On 17 September 2011, an income tax treaty was signed between Egypt and Ethiopia. The treaty is the first of its kind between the two countries.
The treaty covers Egyptian tax on individual income and profits of legal entities, and Ethiopian general tax on income and profit, and tax on income from mining, petroleum and agricultural activities.
The treaty includes provisions that a permanent establishment will be deemed constituted if an enterprise of one State furnishes services in the other State through employees or other personnel for a period or periods aggregating more than 12 months.
Both countries apply the credit method for the elimination of double taxation.
The treaty includes a limitation on benefits provision whereby the benefits of the treaty will not apply if the main purpose or one of the main purposes of a resident or any connected person is to take advantage of the treaty.
The treaty will enter into force once the ratification instruments are exchanged, and will apply for Egypt from 1 January of the year following its entry into force and for Ethiopia from 8 July of the year following its entry into force.
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