Djibouti tax rates 2026

The scale applies to each month's pay on its own, with no annual averaging and no allowance for family situation. Djibouti has no general personal income tax: business profits, property income and gains each have their own tax.

Djibouti taxes income where it is earned rather than where the earner lives. The tax on salaries, known as ITS, applies to pay for work carried out in Djibouti, so an expatriate on a local contract pays it from the first month whatever their residence status, and work done abroad stays outside it. The profits tax follows the same logic: since 2023 it covers all profits made in Djibouti, including profits from exports, subject to tax treaties.

Domicile matters mainly for payments sent abroad. A recipient counts as non-resident when it is neither domiciled in Djibouti nor holds a permanent business installation there, and a payer counts as established in Djibouti when it is an individual domiciled in the country or a company with its seat or an establishment there. Each kind of income carries its own tax under the General Tax Code rather than going into one personal return.

ITS is worked out every month on that month's pay, including bonuses, allowances and benefits in kind such as free housing, which is valued at its rental value. The employer withholds it and pays it to the Treasury before the 10th of the following month. Fractions of pay below 5,000 FD are ignored, and family allowances and expense reimbursements backed by receipts are exempt. Retirement pensions fall outside the tax altogether.

Back pay is added to the month in which it is paid, and when it exceeds half the employee's monthly pay, the employee may ask for it to be spread over the months it relates to. Staff hired for less than a calendar month pay a flat 15% on their whole pay. Severance pay carries an abatement of 1,500,000 FD before the scale applies.

A business or individual in Djibouti that pays a foreign recipient withholds 10% of the gross amount before VAT. The charge covers services supplied or used in Djibouti, royalties and industrial property income, head-office fees paid by branches, studies, technical assistance and commercial prospecting. International transport and its directly linked services fall outside it, as does the hire of ships and aircraft used for international transport. The payer remits the tax within the first 15 days of the following month.

Non-residents who sell shares in a Djibouti company pay 10% on the gain. The tax is declared and paid to the tax administration at the same time as the transfer deed is registered, and the seller, the buyer and the Djibouti company whose shares changed hands are jointly liable for it.

Individuals who sell land or buildings pay a separate tax on the net gain, the sale price less selling costs minus the purchase price, and the seller bears it whatever the contract says. A principal residence held for at least five years is exempt, with no minimum period when the sale follows a family need or a job move within the country. Insurance payouts, inheritance and marital partitions, gifts of a built property between parents and children, and net gains up to 100,000 FD a year are exempt too.

Property held as a business asset is taxed differently: its gain goes into business profits and the profits tax. Investors in labelled startups get their own break. The Startup Act exempts gains on the sale of shares in such startups from capital gains tax, and income or profits reinvested in a startup's initial capital or a capital increase are fully deductible, up to the income or profit taxed.

Every trader and professional pays an annual business licence tax set by class of activity in the General Tax Code's schedule. People under 31, groups made up only of such people, civil servants taking voluntary retirement and employees laid off for economic reasons who start a business on their own account get a licence tax exemption of 100% in the first calendar year, 50% in the second and 25% in the third.

Liberal professions have been subject to VAT regardless of turnover since 2024. A business that stops trading or is sold must notify the tax administration within 20 days and file its actual profit within the same period, and heirs have six months from the date of death to do so.

The 2025 finance law added a withholding of 0.2% on every money transfer made by telegraphic transfer, mobile money or a transfer agent. Transfers below 1,000 FDJ are exempt, as are transfers inside Djibouti between accounts of the same holder. The same law moved the importer licence tax of businesses on the simplified regime to quarterly regularisation, settled by 10 April, 10 July and 10 November.

The 2026 finance law, adopted on 25 December 2025, left tax rates unchanged and concentrated on customs: an electronic one-stop window with electronic payment of duties and fees, and binding advance rulings on tariff classification, origin and customs value. Land allocated to developers must now be built on within six months of the allocation order and cannot be resold before it is developed.

The Startup Act, published on 8 January 2026, created a startup label for innovative Djibouti companies less than seven years old. A labelled startup pays no corporate tax and no licence tax while its label is valid, and the law ends the fixed Class 6 licence tax of 288,000 FD that startups paid under the 2019 finance law.