Djibouti taxes residents on worldwide income and non-residents on Djibouti-source income only. Djibouti operates a self-assessment system for corporate tax, with the domestic tax authority conducting post-filing review.
Djibouti's tax year is the calendar year.
25% standard rate (Business Profit Tax); 3-year exemption for newly registered companies.
Progressive from 2% to 30%, per multiple current sources (LawGratis, TaxAtlas, Global Expansion); one lower-quality aggregator cites a 33% top rate but this is not corroborated elsewhere and should be treated with caution. Indicative bracket structure: 0% up to DJF 240,000, 10% from DJF 240,000-600,000, 20% from DJF 600,000-1,200,000, and 30% above DJF 1,200,000 annually.
10% standard VAT.
An individual is resident for tax purposes if they have a permanent home in Djibouti, or have been present for at least 183 days in a calendar year. Djibouti operates a territorial system for non-residents (taxed only on Djibouti-source income) combined with worldwide taxation for residents, who receive a foreign tax credit for taxes paid abroad.
A non-Djibouti-resident entity has a Djibouti permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Djibouti on the entity's behalf, following the OECD Model Treaty definition as applied under Djibouti's domestic law and any applicable tax treaty.
No CFC-style attribution provision was found in Djibouti's General Tax Code, and none would be structurally expected under Article 25 of the official CGI text (Ministry of Budget): "the tax on professional profits only strikes profits realized within the Republic of Djibouti" (l'impot sur les benefices professionnels ne frappe que les benefices realises dans la Republique de Djibouti) - Djibouti operates a strictly territorial corporate tax system. CFC regimes exist specifically to prevent deferral of home-country tax on a resident's share of a foreign subsidiary's passive income under worldwide taxation; a jurisdiction that doesn't tax foreign-source income in the first place has no structural need for that mechanism.
No statutory thin capitalization ratio is identified in reliable sources for Djibouti specifically.
Djibouti does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics under the French-derived legal tradition shared across the region. Djibouti does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Djibouti does not provide a broad participation exemption for foreign dividends in the European sense, consistent with the transfer-pricing-focused (rather than exemption-focused) anti-avoidance framework already confirmed elsewhere on this page; relief from double taxation is available primarily through Djibouti's foreign tax credit system where one exists.
Djibouti has a foreign tax credit mechanism for foreign tax paid on foreign-source income also taxed domestically, capped at the domestic tax otherwise due on that income - confirm current specific provisions directly given limited public documentation of this area for Djibouti.
Djibouti has approximately 3 double taxation agreements, with confirmed partners including France, Ethiopia, and Somalia. Djibouti is actively negotiating additional tax treaties with several jurisdictions.