The Ethiopian transfer pricing policy, outlined in the Ministry of Finance Directive 981/2024, establishes specific requirements for related parties with an annual turnover exceeding ETB 500,000.
This policy, effective from 2024, provides guidance on comparability analysis, sources of comparable transaction information, and transfer pricing documentation requirements.
As per the policy, entities must maintain transfer pricing documentation to ensure transaction consistency with the arm’s length principle. Non-compliance may result in a 20% tax liability penalty. For more comprehensive insights, consider downloading Grant Thornton's latest report on Ethiopia.