Income Taxation Of The Digital Economy Beps And Ethiopian Tax Administration In Focus

The unprecedented pace of digitalization of the economy wreaked havoc on income tax rulesrndesigned for bricks-and-mortar economy. The source-residence and PE rules that are predicatedrnupon fixed place requirements are getting obsolete in the face of virtual economic presence. As arnresult the OECD’s BEPS project has been a rallying point for the developed and developingrncountries alike. In view of this, it is important to look into the legal and administrative challengesrnof income taxation of the digital economy in Ethiopia.rnAfter critically assessing the legal and practical challenges in taxing the digital economy inrnEthiopia, the research finds that the income tax rules are riddled with gaps and the taxrnadministration has many challenges. The research in this regard mainly recommends thatrnEthiopia should join the BEPS project and modify its income tax rules and modernize its taxrnadministration in the process.

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