1) for a commercial bank, the lending rate on loans and rediscount facilities granted by the National Bank of Ethiopia to commercial banks that prevailed in Ethiopia during the month; orNEE He 1B KAA THO hom Aut NPPRS BAP NO PPA Het oO PIPE THF CMRLE OAL aom,1 ‘tor! oo) “TFET! Phar AIS ME hI oC MISH heokeeear hae 26 TVR LAD OO PUT AA OIE 10 DW) ME OM IP Ty IP. hho PHT OYA AAA hie LEC C# P9475 PRE Os 2) NATE Int WNL comers AS THOU WIAIS EN LOPE! A) “rthche At HAS #F AAR AS DH Pile PALLPEY com NIRA UT PA WTC + ANCHE to 8/ NY TOD HRA wT: U) “OMe? heme 2C THE sro ho AG heMZo OLE hené@ 2¢ ‘THT ho Ao 26 NEReI OPM comet AIRE Powe? ONE OTF Leo A) heme" hteméo 2c TYE POOF Nor LOK CA: Sxaerh TOF PHY AR L421 NILEMNE UT AMPH NTR TR()(A) eT PS ATEN’ PLANT hiLy ASE Pte. TPF Paerd TPT Fo: U) NOR YK Po~eL 7 A) PRTAN NAMED Werth ah) Power Ahi 2) POST OAT NTCI BP) PPM OLI COMT AIA! & 42) for any othe: person, the lowest lending interest rate of commercial banks. that prevailed in Ethiopia during the month; 4) “related company”, in relation to a company, means another company that is a related person in respect of the first-mentioned company; ¢) “remote area” means a location that is thiny kilometres from an urllan centre with a population of twenty thousand; 1) “services” include the use of property and the making available of any facility; 8) “Vehicle” means a mofor vehicle designed to carry a load of less than one tonne and fewer than nine passengers. é 2/ In this Sub-section: a) a reference to an “employer” includes a related person of the employer and a third party acting under an arrangement with an employer or a related person of the employer; b) a reference to an “employee” includes a related person of the employee. nefits \/ For the purposes of Article 12(1(b) of the Proclamation and subject to this Article, benefits listed below which an employer provides to an employee are fringe benefits: a) debe waiver; b) household personnel; ©) housing; d) discounted interest loan; <¢) meal or refreshment;more €) PPA ODP FT! A) PHILT ORF NIA FFI Tl) PLE PANE? OF LI +) ertincnes 0) AA Pager THe: MIE beMs Ter STF ARV LD TH ATTHY Fomor om, FERC MI AVTH FRCID Fé Oo, AdhU'Y KEN AR Serr TIP neAmcr: UFer Ter rer TE ord AT Pagrh TEED FD hem = TRaeF AINEAAT ZI PMA 12M oOTe AT Tom MA At OLTHN ahaP hhosFte hh OWT nem: Vanek ofr ay LH AT oLnhAt TPP T AIR WIE THF ALAMET:- UV) APH wrom2te “v" oowet HAC 1% PERLT THF A) LAS NLLOMG cane? oer +e a) Prag Pe PLPC LITA het wrT NIM Frm rity hoor Prd Tk PHIPLL LAV AT ANNTARG PIP oeF PEF NEMO wOLF NEN AF NWARC Wwertt PM Athetes oer Perce S WEA PATI ARTE AcoLit WEARE TPP AF tite PLACA PINT Mt MATEY £471 ) NU PIPE eee howe hh AAU tems MR RL PLPC PILLS OL Forte? Mb AIA T- AREA IZED PUY $7C HNL TR OY RED 97 Fedral Nope Cann No. 82.25% August 2017...pe f) private expenditure; 8) property or service; hh) an employge share scheme; i) vehicle; J) residual fringe benefit. 2/ A benefit is not a fringe benefit to the extent that, if the employee had acquired the benefit, the expenditure incurred by the employee in scquiring the benefit would have been incurred in deriving employment income. 3/ In determining whether a benefit is a fringe benefit and the value of a fringe benefit, any restriction on transfer of the benefit and the fact that the benefit is not otherwise convertible to cash are to be disregarded. 4/ THe following benefits are not treated as fringe benefits for the purposes of the Proclamation or this Regulation: 8) @ benefit that is exempted income under ‘Schedule “E” of the Proclamation; b) a benefit the value of which, after taking into account the frequency with which the employer provides similar benefits, is so small as to mske accounting for it unreasonable or_-—administratively impracticable in accordance with the directive to be issued by the Minister; ©)__ subsidy to a meal or refreshment provided in a canteen, cafeteria, or dining room operated by, or on behalf of, an employer solely for the benefit of employees and thet is available to all non-casual employees on equal terms; 4) the provision of accommodation or housing. to a non-managerial employee in a remote area if:PRE AUT AT () Remém feed. Que PIP Ueto Oho =hAIe MF = @RAA Ns PeLeh hey OL Gh PRO Ne fT PR Mer ORF TES At Nese. Hit Ee ORF wtee Ab Le AnLAL hays! . 0) tee AMERY RENCH F>LECA PON ST DANI 4) lemco noch PReASTL NAN PEeeT To ar ene Atoms Fetig PrHe097 DAN PEPE ocr! A) ORMICKt! DAE Of PAT brut OAT AA TR PLAT trUCt Peta ATA ome arene Uke FPPC OL HAMS weer a) Aten. Ter FeLeCA trun TAP NIAMEY *) CARE ChROIEE AG PRIN MAID PULECh AF TAT AONE Ft PLEO FRING oomT MAMET! O) Atemert FLEA PLIA AND AG tee mag: &. DOA 18 fooney eoerh Toe H tems AME @nLA PAN? OR OE moh PLTCATY PME Wer $NL $6 WREY HOA 1A FoeReT PORrh TEP yor n mare Rn 20h a Oe #1 HOM I 67 STP 9 Federal Negert Gane Na 82.25% Aspet Pee (8) Prema a) Fd Oe KD (1) the employee's usual place — of ‘employment is in the remote area} and 2) it is necessary for the employer to provide the accommodation or housing to the employee in the remote area because the nature of the employer's business is such that the employee is likely to move frequently from one residential location to another or there is. insufficient accommodation available in.the remote suitable residential area; €) the provision of a mobile phone by an employer for use by an employee; f) the payment by an employer of the cost of mobile phone calls made by an employee, including with a mobile phone provided by the employer; 8) tuition fees paid by an employer for the benefit of an employee for attendance at a course offered by a university, college, or other institution providing adult education courses; bh) the provision of the services of a security guard for the benefit of an employee; '), the provision of food and beverage services by Hotels, Restaurants and other similar. establishments for their employees; 3) the provision of uniforms and related work materials. 9. Debt Waiver Fringe Benefit 1/ The waiver by an employer of the obligation of an ‘employee to pay or repay an amount owing to the employer is a debt waiver fringe benefit.IL. 2-90 oy aern hoe WR PomRL7 PaRYb TEP PD +6 PELL $4 com's ra? PLAN MAM WEEE caer TEP PD hEMéO ATIO; PAN MAT WereT DAT PMO Nos Adana mer PRTC MAT bMeO ANTI AIATO-TF Nhd.Aa ond oA Shar AR Th. Lavsese UP O27 PILE P9Lr) TEP RENE AbENE LLLICNOM PoOTEP? Nr PARTY TEP PIE ROLLE DLP Pose? Mk AANA FME AUT NOD PILE MOLI LOTEL Me Amat ems nae AG -teMEO ArILEe OLF FEL Wek MEAD com's oHHA Shar ARTE ta HME WhbMe POLLEN Pore? hi PIL TH PIT PONE MRT LaoTee Mk PMNLO- PrhERO AU FN2O Noe AILS ORF Noses Mek Nhd.NaK hek AT -b+Mo- AEE OLE PEE Mk Aho Pho oom'd ahha Shar APT Yor HK. £257) OAS NSC Poert Tor AL PMS ATEN. NAMO ALG Ag. -rencar PIUNAD MAS HMSO MRCP OAL om, PPI hr FPS OAL ALC Pagah Tee yor 8 P4857 WAS NEC P9e4) TEE PD -rENCO Noe ANE AL OAL Phen HUTT Noe Nhéno OAR AT ALS POAgar nme PNRES DAL oom, OT Feo NOs LHTA MiNéar WAR nA Pha AK yar: Lomt NAD PL THE PME AFM. PLPPCRO PPI WLI coMT ARGH Yh mum HC AEWA Ill +7 NLD 47 Federal Negarit Gazette No.82..25* August 2017, page... 04 inge benefit shall be the 10. Household Personnel Fringe Benefit The value of a household personnel fringe benefit for a month shall be the total employment income paid to the household personnel in that month for services rendered to the employee reduced by any payment made by the employee for such services. 11. Housing or Accommodation Fringe Benefit 1/ The value of a housing fringe benefit provided by an employer to an employee for a month when the employer owns the accommodation or housing shall be the fair market rent of the accommodation or housing for the month reduced by any payment made by the employee for the accommodation or housing, 21 The value of a housing fringe benefit provided by an Pa 13. employer to an employee for a month when the employer leases the accommodation or housing shall be the paid by the employer for the accommodation or housing during the month reduced rent by any payment made by the employee for the accommodation or housing. Discounted Interest Loan Fringe Benefit 1/ A loan provided by an employer to an employee is a discounted interest loan fringe benefit if the interest rate under the loan is less than the market lending rate, 2/ The value of a discounted interest loan fringe benefit for a month shall be the difference between the interest paid by the employee on the loan for the month, if any, and the interest that would have been paid by the employee on the loan for the month if the loan had been made at the market lending rate for that month, jeal or Refresh: Ly mn ‘The value of a meal or refreshment fringe benefit shallmane RIA PORTE TEP PI eNO PPI OEP fom? MATICK? AeTRLA “Lomo MPA OM, AT HONE APM WLP doomT DAT Ahaha PTH com't ohhA Phar Aer yar! “IAGATNCh. Pont pee B FOL Nom OLE NA MrEne PIA ver feneechoe = tTinche = PtThChe Pag Te Yor §) PLU ATER ON NER (Ut) AT) LIVE wiehone UTIROC PHNCKe razr PPP FD Uhr +00 woe? Fria PTH som’) LUSA:- Ux 5% . 12 AtLus:- “um f+ TInchco- An Aor foNdr wm oe +NZor ATNCACOD chek WUT! -HINChZor's Atrhernr wh PNdor PrTihCheo Thay PMe PO HS UTR -HinChéo neers enh We UT PM NID eriChZor Paget PEP Po -rihchéo heats Ahh WR AZLLI FC AtThCiéa- AX Lhd PMO 27S HHA com's Parade i ALY ATER WO ATER (B) owe) NUL AMar PPINCHS PILE TPP PD AL COLA . PHGT RRL IM UV) NETNCHED Acomoe OLF AtTnCKcO FH AT foomete oon, tor PEA00ar THO HELE A) temca- PCO aemnso> PNNCHCO-> PrmterN oem} . ch) NOG DAP -HiNCiéor Arenco 7A FPP PAPLANT oom’ ass sre 120% 2mm tre AN OL TD #7 RTL 977 Federal Negarit Gazene No. X2.25* Aupust_017_...page be the total cost to the employer of providing the meal or refreshment reduced by any amount paid by the employee for the meal or refreshment. 14, Vehicle Fringe Benefit V/A vehicle provided by an employer to an employee wholly or partly for the private use of the employee is a vehicle fringe benefit. 2/ Subject to sub-articles (3) and (4) of this Article, the value of a vehicle fringe benefit for a month shall be the amount calculated in accordance with the following formula: (Ax5%) 12 Where: “A” is the cost to the employer of acquiring the vehicle or, if the vehicle is leaged by the employer, the fair market value of the vehicle at the commencement of the lease. However, in case of a vehicle imported free of duty and taxes, the value of the vehicles’ fringe benefit shall include the duty ‘and taxes that would otherwise have been paid on the vehicle. 3/ From the value of a vehicle fringe benefit calculated under sub-article (2) of this Article the following shall be reduced: 'a) any payment made by the employee for the use «of the vehicle or for maintenance and running, costs; b the proportion of the use of the vehicle (if any) by the employee in the conduct of employment; ©) the proportion of the month (if any) that the vehicle was not provided to the employee for private use.OA PE NPD AIL AIOR MIO ATR (8) Fol wk RteAhbar FU" P2 MOY DER GY ore PLOAa THIN coms ¥ Noo (YA Naot) BUSA: G/ MLD AOR “Abend PIA PRO PecA winche— eeynae NINA heM co FAnChCOs NeTFo" Ah ATA PAR. ALMEPNIT AEENE PTA TEE eHCNT PiINChe Ranged 321A Om Pt coerk pee SI PLY ATER FOO NER (f) S597 WIEN USTAtEALO PTA “TER POLST NON FEN ONE ATA wo, FrHLA TH PIA MER, PALE Pee Yor: EIA MED, L9LTI TIP PI OLY NIK On NeeR (8) qourct IL TA Om, Pager PEP PLANE OMA, com> LUG EL LV NPR FONE Abene PLhEAO? Ay SD NR TE Wreolhr@ Adbec AiLy NEA MA AIR POLIT TEP to eraaD DEA, hfoopn yy: TLUMet Ose PNIATIrT Caer Ter BANE MPME PLPITNALO HL Ope reLeechar NIAID PNA oR PRIA PAL TY yor WLU NHR WA ADR (i) M27 NPE UF PINE OLE FMA PAR TEI UME Ek OFT MIATA NIRCORME bt ALINE PLLECH DU RINLET DLP PATE ction PD BH Noo ( a0 Arh) Net)! ogy years, the value of component “A” in the under sub-article (2) of this Article shall be the amount determined under sub-article (2). 5/ A reference in this Article to “a vehidl provided to an employee for private use” in vehicle that is made available to an empl Private use even if the employee did not act the vehicle for a private use at any time. 15. Privat itu Benefit 1/ Subject to sub-article (3) of this Article, the of expenditure by an employer is a expenditure fringe benefit to the extent | expenditure gives rise to a private benef employee. x The value of a private expenditure fringe shall be the amount of the expenditure trea private expenditure fringe benefit under su (1) of this Article. This Article shall not apply to expenditure pa employer that is a fringe benefit under Article in is section other than Article 18 Regulation, 16, Property or Services Fringe Benefit 17 The transfer of property or provision of sen an employer to an employee is a property or fringe benefit. 2/ Subject to sub-article (3) of this Article the A property or services fringe benefit shall be: a) if the employer supplies the propery or toscustomers in the ordinary course of bi 75% of the normal selling price of the p~ mem Aten yer mma onc TEU A) NAA URS PHL OLF PHATE com 72 BUSAN F/ Ailu ATOR FON TERR) ome PLO PML OLF PNA PaLrh PPP PD TONCH ANGE OLF ANIATICE AhzA@> PTH oom Le rhAt Ally AIER FO NFER EY) 9007 PNG OFF PNATI® PaRrh THE PAPC FEMTCH MAT Nehml He AL PIA FM FLhmo WR OL LIF PreZ PAPC TH Phe hut Pk footie, PD $Néar ANLe-w PAHS LF POLPANEAD SNF PD LSA Thtwert thine obs c9e%% Tee BM AMANAET Poy oft? OL PCT + foot PERAK ANATEF ee NWECEEE PARALD OPH oWLt Ab+ME AMP? COLALA PUEEPE PADLED OFF fagrh Ter wo 8 NWT PARED OF cowed atoms PLAT AAANAPD Poot oo OLF POR fo NR AR TH AREmcr OL hove 1.7 Mh. ONT ALTER IUTT v) PM hoot «oR NCO POUNEP Hr LU IER PLA LEGAL oer +o ks ORF FCO PLLUEAAE HUY ooh oe PCa APSA AT HC PAC AIUNLANE UA PETC PAPE NIK MW PERL LUTAH f/ eu POA AHR @ £72 MMe USE PUeNEF PAMAED OFF Pag TE PD AnAETF NERALANr +4 MNAFo tind} ene P2 AG tomsor AAHALTF Ahéha aePe ohhA Shor 4) ner $7 St 97 Federal News, No 12,.25% Augunt_201 ‘any other case, the cost to the employer of acquiring the property or services. ») 3/ The value of a property fringe benefit determined under sub-article (2) of this Anicle shall be reduced by any payment made by the employee for the «property or services. 4/ For the purposes of sub-article (2a) of this Article, if the property or services fringe benefit is the provision of free or subsidised air travel by an employer that is an airline operator, the normal selling price is the standard economy fare for the flight provided by the employer. 17. Employees’ Share Scheme Benefit 1/ The allotment of shares to an employee under an employee share scheme, including shares allotted as a result of the exercise of an option of right to acquire the shares, is an employee share scheme fringe benefit. 2/ The value of a right of option to acquire shares granted to an employee under an employee share scheme shall not be treated as a fringe benefit or otheriise included in employment income: 8) if the employee exercises the right o¢ option, this Article applies to; or b) if the employee disposes of the right or option, Article 59 of the Proclamation shall apply to the disposal on the basis that the right or option is a class *B? taxable asset. 3/ Subject sub-article (4) of this Article, the value of an employee share scheme fringe benefit shall be the fair market value of the shares at the date of allotment reducgd by the employees’ contribution for the shares.W Mer PE PAE? OFF eowLr ADEM FERAL DHAEST AAA ho PemPAn 288 CLF WT rbene PrWhe? Ors Teoet Lion: OAWAETED PN ArANe OFAN! one AARALTED MeL FAbAATAD DEAE Neko Uh NIL LA WH PLY AIK WN AIK @) L921 tL87, HLUIOY UL PAA Phat ems #2 AY ION NAR i) comet Purest OFS THe MITT Th LOAGA: WAMU AE 97 WEE TE PANE? OFF wed MPN, WhRARl NHAETE oC AFIT TEENS POM TAD bee: V) AAMLESEE AS A) TAAWLED Aer? atime ft one PCR CUNT AD CTA oon? Yo: 38.04 t9f9) To" RIAN faRtb Tee A ome atone PLLFCNOS OLY WEA AF NRF FAbeeh PARTY Te yo MPAA PRT POE 2 Tee PATIO UN out WILL? ALON? PPpo that FMS 72 AG TONE ATP Nom VHP WEE hha Shae ART ye TAME) TIP 46 rt PI aC 189 WM Poe8 ere ATCr ASE PEPE AL PLLA MPA TAC RTO Ld TOMO NOs, NLETIO: FLOW Mm, nee een oe TR IF Forierat_ Negerit Gesctts No. R225" August PGA 4 If shares allotted to an employee under an employee share scheme are subject to a restriction on the transfer of the shares, the employee is treated as having derived the employee share scheme benefic on the earlier of: 4) the time the emplogile is able to freely transfer the shares; or ») the time the employce disposes of the shares. 5/ When sub-article (4) of this Article applies, the fait market value of the shares is determined at the time the employee share scheme benefit is derived as determined under this sub-article (4). 6 In this Article, “employees’ contribution”, in relation to shares allotted to an employee under an employee share scheme, means the sum of the consideration, ifany, given by the employee: a) for the shares! and ‘b)for the grant of any right or option to acquire the shares. 18. Revidvel Frings Benefit V/ & benefit provided by an employer to an employee Not covered by another Article in this section is a ‘residual fringe benefit. : 2/ The value of a residual fringe benefit is the fair ‘market value of the benefit determined at the time it is provided, as reduced by any payment made by the ‘employes for the benefit i, 1/ Notwithstanding the provisions of this sub-section, the aggregate tax liability on fringe benefits shall under any circumstance not exceed 10% of the salaryWiehe kek 16h my dere HN. (Ad Nort) oonAt PAL BANU AIR ALAR RMN HEPC IC PPS Lik hhh PEIPEOT b Lec! fee: }. Nome VIC how>mG °°47°5 mM, A PAPR AGERE NG) ONDPAL ONT YPC FAUT PME NAITAL OAT Aktorar MOLT PWG SCE Phbnd har AgoarC MaPKE wdT PE AAW dar atone | PAAR! PL AL PAM BUSA: | RONIERE PE PUD ENE NTO OC NO VIC NeroMC m0, $7 AT MLV 70, Ag. Noay UIC PAC Rhea WILEY -FEMLOW DUN NLL M@ 2G AA NU oom LINC MAA PTT: colt LPLPA- D) OY UIC Phé.ha TAC! Og A) NATERE IPL PUTO beNe PO VIC 1, ATID OC 14.877, NLU IO» hove F2.7F M. PAC PTIANLL ATH ooMy gourd NRL PRMD boMeO NAY VIC a AL MATER OAT POYATAD 7H EF MLU AIR Aber LO PINE SMT AéRRI” PII pede TC NA PbMtha “heeemc 017s MN, PIC NFA “PIG Foo} MIA PEMEO “AMC NILELSIATA Novae PhPR AHR FAL) AT (H) PERL LUGO m, W ALY ATER AsRRI:- V) ARAPRE VPS PUT bbNe? NeLeoAn “heoemc NUTT MM. AK TAC PMDNLS ATE OM,” IAT TROP PIC eta bear haveer hd? foc nc FERTIL AF Federal Negan 20. 9458 ate No. 82.28" Ay 1, pase income of the emplo. 2/For the purpose of this Article “salary” doesn’t include other employment related benefits. SUB-SECTION TWO FOREIGN EMPLOYMENT INCOME, Foreign Employment Income V/ Article 93(1) of the Proclamation shall apply to a resident employee employed by a non-resident employer otherwise than as an employee of an Ethiopian permanent establishment of the none resident. If a resident employee has derived foreign employment income for a calendar month on which the employee has paid foreign income tax, the employee shall be allowed a tax credit of an amount equal to the lesser oft a) bythe employment income tax payable in respect of the foreign income tax paid; or the foreign employment income calculated by applying the average rate of employment income tax applicable to the resident employee to the foreign employment income of the employee for the month, 3/ Article 45(3), (4), and (5) of the Proclamation shall apply for the purposes of the tax credit allowed under this Article on the basis that the reference to “business income tax” is a reference to “employment income tax” and the reference to “tax year” is a reference to the “calendar month”. 4/ In this Article: a) “average rate of employment income tax”, in relation to a resident employee for a calendar month, means the percentage that the employment income tax payable by thewars i Ase y2ch suey arc HWM Tih +7 RT 9.77 Federal Negarit Guzen No.82,.25% August ,2017..-page NEAR hovtmC NLT TM AL AKA PI heetmc FLTH MM PAC omfy ort A) NOE VIC heodmc F717) mM" MIA) NAP wrimic “UY owe MC PUNLANE Pore VIC IM. Ori th) POE VIC MN PCY HAT ADs FeO rrr MC NM UI over oe Noe vIC NSE osIe PEMA HIG ALU GT tals TCH Oger LuTT MC NELPANT FLNLA DALY ALGPCT PS PONG TAh DATERE VPS CUT toMy HEA beh rursme't “A" 10, RENAIS Foor Ne POLE? thee nee PAPE ADR TRE) PAR CMU INE AhE-L ORF thee nee ANTE Gooh Ae PTC PRD ek TL PPM AIRUI! Ahe-k OL Fthek Ane Mily 3Lrr Ptendar MPA PLE EL M, com3! INar> NereNAne PMC 400} NILETE FCY LAMEAL USP MLV FM cM AL PLNLAD- PAC PA ALL MO ALAC PING Foor} NeTHAEA ena . BE. 77S re VOT hee PYIE Pde COLNE FING KIA PUY OF PTT PSPTY AT EE MPO RVIS et . nomen PLP mM, MAP urimetc “ah ower MC Lear a ‘ermployee for the month, before the allowance of any tax credit, is of the total employment income of the employee for the month; b) “foreign employment income” means foreign income that is taxable under Schedule “A” of the Proclamation; ©) “foreign income tax” means income tax, including withholding tax, imposed by the government of a foreign country or a political subdivision of @ government of a foreign country, but does not include a penalty, additional tax, or interest payable in respect of such tax; a 4) “resident employee” means an employee who isa resident of Ethiopia, SECTION FOUR ‘SCHEDULE ‘B* INCOME 21,Rental Payment Covering More Than One Year If a lessor or sub-lessor to, whom Article 15(5) of the Proclamation applies receives an amount of rental income for a period in excess of one year, the total amount of rental income received shall be treated as having been derived in the tax year in which it was received but the tax payable on the amount shall be calculated by prorating the rental income over the number of tax years to which the payment relates. 22, Lease of Business Assets Income derived from the lease of a business, including g00ds, equipment, and buildings that are part of the normal operation of a business, shall be taxable under ‘Schedule ‘C” of the Proclamation.m~ heoeE ee ANPR NHR TE(E(ch) FAV NAT FMC oor AGL MEE ALE OFF onde Ptdta- PACES P97 PeLMhar MAPE AIK AE AT OLY SWRA AP FON REA WM core UT PRP corer NILLI LEGA: RPGR Mk PI PLE UA UT AML HCE PFE NMS PELLI ort Wt 2C erhee THOR et OF AT Ie? PIOr PLENUM OO: #8. Ph? Nee newt RPA oO PLL MIC EL MAI PPNC Gao AMPH ATER 5(E)(ch) wre PPLELAT PEST OD, NPC Sook Mr PP AL Mo PeMMAT hr NAS PLPFO PTH oom NPC orb NIRLLA PRT DEP WAG LAME? WOAPE APR RE AT tly LIN AIR Ne" NLA Phobia “ALE NER hte” NIRLLIAIA NorarAL AitLUY ADR FO he® WM ALLAN PIC NEL 14.597. RSA SEDOT VIC CAF hee C475 7 BI OKATHE IPS PUY MIC NER PO VIC PI-HSL WL LA AT NLU M. AL Noa WIG" AC PhLA RUT hee heh hee 2C AeA NUT sent PINE Th PTTID cont LELPA:- U) OP UIC Phat WC wee" ANTNC HAE FEMA POA UIC PRE Nee M. ATI FANG For® 14K NLU ar Equipmer i . For the purposes of Article 15(7\0) of Proclamation, the deduction allowed for a tak year { depreciation of a rental building, furniture, a equipment shall be determined in accordance wi Article 25 of the Proclamation’and Sub-seotion 1) of Section Five of this Regulation on the basis that: 1/ the rental building is a depreciable asset being structural improvement to immovable. proper and 2/ any furniture and equipment leased with { building are depreciable assets. 24, Rental Income Losses “tf the total rental income for a tax year of a taxpa keeping records is exceeded by the deduct allowed to the taxpayer under Article 15(7Xe) of Proclamation for the tax year, the amount of | ‘excess shall be treated as a rental loss for the year. 2 Article 26 of the Proclamation and Article 42 of t Regulation shall apply to a taxpayer who has a ret loss on the basis that the reference in those Arti to a “loss” is a reference to a “rental loss”. 25. Foreign Rental Income 1/ Ifa resident taxpayer has foreign rental income f tax year on which the taxpayer has paid fore income tax, the taxpayer shall be allowed a credit of an amount equal to the lesser of: a) the foreign income tax paid; or ‘b) the rental income tax payable in respect of foreign rental income of the taxpamara MF HER NLP ML AL WMC Pen? ATH MEF cL NIL FLOOD TAC HER Norte VIC PLT HE Mor Ag DATRRE OAT PLATA PCH Atom 12% pam +r HE WA IU 47 AT AI Feseral Negait Gazene No. 82, 25% August 2017 MLD ATER AbLLO PPA “THAT LKR PHIE Poe M. PC NLA P-hmehar “Hh nee PLT mM PACT IROLEIATA Aovarhe PAPH ATOR FEE)@) AT (B) PERM, LEG £/ AILU AER Ad907:- V)ANIE PTAC For PhITKE YET OCA “hhh ek NORTE 1. AB PC PPANLS ATH OME TAT TIE PING HAA hewk27 Ne NING Fork PLO PAC NUATAN HAE HEL PORTS MAL ALLA PMO MV bok 1M. INC OOF Ot A) Parse UIC mM, PAC" TAY AER FOG PASH TC APC OF UTC are OL NOP UIC PhAA Pet PEMA TIC ATT FNP TEA MC? ORF LvTr IC ALAN PLLA ONE ALGATCH! hy NO- VIC DA HEL PUTS Mt IAT NPR womcir “A owe TC PUNLANY POT VIC TN WO! MAI PMC Sov PATPRE PE TIC DEL NLowAh “PME Pont VIC PLE RGR M! MP PC HER NVC door NTio- MPAA PO VIC PRI NEL mM AR MOD hTTH 2c NTT APH ATR TER) cower Pbb.bR OST OAPF here 1A PPO M, ro a2 cakalal iy applyngy a verg Tana rental income tax applicable to the taxpayer to the net foreign rental income of the taxpayer for the tax year, 2 Article 45(3), (4), and (5) of the Proclamation shall apply for the purposes of the tax credit allowed under this Article on the basis that the reference to “business income tax” is a reference to “rental income tax”. 3/ In this Article: a) “average rate of rental income tax”,in relation to a resident of Ethiopia for a tax year, means the percentage that the rental income tax payable by the resident for the year, before the allowance of any tax credit, is of the taxable rental income of the resident for the year; ) “foreign income tax” means income tax, including withholding tax, imposed by the government of a foreign country or a politica subdivision of a government of a foreign country, but does not include a penalty, additional tax, or interest payable in,respect of such ©) “foreign rental income” means foreign income taxable under Schedule ‘B’; and 4) “net foreign rental income”, in relation to 9 resident taxpayer for a tax year, means the total foreign rental income of the taxpayer for the year reduced by the deductions allowed under Article 15(7) of the Proclamation that relate to the derivation of that income,WGI anon 120 b LUNEL AAD A+? NAM sw ANPR NIK THB) ALIOP PAAD AT THF OMEH) OLE Wk ohErht FMak! ah THSO MEMIte OFT At MEhEe hunk “NtReo ANIL OC UL OAT LSA: nea Aen rye “ch” 2D DEA 1S tomes FOhHAS oc OPE NOR FAG)(+) 9977 “oHAT om,” WY PTC MR wer CITE MoO? AMINPOR AT AIMRT NIVATD MTR yee FO OD, AMAA PLLOMD For TIA OD, 10> ot PrheA wae FURL NPR NIK RER)(U)(R) owe Amar UIC MAC PtheA OnE TEST ALL? PLEAD MALO AEC Aootms HATERE Ade AH AP STMT Me Hh PALO ANAHAMY Ween AF ops: AWebhe FALL CURS wm, NWETET PMT OPK cowed $Me WEEN. Dr PUNE FOF RI ALO APC AWE-Hor fuRrS AIA PFONM am, NATH NPR REA(U) OZ FEST LLLIAFAT tr?- % _— PeLgecit £7705 foot NATO BET LAR EE OF PPT NAT PLLC AME RPE AUPE Ton POLLEN PPING Foot NATE OM, | QNPR NIK REE)M(V) rALT PETA BRL Ai $7C AFM 10-47 HIG 9. Federal Neparit Gazeto No. 82, 26. Notification of Rental of New Building For the purpose of Article 17(1) of the Proclamation, the period of notification of the completion or rental of new building shall be within one month of the earlier of the completion or rental of such building. SECTION FIVE SCHEDULE ‘© INCOME SUB-SECTION DEDUCTIONS. 27. Representation Expenditures For the purposes of Article 27(1)Xi) of the Proclamation, “representation expenditures” shall mean hospitality expenditures incurred by an employee in receiving guests from outside the business for the purposes of promoting and enhancing the business. 28. Deductibility of Interest Paid to a Foreign Lender Interest paid to a foreign lender referred to in Article 23(2X{a)(2) of the Proclamation shall be deductible only if the borrower has provided the Authority with a copy of the letter of authorization 10 provide loan issued by the National Bank of Ethiopia to the foreigner lender. 29. Employees’ Medical expense incurred by an employer for his employee including premium payments made under employees’ health insurance scheme shall be deducted in accordance with Article 22(1)a) of the Proclamation. 30.Food and Beverage Services Provided by ‘Establishments Engaged in the Provision of Food and ‘Beverage Services 1/ Expenditure incurred in the provision of food and beverage services by Hotels, Restaurants or other similar establishments for their employees shall be deducted in accordance with Article 22(1}{a) of the Proclamation.wmsese 68 ~ Laem 12h 24m 47C HL UL IB 49 HTB 997 Federal Negarit Gazette No.2,25% August 2017...pege aly NOR ID NOR) ower Feat 2 The limit to the deduction allowed pursuant to sub- article (1) of this Article shall be determined by a PILLID OM, BM Bide NVLLOMO directive to be issued by the Minister. eave? RONTA 5 1. Business Promotion Expenditure PINE Me Msote OD, NPE NDER HEB) “UT soured: Pores arIc| THE limit to the deduction of business promotion expenses incurred locally or abroad pursuant to Article 22(1Xa) of the Proclamation shall be determined by a directive to be issued by the Minister. DAP OL Not RIC PERLI RIVE Me sore om, Pres eM TMNT | + ALLOA cesEr LONG PR. LANE Os PIIE ee UAT ety Wer, 32. A Lessee Maintaining or Repairing or Improving POLLEN! LIMTF OLF FUSATA then a Business Asstt at his own Expense DAhER 2G HM @A am aM Lom Expenditure incurred by a lessee of his own volition at CHRO? TIE. He ONT Ache, 0ca, variance with the terms of the contract concluded with the lessor in the maintenance or repair or improvement of the leased business asset shall be deducted from the business income of the lessee. PeLPLAE KLMTE OL RLSATA thee AORAKE ATIGO OL ATHIL FRLIG wor, NII Me Ma ALK PEST BLLTARAY OE. Eee 907 conse Ams 38, Chine PenaGen, A/ONPH AIR FH) AN? ARC FF \/ A deduction allowed under Article 24(1) of the ALLE AOFPT POO Pom, best Proclamation for charitable donations shall apply to TNC NER Gtr ATLPHYZOr PNY ATT expenses incurred by the tax payer in the ENG A LLOne om EPC TERT management of his own charitable activities. 205A R/AAPH AMPK FABYA) ABRAM Noor 2/ For the purpose of Article 24(1) (b) of the PPL TC Wh NELGA OL NAA Proclamation, call by the government means call by mV PLLI PE AUF AAD AND AT the federal government or a regional state and ALLAP ohh? ANPARC PERL TE includes a call by the Addis Ababa and Dire dawa parent city administrations, F/ ALU NIER OD ATER (B) ALAR “NY 3/ For the purpose of sub-article (1) of this Article ARE MCT OWA DENA bhe WEEE “charitable donation” means a donation made in OF Me LPR pap pbruct! support of education, health, environmental RRSIMEAM TAP DEE. nA.0aGe NCAY protection or provided in the form of humanitarian ae aid other than for the tax payer’s own employees. BD. ESA OF PF NEL OA coher Hrsn 34. Deduction allowed for Business Asset held L99E 2% UAE PULES +OGT > under Capital Goods Lease Agreement RA MTPA FPF SR OA ahah Abst 1/ Lease payment made for business asset held underUSIRE geen 20h 2am onc Ht Wh PIR ME UNE PLLA PHLR WEP HMPAA PITH AE IM, AK POSH LRLIAH WOU APR WOH ATER (B) cowed POST Prete ho NINE AL FACES #97) ALA OMAT I R. £95 copes fh wen OLIPAE PS FAUT ECE OAPKS OT Oe Amlwe LCR Te Peetd Thay OM, Ath? MAAS OdT ARLTY Pwo LCRL PLR WEE resi PFLLIO! OO PITS He ML ATTHI AIT He POET hohmh OLF PIIS PEO NVM PELLI AIL 0 . 22h nea var fACES $671 i, 22F oO $Ld I VAEF AG MET VAPE LATO (Ie ee Une E PACES 257) BRU NR WA AWE (&) £900 AIIM UT! THOR IG Noe! V)NGLGIN ETCH NEELN RLAPF cower PIN 67Cr ASIDE AI 4erb PACES 257 NR Phmboo HUY AS A) NMR AMF POTO Pe VAFT Ute AIL BBirl PACES PST Hee Prmeoe tury OAPR AIK RHR) cowrch keTZsRATD PACES F957 tly L4n AER ae Menno $74 PACKS P67 HE OLE OLY LM ATR AE MtoAnta P20 APH PLS PACES F471 He. cower AON RRA TLR 9.7 Federal Negarit Gare No.82, 25% Aupust 201 wes ‘capital goods Tease agreement aaoaiae aes expenditure ftom gross business income, 21 A person realizing deduction under sub-article (1) of this Article shall not be entitled to depreciation on the asset. 35. Head Office Expense Payment made by a permanent establishment doing business in Ethiopia to its parent non-resident body in reimbursement of actual expenses incurred by the parent non-resident body for the benefit of the permanent establishment shall be deducted to the extent that such expense was incurred in deriving, securing or ‘maintaining business income. SUB-SECTION TWO. DEPRECIATION DEDUCTION 36. Depreciation Deduction of Depreciable Assets and Business Intangibles 1/ Subject to sub-article (2) of this Article, a taxpayer may determine the depreciation deduction allowed under Article 25(1) of the Proclamation according to the straight-line method under Article 37 of this Regulation or the diminishing value method under Article 38 of this Regulation provided: ) the taxpayer has used the same method of depreciation in its financial accounts prepared in accordance with financial reporting standards; and ) the same method of depreciation is used by the taxpayer for all depreciable assets owned by the taxpayer.mars Agee Yr gum src WE WNL TR 47 RIL 9.97 Feseral Negarit Ganene No. 82, 23% August 2017 PUNTA UNET PACES Pa Pl SO AT PACES FST MP AF LUG V) MH4L VARY PANTO FIZ Pe UNE A) DUR EAEA UNI AB PONLLD eT e: Fi neveragh uM Ag eonee? omntie PACES P57 AAA NeTEHPAPH UAT AL ronse7 We ac Miho Lent endl Mo, mee PANT 8 TRO INC NAR “AbEANL" “bdr none TVET PAD Ade ATIO“ AT DATA oo-A PACES #971 ATING P20r PLEIN UN OLS ML VAPI Pinar PII sé UI PACES F971 THY ALTAR ULTHE VACES PGT We B/PNPH NWR KEL) ATO) IMME Ur! ARIZ TC NER ONL CPC 400} P2a> ALPINA UN OL THE VAPH Ada PPI PG UN PELL TEE PACES PSTN, come PRON PACES F571 ALY SN NR A Photo? oom, ute DA, AL PER, NIL VAD! SU AMR TA ALUINTO PESO PING Fou} AT PARoo} PMC Food} wir ANI MIG N42 P20- PALIN UN OFT THOR VAP PhA@ CHIE de Ua PrLPR OL APH NHK BEG) LIT MRSC FO Lbe PML MPAA “+447 won, hut @an, AMAT AEN: BE. PIO AP+in PULL PACES 2671 HR 8) NPR NER REE) AG (B) AIREMNE VI@-+ ARIS “HIG NER NAIL PPC Gon P20 pase. 966 be depreciated o 2/ The following assets under the straight-line method: a) a business intangible; b) a structural property; improvement of immoval 3/ For the purposes of calculating the deprecial deduction in relation to a structural improvern of immovable property, the cost of the structu improvement shall not include the cost of land on which the improvement is situated. 4l- No depreciation deduction shall be allowed the cost of a depreciable asset or busin intangible acquired by a taxpayer from a rel person (“transferor”) when the cost of the as or intangible had been fully depreciated by transferor. 37. Straight-line Depreciation 1/ Subject to Article 25(3) and (4) of the Proclamati the depreciation deduction allowed to a taxpayer fo tax year in respect of a depreciable asset or busin intangible under the straight-line method shall calculated by applying the rate specified in Article of this Regulation against the cost of the asset. 2/ The total deductions allowed, or that would allowed but for Article 25(4) of the Proclamation, t ‘taxpayer in respect of a depreciable asset or busin intangible to which this Article applies for the cur tax year and all previous tax years shall not exceed cost of the asset. 38. Diminishing Value Depreciation Deduction 1/ Subject to Article 25(3) and (4) of the ProclamatPASSE aren 20h um orc 1 WA AMP UN Pret P20 APS NULL PACES FEN HE wwe FOF PACES «F61 ty LIN NR OP Praha) om, Mork ookooce Aho PUNE FEM POON PI AL TER, NIRLT LAA #/ ONE LINC 90} PAPH NIK KEG) £791 PIG NLPIN UT AL TER NUE PUAE PENG POW PD UAE NING Govk PF7E: Pe MI ATTY AF TEP Ag NILE Novas 2th B PTC HER Prar PLEIN UNE $2 P2 HAC wat Hv PoTLMAT hwy AAI AL Nor RRMA CES $6 com's BPI NRE UM AL “PERL PL PACES P67 oom, NLA PLOF AG hiLu OFF Aw wimete cower 4907, LPLONI £7 FAB 9 Feder Nepwrit Gazal No. 82, 25% Avgust_2017...page 9869 the depr deduction allowed to a taxpayer for 4 tax year in respect of a depreciable asset under the diminishing value method shall be calculated by applying the rate specified in Article 39 of this Regulation against the net book value of the asset at the beginning of the year. 2/ If Article 25(4) of the Proclamation applies to a depreciable asset for a tax year, the net book value of the asset shall be calculated on the basis that the asset hhas been used in that year solely to derive business income. 3/ Ifthe balance of a depreciable asset of the taxpayer is not more than two thousand Birr, the amount shall be fully deducted in the tax year to which the balance corresponds. 39. Rates of Depreciation Deduction 1/ The rates of depreciation applicable to a depreciable asset are specified in the following table based on the following categories: