Ethiopia introduces new tax rules for digital content creators

Ethiopia has introduced new income tax rules requiring digital content creators, including social media influencers and online freelancers, to declare their earnings and pay taxes under amendments to the Federal Income Tax Regulation.

The Council of Ministers issued Regulation No. 597/2026, published in the Federal Negarit Gazette on October 28, introducing new provisions covering income generated through digital platforms, online content creation and remote freelance services.

Under the new regulation, income earned from digital content creation will be subject to business income tax under Schedule C or a 15 percent tax rate on other income under Schedule D, depending on the applicable conditions.

The regulation requires digital content creators liable for business income tax to maintain accurate financial records covering all income received from both domestic and foreign sources, including cash and non-cash payments.

These records must include earnings from advertisements, sponsorships, subscriptions, digital gifts and other sources of online monetization. Creators are also required to retain platform income statements, agreements with sponsors and advertisers, bank statements and records showing the estimated market value of goods or services received instead of cash.

For creators taxed under Schedule D, the regulation sets an annual income threshold of 50,000 birr. Those whose annual digital content earnings exceed this amount are required to pay a 15 percent tax on their income.

The regulation also requires eligible Schedule D taxpayers to declare their income and pay taxes quarterly, within 30 days after the end of each quarter.

It further places reporting obligations on online platforms and organizations facilitating payments to digital content creators. These entities must submit quarterly reports to the Tax Authority identifying Ethiopian-resident creators, their addresses and the amounts paid to them.

The reporting requirements also cover digital platforms and organizations making payments for advertisements and other similar services. The Tax Authority is authorized to monitor creators’ activities and cooperate with domestic and international digital platforms to obtain information about their earnings.

The new rules also clarify that Ethiopian residents cannot avoid their tax obligations simply because their digital platform accounts are registered abroad or their payments are received outside the country.

Beyond digital content creation, the regulation extends tax withholding provisions to income earned by Ethiopian residents through digital freelance services and other remote working arrangements.

It also introduces provisions requiring taxpayers receiving digital content income taxable under Schedule D to register and obtain a Taxpayer Identification Number (TIN).

The amendments form part of broader changes to Ethiopia’s federal income tax administration, addressing digital economic activities, taxpayer categorization, financial reporting and tax compliance.

The regulation took effect upon its publication in the Federal Negarit Gazette on October 28, 2026, except for a specified provision whose implementation is linked to a temporary decision by the Ministry of Finance.