investethiopia.gov.et : Incentives & Taxation Procedures For Investment Ethiopia

Organization : Ethiopian Investment Commission
Type of Facility : Incentives & Taxation Procedures For Investment
Country: Ethiopia

Website : http://www.investethiopia.gov.et/index.php

Incentives & Taxation Procedures For Investment :

Incentives:
Ethiopia offers a comprehensive set of fiscal and non-fiscal incentives to encourage investment into priority areas, including:
** Customs duty exemptions of up to 100% on imports of capital goods for eligible areas of investment;

Related : Ethiopian Investment Commission New Investment Permit Application Process Ethiopia : www.statusin.org/8517.html

** Income tax exemptions for a period ranging between 1 and 9 years, depending on the specific activity and the location of the investor;
** Loss carry forward for business that suffer losses during the income tax exemption period for half of the tax exemption period;
** With the exception of a few products, no export tax is levied on Ethiopian export products;
** Duty Drawback Scheme, Voucher Scheme and Bonded Factory and Manufacturing Warehouse Schemes
** Various non-fiscal incentives for exporters
** Guaranteed remittance of capital for foreign investors

Taxation:
The Ethiopian tax system comprises direct and indirect taxes. Direct taxes include personal income tax, rental tax, withholding tax, and corporation tax, among others. The main types of indirect taxes are VAT, customs duty, excise and turn over taxes. Main taxes are summarized in the table below.

Main Taxes in Ethiopia:

Land Allocation:
All land in Ethiopia is considered public property. Individuals, companies and other organizations can, however, acquire the right to use land. There are two broad classifications of land for rent or lease purposes: rural land, mainly used for agricultural purposes, and urban land, mainly used for industrial purposes or other activities. Land lease or rental rates differ from location to location. Please download the Factor Cost publication for further details.

Customs Duty :
** Applicable to both domestic and foreign investors engaged in eligible new enterprises or expansion projects in manufacturing, agriculture, agro-industries, generation, transmission and supply of electrical energy, Information and Communication Technology Development (ICT), tourism, construction contracting, education and training, star designated hotel, specialized restaurant, architectural and engineering consultancy works, technical testing and analysis, capital goods leasing and importation of LPG and bitumen.

** 100% exemption from the payment of customs duties and other taxes levied on imports is granted to all capital goods, such as plant, machinery and equipment and construction materials

** Spare parts worth up to 15% of the total value of the imported investment capital goods, provided that the goods are also exempt from the payment of customs duties

** An investor granted with a customs duty exemption will be allowed to import capital goods duty free indefinitely if his investment is in manufacturing and agriculture, and for five years if his investment is in other eligible areas

** An investor entitled to a duty-free privilege who buys capital goods or construction materials from local manufacturing industries shall be refunded the customs duty paid for raw materials or components used as inputs for the production of such goods

** Investment capital goods imported without the payment of custom duties and other taxes levied on imports may be transferred to another investor enjoying similar privileges