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. The Council of Ministers issued Regulation No. 597/2026, published in the Federal Negarit Gazette on October 28, establishing new provisions for income generated through digital platforms, online content creation and remote freelance services.
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, according to the regulation. Digital content creators liable for business income tax must maintain accurate financial records covering all income received from both domestic and foreign sources, including cash and non-cash payments. For creators taxed under Schedule D, an annual income threshold of 50,000 birr applies. Those whose annual digital content earnings exceed this amount are required to pay a 15 percent tax on their income.
Schedule D taxpayers must declare their income and pay taxes quarterly, within 30 days after the end of each quarter. The regulation also requires taxpayers receiving digital content income taxable under Schedule D to register and obtain a Taxpayer Identification Number. The new rules 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.
Online platforms and organizations facilitating payments to digital content creators face reporting obligations under the regulation. These entities must submit quarterly reports to the Tax Authority identifying Ethiopian-resident creators, their addresses and the amounts paid to them. The regulation also extends tax withholding provisions to income earned by Ethiopian residents through digital freelance services and other remote working arrangements.
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.