Every taxpayer in Ethiopia is required to have a Taxpayer's Identification No. (TIN). The procedures to register for TIN and Value Added Tax (VAT) in Ethiopia are included here. This page also contains procedures related to cancellation of VAT registration, and VAT Records and VAT Invoices.
Taxpayer Identification Number (TIN)
- Types of Tax Identification Number
- Who is required to register?
- Documents required to apply for TIN?
- Where to register for TIN?
- Cancellation of TIN
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.
Types of Tax Identification Number
There are two types of tax identification number; employment and business. Employment TIN is provided for employees who pay income tax in accordance with the applicable tax law. On the other hand, business TIN is provided for sole proprietors or business organizations that engage in business activity taxable in accordance with the applicable Ethiopian law.
Who is required to register?
All persons who are liable for tax under a tax law are required to apply to the Ministry of Revenue for registration unless a person is already registered. However, the following persons are not required to apply:
- a non-resident (who is not permanently established in Ethiopia) provided that the only Ethiopian source income derived by the person is derived from an insurance premium or royalty, dividend or interest, or management or technical fee; or
- an individual whose only income is derived from a repatriated profit.
Please note that the above persons are, however, required to pay tax even though they are not required to register.
Documents required to apply for a Tax Identification Number
The document required to apply for an Employment TIN includes is a residence identity card, passport, or driver’s license. The applicant is further required to submit biometric information so as to ensure his/her proper identification and counteract identity theft or fraud.
The documents required to apply for a Business TIN (for partnership and PLC) includes
- filled application form;
- two size photographs of the general manager;
- authenticated and signed memorandum and articles of association; and
- an authenticated lease contract.
Where to Register for TIN
The TIN registration is done in nine regional administrations, in Addis Ababa at 10 sub cities, in Dire Dawa adminstration and at the Ministry of Revenue sites including Addis Ababa Main branch office, Large Taxpayers' Office, Hawassa, Adama (Nazret), Mekele, Bahirdar, Diredawa and Jimma branch offices.
Cancellation of TIN
The Ministry of Revenue may, by notice in writing, cancel the TIN of a taxpayer when satisfied that:
- the taxpayer’s registration has been cancelled under Article 11 of the TAX Administration 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.
The Ministry of Revenue may, at any time, by notice in writing, cancel the TIN issued to a taxpayer and issue the taxpayer with a new TIN.
VAT Registration Procedure
Article 18 of the VAT proclamation No. 285/2002 (as amended in 2008) and article 8 of VAT regulation No. 79/2002
- 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 within 30 days of the registration.
- The issuing authority will 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.
Cancellation of VAT Registration
Article 19 of the VAT Proclamation
- A registered person may apply to have his/her registration for VAT canceled within 30 days (article 10. regulation no.) after he ceased to make taxable transactions. The application for cancellation must be in writing, stating the date upon which the person ceased to make taxable transactions, and shall state whether or not that person intends to make taxable transactions within 12 months from that date.
- Except in situations provided for 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.
- 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.
Article 22 VAT Proclamation
- Except as otherwise provided, 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 information The 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.
- The VAT invoice should include the following details:
- 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
- The 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.
- 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.
A registered person or any other person liable for tax under the VAT proclamation should maintain for 10 years in Ethiopia, the:
- 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.