Every taxpayer in Ethiopia is required to have a Taxpayer's Identification No. (TIN). The procedures to register for TIN, Value Added Tax (VAT) in Ethiopia are included here. This page also contains procedures related to value added tax (VAT), assessment, VAT payment, VAT filing, cancellation of VAT registration, VAT Records and VAT Invoices.
- Article 9 of the Tax Administration Proclamation: Requirement for Registration at the Ethiopian Revenue and Customs Authority (ERCA)
- Article 13 (1) of the Tax Administration Proclamation: Requires ERCA to issue TIN for the taxpayer registered under Article 9
- Article 14 of the Tax Administration Proclamation: Use of TIN
- Where to Register (TIN)
- Article 15 of the Tax Administration Proclamation: Cancellation of TIN
- VAT Registration Procedure
- Cancellation of VAT Registration
- VAT Invoices
- Filling of Tax Return and Payment of VAT
- VAT Records
Taxpayer Identification Number (TIN):
TIN is a well-designed numbering system, which consists of numbers generated randomly and it has a self check digit, that is a number calculated from the digits forming the basic part of the TIN.
Article 9 of the Tax Administration Proclamation: Requirement for Registration at the Ethiopian Revenue and Customs Authority (ERCA)
- Subject to sub-articles (2) and (3) of this Article, a person who becomes liable for tax under a tax law shall apply to the Authority for registration unless the person is already registered.
- Sub-article (1) of this Article shall not apply to:
- a non-resident if the only Ethiopian source income derived by the person is subject to Articles 51 and 53 of the Income Tax Proclamation; or
- an individual whose only income is subject to Article 64 (2) of the Income Tax Proclamation.
- An employer shall apply for registration of an employee entering into employment with the employer unless the employee is already registered.
- Sub-article (3) of this Article shall not relieve the employee of the obligation to apply for registration under sub-article (1) of this Article should the employer fail to make the application for the employee.
- An application for registration shall be:
- made in the approved form;
- accompanied by documentary evidence of the person’s identity, including biometric identifier, as may be specified in the Regulations;
- made within 21 days of becoming liable to apply for registration or within such further period as the Authority may allow.
- In the case of an application made by an employer for an employee under sub-article (3) of this Article, the biometric identifier required under subarticle (5)(b) of this Article shall be provided by the employee.
- Subject to sub-article (10) of this Article, the obligation of a person to apply for registration under sub-article (1) of this Article shall be in addition to an obligation or option of the person to apply for registration for the purposes of a particular tax under another tax law.
- The Authority shall register a person who has applied for registration under sub-article (1) of this Article if satisfied that the person is liable for tax under a tax law and issue the person with a registration certificate in the approved form.
- If the Authority refuses to register a person who has applied for registration, the Authority shall serve the person with written notice of the refusal within 14 days of the person filing the application for registration.
- When a person has applied for registration under sub-article (1) of this Article, the Authority shall use the information provided for the registration for the purposes of any other registration of that person required or permitted under a tax law for the purposes of a particular tax without the person being required to file any additional registration forms.
- Despite sub-article (8) of this Article, the Authority may request a person to provide any further information necessary to complete an additional registration of the person.
- The Authority may register a person who has failed to apply for registration as required under this Article and shall issue the person with a registration certificate in the approved form
- The registration of a person under this Article shall take effect from the date specified on the person’s registration certificate.
- ERCA shall issue a TIN to a taxpayer registered for the purposes of the tax laws under Article 9 of this Proclamation.
- A TIN shall be issued for the purpose of all tax laws and a taxpayer shall have only one TIN at any time.
- The Authority issues a TIN to a taxpayer by serving the taxpayer with written notice of the TIN.
- A taxpayer who has been issued with a TIN shall state the TIN on any tax declaration, notice, or other document filed or used for the purposes of a tax law, or as otherwise required under a tax law, including supplying the TIN to a withholding agent in respect of payments made by the agent to the taxpayer.
- A taxpayer applying for a license to carry on a business or occupation shall be required to supply the taxpayer’s TIN to the licensing authority. However, when renewing the license the taxpayer should supply its TIN only if the TIN has changed since the original application of the license.
- A licensing authority issuing a license to carrying on a business or occupation shall not issue a license to a taxpayer unless the taxpayer has supplied their TIN.
- A TIN is personal to the taxpayer to whom it has been issued and, subject to the exception bellow, shall not be used by another person.
- The TIN of a taxpayer may be used by a licensed tax agent when:
- the taxpayer has given written permission to the licensed tax agent to use the TIN; and
- the licensed tax agent uses the TIN only in respect of the tax affairs of the taxpayer.
The TIN registration is done in nine regional adminstrations, in Addis Ababa at 10 sub cities, in Dire Dawa adminstration and at the Federal Inland Revenue Authority's sites including Addis Ababa Main branch office, LargeTaxpayers' Office, Hawassa, Nazreth,Mekele, Bahirdar, Diredawa and Jimma branch offices.
Cancellation of TIN
- ERCA shall, by notice in writing, cancel the TIN of a taxpayer when satisfied that:
- the taxpayer’s registration has been cancelled under Article 11 of this Proclamation;
- a TIN has been issued to the taxpayer under an identity that is not the taxpayer’s true identity; or
- the taxpayer had been previously issued with a TIN that is still in force.
- ERCA may, at any time, by notice in writing, cancel the TIN issued to a taxpayer and issue the taxpayer with a new TIN.
- A person applying to register for VAT is required to do so in such a form as is established by the implementation directive issued by the Minister of Revenue.
- When a person carrying out taxable transactions files an application to be registered for VAT, the Authority is required to register the person in the VAT register, and to issue a certificate of registration mentioned list no. 3 below within 30 days of the registration.
- The Authority shall issue a VAT registration certificate containing such details as:
- the full name and other relevant details of the registered person;
- the date of issuance of the certificate;
- the date from which the registration takes effect;
- the registered person's taxpayer identification number.
- Registration takes place on one of the following dates, depending which date comes first:The Authority is required to establish and maintain a VAT register containing details of all persons registered for VAT.
- in case of obligatory registration, on the first day of the accounting period following the month in which the obligation to apply for registration arose;
- in the case of voluntary registration, on the first day of the accounting period following the month in which the person applied for registration.
- on the date selected by the registered person on his application for registration.
- If a person is required to register for VAT and has not applied to be registered, the Authority may register the person on its own initiative and send to the registered person the certificate as mentioned in list no. 2 above.
- A person registered for VAT is required to use his taxpayer identification number on all VAT invoices, and on all returns and official communications with the Authority.
- When a person applied for voluntary registration as mentioned above, the Authority can deny the application for registration if:
- the person has no fixed place of abode or business; or
- the Authority has reasonable grounds to believe that the person will not keep proper records or will not submit regular and reliable tax returns, as required under this Proclamation.
- A registered person is to apply to have his registration for VAT canceled if he has ceased to make taxable transactions.
- Except in situations provided for in list no. 1 above, a registered person may apply to have his registration for VAT canceled at any time after a period of three years of the date of his most recent registration for VAT if the registered person's total taxable transactions in the period of 12 months then beginning reasonably are expected to be not more than 500,000 Birr.
- The cancellation of VAT registered takes effect at the time the registered person ceased to make taxable transaction or, if the registered person has not ceased to do so, at the end of the accounting period during which the person applies to the Authority or cancellation of VAT registration in accordance with in list no. 2 above.
- If a person's registration for VAT is canceled, the Authority is required to remove the person's name and all other details from the VAT register and the person is required to return the issued certificate of registration.
- Except as otherwise provided in list no.6 and 7 below, a person registered for VAT that carries out a taxable transaction is required to issue a VAT invoice to the person who receives the goods or services. A person who is not registered for VAT does not have the right to issue a tax invoice.
- A VAT invoice is a document executed in the form stipulated by the Minister of Revenue and containing the following informationThe registered person is required to issue the VAT invoice to the purchaser of goods or services upon the supply or rendering, but not later than 5 days after the transaction.
- full name of the registered person and the purchaser, and the registered person's trade name, if different from the legal name,
- taxpayer identification number of the registered person and the purchaser,
- number and date of the VAT registration certificate:
- name of the goods shipped or services rendered;
- amount of the taxable transaction;
- amount of the excise on excisable goods:
- sum of the vat due on the given taxable transaction;
- the issue date if the VAT invoice, and
- serial number of the VAT invoice
- Except when a tax invoice is not required under list no.6 and 7 below, a registered recipient who has not received a tax invoice as required under list no.1 above may request, in writing within 60 days after the date of the supply, the registered supplier to provide a tax invoice in respect of the taxable transaction, and the supplier must comply within 14 days after receiving the request.
- Where a registered recipient claims to have lost the original tax invoice for a taxable transaction, the registered supplier may provide a copy clearly marked" copy"
- Subject to list no. 7 below, in the case of a registered person's of goods or rendering of services at retail to purchasers who are not VAT registered persons, the Minister or Revenue may by directive provide that a receipt or simplified form of VAT invoice may be used instead of a VAT invoice.
- The Minister of Revenue may by directive waive a registered person's obligation to issue a receipt or tax invoice for cash sales if the total consideration for the entire supply does not exceed 10 birr.
- Every registered person is required:The VAT return for every accounting period shall be filed no later than the last day of the calendar month following the accounting period.
- to file VAT return with the Authority for each accounting period, whether or not tax is payable in respect of that period;
- to pay the tax for every accounting period by the deadline for filing the VAT return.
- VAT on taxable imports is collected by the Ethiopian Customs Authority in accordance with this proclamation and the customs legislation of Ethiopia under the procedure contemplated for customs duty.
- Record keeping
A registered person or any other person liable for tax under this proclamation shall maintain for 10 years in Ethiopia
- original tax invoices received by the person,
- a copy of all tax invoices issued by the person,
- customs documentation relating to imports and exports by the person,
- accounting records; and
- any other records as may be prescribed by the Minister of Revenue by directive
For purposes of list no. 1 above, records means accounting records, accounts, books, computer-stored information, or any other documents.
- Notification of Changes
Every registered person shall notify the Authority, in writing, of:
- any change in the name, address, place of business, constitution, or nature of the principal taxable activity or activity or activities of the person; and
- any change of address from which, or name in which, a taxable activity is carried on by the registered person, Within 21 days of the change occurring.