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Tibebe Zewdu The Ministry of Revenues has recently issued an explanatory note on the Directive for Keeping of Books of Accounts for Tax Purposes, Directive No. – 176/2014. In this explanatory note, the Authority has extended the definition given to...

First of all, an OPC is not a cement product, not exclusively anymore anyways. It’s a shorthand for one of the two new forms of business organizations added to a family of business organizations by the new Commercial Code of Ethiopia, the other being the limited liability partnership (“LLP”).
The legal recognition of OPC may give it a veneer of novelty but a two-person PLC had always effectively been a one-person company ever since a PLC was put in use as a commercial entity.

In a recent case, a foreign-owned company doing business in Ethiopia recorded as deductible cost the expense for the feeding and upkeep of a dog, but Tax Authority auditors rejected dog food expense and assessed a corporate tax, interest and penalty against the Company. And the Tax Appeal Commission (“the Commission”) concurred with the Tax Authority. The Commission, probably struggling with what to make of dog-food expenses, gave a curious reason for rejecting the expense as tax deductible. The reason the Commission gave for rejecting the expense on the dog by the Company was that the Company did not register the dog in its own name. The reasoning of the Commission obviously begs the question:…