Table of Contents
How is turnover tax calculated in Ethiopia?
Turnover tax is charged under the Turnover Tax Proclamation at a rate of 2% on the supply of goods and services relating to contractors, grain mills, tractors and combine harvesters and at a rate of 10% on other services. Turnover tax is payable on goods and services supplied by persons who are not registered for VAT.
How do you calculate turnover tax?
Here are the turnover tax rates for micro-businesses depending on their turnover.
- 0 to 335 000 = 0%
- 335 001 to 500 000 = 1%
- 500 001 to 750 000 = 1 650 + 2% of the amount that’s above 500 000.
- 750 001 and over = 6 650 + 3% of that amount that’s above 750 000.
What are the tax declaration period in Ethiopia?
An employee with more than one employer is required to file for declaration within 30 days from the end of every three month. Such employees must pay the due taxes every 3 month. A Category “A” or “B” taxpayer should file a tax declaration within 4 months or 2 months from the end of the tax year, respectively.
What is turnover tax PDF?
Page 2. Turnover Tax (TOT) is a tax that is charged on gross sales/turnover (i.e. earnings, income, revenue, takings, yield and proceeds). A person conducting any business with annual sales of K800, 000.00 or less is supposed to pay turnover tax.
What is turnover tax?
The official definition of turnover according to the Companies Act is stated as “the amount derived from the provision of goods and services after deduction of trade discounts, value added tax (VAT), and any other taxed based on the amounts so derived”.
Who is eligible for turnover tax?
Turnover Tax (TOT) is a tax charged on gross sales of a business as per Sec. 12 (c) of the Income Tax Act. The tax is payable by resident persons whose gross turnover is more than Ksh 1,000,000 but less than Ksh 50,000,000 in any given year.
Who can apply for turnover tax?
Turnover Tax is a simplified tax system only available to sole proprietors, partnerships, companies or close corporations with a “qualifying turnover” of less than R1m per year. These types of entities are called micro businesses.
How do you calculate a company’s turnover?
To determine your rate of turnover, divide the total number of separations that occurred during the given period of time by the average number of employees. Multiply that number by 100 to represent the value as a percentage.
What is a qualifying turnover?
The qualifying turnover includes the total receipts from carrying on business activities, excluding any amount of a capital nature and amounts exempt from normal tax.
How do you calculate annual turnover of a company?
Annual Turnover Formula
- Annual Turnover Formula = Total Sales of the Trading Company or.
- Total Production of a Manufacturing Company or.
- Total Investments held by Mutual Funds, Exchange-Traded Funds, etc.
- Gross Receipts of a Profession During the Particular Year.
- Calculation of Monthly Turnover of Trader.
Is turnover a profit or income?
Turnover is the total sales made by a business in a certain period. It’s sometimes referred to as ‘gross revenue’ or ‘income’. This is different to profit, which is a measure of earnings. It’s an important measure of your business’s performance.
How do I calculate turnover of a business?
As long as your accounting department is keeping precise and accurate records then calculating turnover is as simple as adding together all of your total sales for a given period. Generally, however, turnover is measured by the year.
What is Ethiopian federal tax administration proclamation?
The Ethiopian Federal tax administration proclamation is issued under the authority of the House of peoples Representatives of the Federal Democratic Republic of Ethiopia.
What is the base of computation of turnover tax?
Base of computation of the Turnover tax shall be the gross receipt in respect of goods supplied or Services rendered A person who sells goods and services has the obligation to collect the Turnover Tax from the buyer and transfer it to the Tax Authority. Hence, the seller is principally accountable for the payment of the tax.
What are the exemptions from turnover tax?
The following shall be exempted from Turnover Tax:The Minister of Finance and Economic Development may, by directive, exempt other goods and services. the supply of books. The Minister of Revenue may, by directive, determine the scope and manner of exemptions provided for in this Article.
What is the turnover tax on sale of goods and services?
10% (ten percent) on others. Base of computation of the Turnover tax shall be the gross receipt in respect of goods supplied or Services rendered A person who sells goods and services has the obligation to collect the Turnover Tax from the buyer and transfer it to the Tax Authority.