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Ethiopia and Slovak Republic Sign Double Taxation Avoidance Agreement

Ethiopia and Slovak Republic Sign Double Taxation Avoidance Agreement

The Federal Democratic Republic of Ethiopia signed a Double Taxation Avoidance Agreement (DTAA) with Slovak Republic   for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income on 1st October 2016 at Addis Ababa.

Profits derived by an enterprise from the operation of ships or aircrafts in international traffic shall be taxable in the country of residence of the enterprise. Dividends, interest, royalties and fees for technical services income will be taxed both in the country of residence and in the country of source. However, the maximum rate of tax to be charged in the country of source will not exceed 5% in the case of dividends and 10% in the case of interest, royalties and fees for technical services. Capital gains from the scale of shares will be taxable in the country of source.

The Agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities of the two countries in line with internationally accepted standards including exchange of banking information and incorporates anti-abuse provisions to ensure that the benefits of the Agreement are availed only by the genuine residents of the two countries.

The Agreement will provide tax stability to the residents of Ethiopia and Slovak Republic and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between Ethiopia and Slovak Republic.

The Agreement was signed by H.E Mr.Ahmed Shide,State Minister of Finance and economic cooperation   and H.E Mr Miroslav Lajčák   Foreign Minister of the Slovak Republic signed the agreement on behalf of the Ethiopia  Government and the Government of the Slovak Republic respectively