*¥

f h.tf"
*/ ~Yoto" if .&L
IJDhtoft/if ~ TilILh

~Yot,.1A .,
;Jt~ ;JILlIJ
FEDERAL NEGARIT GAZETA
OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

"m~;;: qou"" ck'l'C Iu 91hYear No. 19

OJ\. ""V-A-1 &..Y..t.I\ 1£ .&t'fPtI t.ftl'e t T-f1l\.tI
".&til"n'1-;t-IJ"'p' t)'g.", Iuf1?; ADDIS ABABA-31't December, 2002
f i'h1l'O -twl1v-:f 9'"tIc 0."" m'14:~"" fmllJ

tPJ~6li}, CONTENTS

fOlJ.t il""c-:f 9"tI C 0."" 1.111 ck'l'C ~il !.I ilfj?; q. 9" Council of Ministers Regulations No. 7912002
fOlJ.til""C-:f 9"tlC 0."" fi'lJJ.Oyt h(a."" ;t-tlil Council of Ministers Value Added Tax
1.111 ..' 1K' Iilf~il Regulations , Page 1979
"

f-tlJJ.Oy t h(a."" ;t-ti il il t\OyilhLA REGULATIONS ISSUED PURSUANT TO THE VALUE

n m llJm- "'I'~ ODU''''''' f mllJ 1.111 ADDED TAX PROCLAMATION
fOlJ.til""C-:f 9"tI C -0."" f J\. ..,.V-A-1 &..Y..t.I\1£ .&t'fPtIt.
These Regulations are issued by the Council of Ministers
ftl'e tT1It\.h "ilL~OIJ. "111\"'" P'AllJ1'i -t..,'1C t\ODlD1'11
pursuant to Article 5 of the Definition of Powers and Duties of
nmllJm- "'I'~ ck'l'C !!!Iilfft (h11.-t7f7ft\) "''''K' ?; hS
the Executive Organs of the Federal Democratic Republic of
n-tlJJ.Oyt h(a."" ;t'hil "'I'~ ck'l'C nit?;!Iilfj!! "''''K' :f!! Ethiopia Proclamation No. 4/95 (as amended) and Article 64
n-tl'1mm- P'AllJ1 ODU''''''' f.1J1 1.111 "m-'I':tA II
of the Value Added Tax Proclamation No. 285/2002.
tllf:A li
m~I\I\ CHAPTER 1
General
li' "6J.bC CiJil
1. Short Title
f.tJ 1.111 "fOlJ.t il""C-:f 9"tI Co."" f -tlJJ.Oy t h(a."" ;t-ti il
1.1-0 ck'l'C ~il!Iilfj?;" -t1ltto t\.m."il f.:fl\A II . These Regulations may be cited as the' 'Council of
Ministers Value Added Tax'Regulations No. 7912002.
~. ..,.C:}
""1
2. Definitions
f:f>/r "1'111 t\.I\ ""C.,.9" fOlJ.ll'1mm- I1Atf~ nili''''CI-
In these Regulations, unless the context requires
li' "'1t\P'AllJ1" Oyt\"" f&..Y..t.A "1C m-il'l' 1Q otherwise:
'1t\P'AllJ1 ~m- I
1) "Authority", means the Federal Inland Revenue
~. "f"'9"~tI '1t\P'AllJ1" Oyt\"" fJ\.""V-A-1 "'9"~tI
Authority ("FIRA");
'1t\P'AllJ'} ~m- I 2) "Customs Authority" means the Ethiopian Customs
[. "OIJ.til""C" h'i "OIJ.til.f;C" Oyt\;" h11.~1.9"
Authority;
-thi'/r f1QsP:f OIJ.til""C h'i f1QsP:f OIJ.til-f;C 3) "Minister" and "Ministry" shall mean the Minister
~m- ; of Revenue and the Ministry of Revenue, respec-
!!' " "'I'~" Oyt\"" f -tlJJ.Oyt h (a."" ;t-ti il "'I' ~ ck'l'C tively.
nit?;!Iilfj!! ~m-I 4) "Proclamation" means the Value Added Tax
?;, " ;t-ti il" Oyt\"" 0 -tlJJ.Oy t h(a."" ;t-nil "'I' ~ ck'l'C Proclamation No. 285/2002; and
~fit?;!Iilfj!! f-tllJt\m- f-tlJJ.Oyt h(a."" ;t-tlil ~m- II 5) "Tax" or "V AT" means the Value Added Tax
Imposed by the V(\lueAdded Tax Proclamation.
11~ CP;J 6.00
Unit Price ~;J&T ;Jtl.1IJ;r..".~. itif.li
Negarit G.P.O.Box 80,001
1A" lillii' 4..1..~A ~9't"" ;JfI,lI);;1'C lit ;r1Pfr' 1)g.,.' litn~ ,.,... Federal Negarit Gazeta- No. 1931stDecember, 2002-Page 1980

f- fA'!p J. :PCP:" J.1'j J.1A "lit--:" ODhm:" 3. Supply of Goods or Rendition of Services
Ii- t\h'P:( h,}"'1\ § '}o-il h'}+", (C) hA.-'09" t\1Pt- 1) For purposes of Article 4, Sub-Article (3) of the
+C11 iJ? h Cjfl1lJ..(\'I'h 11A..,I\-T fl1lJ..11t\m-
+7f"f fl1lJ..
Proclamation treats the supply of goods or the
f ;l'h(\' OOlPlT flf~m-'} ;l'hil fl1lJ..hLIAOT'}
f,}"'~ P't- h'}:"il?(\ TC4.OIJ~T h~ OOlJ~l'" rendition of services to employees as supplies in the
'lJ.T OJ~9" h'}:"il?(\m-'} t\0IJ?f?f1A t\1Pt-+7f"f course or furtherance of a taxable activity; and
+C11 h Cj fl1lJ..(\'I' h 11A..,I\-T i\.1f,} j ~tJ h'}:"
fl1lJ.. therefore taxable unless the transaction is exempt
il?(\ Oh'P:( h'}+", ~ ~, i1IA+1.l1 Oil+.,.C ;l'hil under Article 8 of the Proclamation.
fl1lJ..hLIAOT ~IfCjIA II
Cj .., 2) . A supply of goods or services to employees are
I- t\ II' t-+7f"f fl1lJ.."'C11 iJ? h fl1lJ..(\'I' h 11A I\-T
treated as supplies for consideration and therefore
It\h~1 OJ~9" h101 'P;J O;l'"f Olf~ h~1 f+(\m
f1.1f'}9" j
0+10. h~1 h'}1.+11 +"''I'~ ;l'hil may be taxed, even if the employee did not pay (or
~hLIAO;l'1A II paid less than market value) for the goods or
C- hlP&m- OOlJOl;l':F OOlAh t\1Pt-+~m- OI1lJ..1"'COm- services.
iJ? hCj h11A..,I\-T 9"Thl 3) If an employer:
U) t\1Pt-+~m- hil"'~'fP O'l'~ 1'}H11fhLt\ j
j
(a) provides an employee a cash advance,
t\) ilt\IPt-+~m- If'i t\h:"t-f1.m- hCt:1 fLOoo
IOJlfJm-'} OJ~ f+tat\T (b) pays a supplier on behalf of the employee; or
tit) 1Pt-+~m- hil"'~
h,}1.If~ OlltJ ~~~T f+(\tn-T iJ?¥'"f hCj (c) reimburses an employee
h11A..,1\-.f"f h;l'hil h4." f,}"'~ P't- h'}:" for the cost of goods or services provided as a fringe
.il?(\ ;JC f+ll'" h:"CP.f"f ill\lAlf~ ;l'hil benefit, the employer is not entitled to claim any
h4." OIJCj:fm-'}9" flltJ ~~~-I:,} OJ~ f;l'hil portion of the cost as a tax credit because the goods or
OIJtata?ft\.m~:"OT h~"fIA9" II
services provided to the emplyee are not used in
§- hlP&m- 011J:fm- iJ?¥'"f hCjh11A..,1\-.f"fI\~ (h'}1.
00'}11.~ OIJ~~"" +1ihci1& 1\1\-) f;l'hil OIJtai1?f connection with the employer's taxable activity.
i11\11 j h'}1.lltJ II\-T'} h:"CP.f"f t\1Pt-+7f"f f(\m 4) If an employer was denied a tax credit on the
h,}1.If~ h'}.lLtJ 1t\m- h:"CPT h,}"'~ P't- h'}:"il purchase of goods or services (such as a passenger
?(\m- ;JC f+ IIH h:"CPT +1.C1- ;l'hil fl1lJ..hL vehicle), the supply of those items to an employee is
1A0T h~If,}9" II
not a supply in connection with a taxable activity and
~- f+ooH10m- (\m- h;l'h(\' ~, flf~ h11A..,I\-T (0h-11
therefore is not subject to tax.
') 1m- 011lJ..i1~~ ht\.th m-il'l' fl1lJ..(\'I''} f t"hh9"Cj
h 11A.., I\-T f 00 It(\ I\-T'}) fl1lJ..(\'I' hlf~
j
h 11A.., 1\--1: 5) If a registered person supplies an exempt service
;l'hil h~hLIAOT9" II hlP&m- h;l'h(\' ~, 1\1f~ (such as a medical service at a company-run clinic) to
h11A..,t\°.f"f t\'P1\-1:rr¥'"f t\+hLt\m- ;l'hil Oh'P:( an employee, the service is not subject to tax and the
h,}"'''' tlli OOlPlT OIJi1ta?ffOlJ"'lT 0011T h~'i employer is not entitled to tax credits under Article
l m-9" II 21 of the Proclamation for tax on purchases allocable
i- fiJ?m- 'P;J h~1 Of1.lI.m- OI1lJ..L1a9"OT
1i1~
to the exempt services.
OJ~9"+ht-" Oh.t-" fm-IAHOO'}ooa;tl?f fiJ?m-
l1t\o.T OI1lJ..If'}OT
fh.t-~ m-IA(Oh'}~~T f~o. 6) Where goods supplied under an installment sale or
1i1~ m-IA 011lJ..1A Ol1lJ..m"'(\.T) f+i'fm iJ? f+oot\(\ finance lease (collectively referred to as a credit
h,}1.If~ f~o. ..,:r,- L"''fP f~Olm- (\m- iJ?m-') agreement) are repossessed, the repossession is a
001A~ t\l1IJ..lhOm- (\m- O~o. 1i1~ il9"9"~T supply of the goods by the debtor under the credit
OOlPlT iJ? h,},&;"'lO ~"'mt-IA II ilt\trl9" f~o.
agreement to the person exercising the right of
..,:rr L"''fP f~Olm- (\m- f+OOH10 hlf~ iJ?m- f~o.
..,:rr fL1aoom- (\m- f,}"'~ P't- U11T hi11A1t\001f~ repossession, and where such debtor is a registered
OJ~9" ;l'hla hl1lJ..hLIAOT f,}"'~ P't- h'}:"il?(\;JC person, the supply is made in the course or fur-
O+IIH '1':"9" I\~ 1t\00'P1\- i1IA+l;J1m Oil+.,.C therance of the debtor's taxable activity unless such
OlltJ ~~~T f+lOm- iJ? f~o...,:rr fL1aoom-') (\m- goods did not form part of the assets held or used by
;l'hil fl1lJ..hLIAOT f,}"'~ P't- h'}:"il?(\ t\0IJi1~~ the debtor in connection with that taxable activity.
h,}1.'Pt\ ~"'mt-IA II
7) The sale of a lottery ticket by the National Lottery
~- 011th.t-~ t\°+& hil+.&;1.C fl1lJ..i'fmm-fl\-+& i:h.T
h11A..,l\OT OOilmT h,}1.If~ +1.C1- ~OJ(\'&;IAII
Administration is a supply of services.
h,)~ h:"CPT O+OJ(\~ oo~ ;l'hla fDf.hLIAOT'} 8) Where a supply consists both of a supply that is
~-
h:"CPT hCj Oll.e" fOlJilhLflAh ;l'hla fl1lJ..hLIA charged with tax at apositive rate and a supply that is
OT'} h :"CPT OOlJtl)ooC f IH 011lJ..1f'} OT 1.11. charged with tax at a zero rate, each part of the supply
Oh'P:( h'}+", ~ '}o-il h'}+", Ii OOlPlT h,}1.~m- is treated as a separate supply, unless one part is
h:".CPT 'P'}~m-'} h:"CPT t\OIJ".7.I\T i\.t11A
incidental to a main supply within Article 5, Sub-
fl1lJ..L1a9"i11A1f~Oil+.,.C hl'}.&;'}~ h:"CPT t-(\.'}
f:Ft\ h:"CPT h,}1.If~ +1.C1- ~OJ(\'&;1A1I .Article (1) of the Proclamation.
,x- Iitfitli 1..1..IrAeJ,;J/.:t-;Jfl.h) ~TC lit ;l'''''''P' ~I"',} Iitfj?; '}.,... Federal Negarit Gazeta-No. 1931'IDecember,2002-Page 1981

it. O:"1'C ~A OOIPl.T +"'ffJ~' /\1\IP~~ f"7.{}m~ 9. The'rendition of services by an employee to an

1\1A""I/\oT ;J-hil f"7.hLAOT 1\:"C{1T 1\~1./\1JO II employer by reason of employment is not a supply.
I' 01\1.t. 1i16J.1" ~A OOIPl.T f"7. "'C11 'h~ O~hA ~ 10. The provision of goods on consignment and the
MI:IJO /\ "7.1P t. f"7. +1\ /\ ~ iJ:J>;J-h il f"7. hLA 0 T transfer of goods to a person in a representative
1\:"C{1T 1\~1./\1JO II capacity is not a supply.
Ili' 01\CP~ cl:1'C 'If?iitlIitfjr f+"l.;J~ fmm. :J""If:
11. The removal of goods from a bonded manufacturing
f.,.l.1' "70l.;J-~ P'C~T +L'''7. f"7.(f'}tFf~
warehouse or any supply of goods subject to an
iJ:J>~"f h"7IJOl.~ oo;J"'} m1'+~ /\101hCPf\o
m~1JO Ib/\o"f 01\CP:( 0+"l.;J~ P'C~T f"7.7fL~ export trade duty incentive scheme under
iJ:J>~"f /\101 fCPf\o'h,}1.i1'~ 01\.Tf"k1 ~il1' ~hi1 Proclamation No. 249/2001 is treated as a supply of
f"7.hLAOT'} f'}""If: P't. 'h'}:"i1:J>lI. O"7h~m'} those goods in the course or furtherance of a taxable
'£1.T m~1JO ~tJ,}~ 'h'}:"i1:J>lI. m1. +?f/\ 1.l.1{ activity in Ethiopia. If the goods are sold into the
/\"77f;J1C 'h,}1.cPf\o +1.C1~ ~m{)J;f\o II i1/\(f~1JO domestic market, the supply is taxable at the st~ndard
iJ:J>~:t:01\1C ~il1' 101 l1.7fm- OOO1.O~~ f"7i1 rate, and if the goods are sold for export 'within
hL1 ooffJ~ OOIPl.T ;J-hi1 f"7.hLAt1T~ ""I11M"f Article 7, sub-Article (2)(a) of the Proclamation, the
f"7.(f~ l1.(f'} : /\~6J.1" 101l1.7fm- 01\CP:( 1\'}.,.;t ~ supply is taxable at the zero rate.
'}o-i1 1\'}.,.;t I (0) OOIPl.T OH.e"f"7i1hL1 Ah
12. a supply of goods or the rendition of services to a
;J-hi1 f"7.hLAt1T~ ""I11~"f ~(f~f\o II
person as agent for a principal is treated as a supply
II' oml1~ i11JO /\"7.IPt. mh,A f"7."'C11 iJ:J> m~1JO
1\1A""I/\oT /\ml1~ f.,.l.O (fli ~"'mt.AII
to the principal.

g. ;J-hil f"7.hLAOT f,}""If: P't. 'h'}:"i1:J>lI. 4. Taxable Activity

li' 01\CP:( 1\'}.,.;t i ;J-hil /\"7.hLAOT f,}""If: P't. 1) For purposes of the definition of a taxable activity
'h'}:"i1:J>lI. /\+{}m~ TC1-1JO 1\L 'OIJO "7~T~'}1JO under Article 6 of the Proclamation, anything done
;J-hil f"7.hLAOT f'}""If: P't. 'h'}:"i1:J>lI.hoo1:ooc in connection with the commencement or ter-
m~1JO h"7*l.1' ;JC f"7.h~m') "7~T~1JO mination of a taxable activity is treated as carried out
0+""
+""It1C OflU- ;J-hi1 f"7.hLAOT f,}""If: P't. 'h,}:" in the course or furtherance of that taxable activity.
:J>.,.lI.'£1.T m~1JO~tJ'}~ 'h'}:"il:J>lI.m1. +?f/\ 1.l.1{
2) Taxable activity does not include:
/\"771;J1C 'h'}l.+h~m~ +""It1C~"'mt.A II
(a) an activity carried on by a natural person.
I, ;J-hil f"7.hLAOT f,}""If: P't. 'h'}:"i1:J>lI. f"7.h+
f\oT'} 1\~{,fJ.IJOCIJO!
essentially as a private recreational pursuit or
0) 01\ootf}. hobby or an activity carried on by a person other
/\""IA oo1l~~ m~1JO TC~ 1.11.'}
/\"7 It/\ ~ 0""1/\{}11 f"7. h~ m ~ 'h'}:,. i1:J>lI.~"f than a natural person which would, if carried on
m~1JO O""l/\{}11 o.h~m~ lie" 'h,}1. ""IA oo1l~~ by a natural person, be carried on essentially as a
m~1JO TC~ 1.11.'} "71t/\k1 (f~~ f"7."'m~ private recreati9nal pursuit or hobby; or
Of:C~-f"f f"7.h~m~ 'h'}:"i1:J>lI.~"f : (b) an activity to the extent that the activity
/\) h;J-hfl. ~, f+1.l.1- 1\:"C{1-f"f'} "7h~m'}'} involves the making of exempt supplies.'
f"7. {,fJ.IJOC'hil h(f ~ f: l. i1 "7~T~1JO Ibl\ 'h '}:,.
i1:J>lI. II 5. Tax on Imports of Goods
1) Except where the Proclamation provides to the
~. iJ:J>~"f m1. 1\1C l1.1~ i1/\"7.hLA ;J-hi1
contrary, the provisions of the Customs
li' 1\CP:( O+/\f u-~;J- 'h'}JLL~IJO I1Am{}~ Oi1+.,.c : Proclamation, relating to the import, transit, coas-
iJ:J>~"f'} m1. 1\1C i1/\"7i11t1T : il/\"7il+I\/\~ : m1.
twise carriage, clearance of goods, and payment and
ml.~ i1/\"7:}:}11: f1-lJO~h c.:C"7l\. -f:'} il/\"7ilL~IJO:
recovery of duty, with such exceptions,
il/\"'l.1'~ ;t-hil h~1 : f+hL/\'} "'l.1' il/\oooo/\i1
01-IJO~h 1\CP~ f+1.~11-T O"7.tilT~ O"7.mffJ modificatins, and adaptations as the Ministermay by
oooo~1 OA ~ u-~;J- 'h'}JLL~OO-: +?f1i/\~ 'h'}JLIPt. directive prescribe, shall apply, so far as relevant, to
t1T~ 'h~ hu-~;J-~"f ;JC ~'}JLtlJffJOO-f+1.l.1-T the tax charged under the Proclamation on the import
'h'}1.+mOcl: tf~~ : 1\""It111~T 'hi1I11\T~ f:l.il of goods.
OfltJ 1\CP~ OOIPl.T ;J-hi1 O"7.hLAt1T~ m1. 1\1C 2) Where tax is payable on an import of goods, the
0~1~ iJ:J>~"f I\~ +L'''7. ~(f~f\o II importer shall, upon such entry, furnish the Customs
I, ;J-hi1 f"7.hLAt1T~ iJ:J>~"f m1. 1\1C 0"7.1~OT Authority with an import declaration and pay the tax
1.11. 1\i100m.~ /\1-IJO~h t1/\P'AffJ') JLhl\t.l1.f",} ..
due on the import.
~':"l.11 'h~ OflU- OOIPl.T +1o.~'} ;J-hi1 oohLA 3) The import declaration sh'tll-
1\/\OT II
(a) be in the form prescribed by the Customs
r' m1. 1\1C f"7.1~ iJ?~"f JLhl\t.l1.f",} :
0) f1-lJO~h t1/\P'AffJ'} O"7.mil~~ :"6 f+";J1: : Authority ,
/\) m1. 1\.,C 0"7.1~ iJ:J>~"f I\~ l\.hLA f"7.1t1~'} (b) state the information necessary to calculate the
;J-hil /\"7i11\T f"tfil"ff\o 1\ilLI\1. ool.1{~"f'} tax payable in respect of the import, and
f1" f (c) be furnished in the manner specified by the
th) f1-lJO~h t1/\P'AffJ,} O+/\~ O"7.mi1~~ 1\\\:\'} Customs Authority.
f"7. "'C11 : ootf'} 1\/\OT II
1~ Iiifitl ~1.~1A ~Jt~"" .7ILtIJ '~'1'C Iii :1'1'1P' tt'l +') IiiU?i <t.,... Federal Negarit Gazeta - No. 19318/December,2002-Page 1982

g. f1--9".;.h 11t\P'AIl)'}: 4) The Customs Authority-

V) l\t\..,11C hl\1(l(J}4 11t\P'AIl)'} I1'lj lD1.h1C (a) shall collect at the time of import and on behalf
00lJ.1l1- ":J>¥'"f I\~ OhCP:.t f+Il)t\(J}4'} ;t-hl\ of the Authority, any tax due under the
fooll111111: fhl\oolJ.1.(J}4'} l\9" 'hli f;t-hl\ h4.~ Proclamation on an import of goods and, at the
00t\1 <k1'C (11t\(J}4): lD1.h1C f1l1-""'} ":J>¥'"f time, obtain the name and the taxpayer iden-
f 1\.'};i ~l\ CP.? 00111 'hli tification number, if any, of the importer, and
t\) Orl\;t- o..y."f Oh-A lD1.h1C 00lJ.1l1- ":J>¥'"f
the invoice values in respect of the import; and
I\~ l\.hLA f0lJ.111(J}4'};t-hl\ f1--9".;.h 11t\P'A
(b) shall make arrangements with the Ethiopia
Il)'}'} IDhl\o 'h'}-'Lll 0 l\11 h1\.""f-A'1 rl\;t- h1A
.., 1\0"" ~C 1:"" .? C l\ 9"9" '1"" D'/~ I..., : h t\ 0"" II Postal Services to perform functions on behalf
~. f +001\ 1i +1.1' P'C'}"" +m:J> OIJ.fl1' 'I- h l\ 00lJ.1.¥'"f
of th Customs Authority in respect of tax on
":J>¥'"f lD1.h1C 00lJ.1l1-0"" 1.H. ;t-hft-'} hOlJ.htt:~
imports that arrive through the Postal Services.
Ol\++C 01DlJ.1. '}..,~ f+I.1' D'/Ol.;t-~ P'C'}""
5) Goods covered by an export trade duty incentive
,
h'l'1: ck1'CIf~it/Iitf:H: f+HI.1--""/bI\o"f P'C'}.y."f scheme under Proclamation No. 249/2001 are not
+m:J>OIJ.fl1''I-/bI\o"f hl\oolJ.1.¥'"f lD1.h1C fOlJ.Il\1 subject to tax at the time of import, except that tax is
!l T(J}4 ;t-hl\ h~hLAI1T(J}49"11 payable upon import if the importer is covered by the
}. h .pc (1"" +hli ID'I fOlJ.I1A 0"" 1.H.
duty draw-back scheme.

li' ffUJ 1.,}11h'}+?\ (r) '}o-l\ h'}+?\ r O~o. 7i11if!' 6) Time of Supply
(J}4A f + if m ":J> f +00 t\ II 'h') 1.11''1 f":J> h.pC (1""
1) Article 3, Sub-Article (6) of these Regulations, treats
'h') 1.11''1'h'}1.0000~mC loot\h;t-Aul\t\I1''19'' h.pC(1"" the repossession of goods under a credit agreement
+LOOO fOlJ.I1t\(J}4! .
as a supply of the goods. The supply occurs:
V) ":J>¥':t: +00l\7i 0+1.1.1--0"" +'}: 1D~9"
t\) O~o. f1tf(J}4 1l(J}4OD'/liT(J}49" /bl\ ih.., O~o.
(a) on the day that the goods are repossessed, or
7i11if!' (J}4~ 1 t\ 0"" .., ~;t-li 0011"" 'h') -'LOli
(b) when the debtor may, under any law, be
f+1.1.1 hl1''1: OH.tJ ,}~'1i: ih.., o~o. f1tf(J}4
1l(J}4 .., ~;t-li 0011"" 'h'}-'LOli h + 1.1.10"" reinstated in his rights and obligations under the
foot;Q,l.if +'} +1'1\0 11t\(J}4+'}: '1(J}411 credit agreement, on the day after the last day of
I' fhCP:.t h'}+?\ g '}o-l1 (it) ;t-hl\ fOlJ.hLAO""
h'}+?\ any period during which the debtor may under
f,}"'~ P'1r 'h'}.pl\:J>(J. (1D~9" ;t-hl\ fOlJ.hLAO"" such law be so reinstated.
f,}"'~ P' Ir 'h'}.pl\:J>(J. hkA) Ooo,}+"'+l\ I\~ 'h'}.';t\ 2) Article 4, su1r-Article (9) of the Proclamation treats,
~C1:"" f+I\t\L 'h,}1.11''1 f":J> h.pC(1"". 'h'}1.11''1 as a supply of goods, the transfer of a taxable activity
'h,}1.OIJ.~mC loot\h;t-Au l\t\I1''19'' h.pC(1i: +LOoo (or a portion of a taxable activity) as going concern.
fOlJ.I1t\(J}4 O'}o-l\ h'}+?\ (it) 001P1."" foo+I\t\~
The supply occurs when the transfer under that sub-
+.., 11C fl.L09" 'I(J}4
II
Article (9) occurs.
r' fH.tJ 1.,}11h'}+?\ r '}o-l\ h'}+?\ (Ili) OhCP1:<k1'C
3) Article 3, sub-Article (8) of the Regulations, treats
If~it/Iitfjr f+HI..?(J}4 flDlJ.1. '}..,~ f+I.1'
the removal of goods subject to an export trade duty
D'/0 I.;t-~ P'C'}"" + L 'OIJ. fOlJ.I1',) 11T(J}4 ":J>¥'"f
incentive scheme under Proclamation No. 249/2001
f+ifm- 'h,}1.I1''1 (Oh1C (J}4l\1' 101 I\~ f+ifm-""')
lif!'9"C) 01\.""f- A-1 (J}4l\1' ;t-h l\ fOlJ.hLA 0"" 'h'}.p (incluqing a sale into the domestic market) as a
l\:J>(J. OD'/h li ID') ,£1."" ID~9" ~tJ,} 'I- 'h '}.p l\:J>(J. supply of those goods in the course or furtherance of
ID1. + if t\ 1.1.j{ t\D'/if.?1 C 'h ') 1. cP~ + f.C1 (J}4'h ') 1. OIJ. a taxable activity in Ethiopia. The supply of those
~m';' loot\h;t-AII h.pC(1i: +hlilD'1 fOlJ.I1t\(J}4 goods occurs when the goods are supplied in the
":J>¥':t: t\h1C (J}4l\1' 101fl.(J}4~ 1D~9" t\(J}46J!' 101 domestic market, or when the goods are exported, if
fl.I\ h- ~l1'liAII they are supplied for export.
~t- f h .pC (1"" 'h (J."" 7. Value of a Supply
li' t\h')~ f+t\f 1.,}0~ OA~ hl\+lf"" f+llm I1AI1''1 1) The value of a supply may be reduced by any price
Ol\++C ":J>(J}4 0+1.00"" 1D~9" h1A..,I\oi: O+ll
discounts or rebates allowed and accounted for at the
mO"" 1.tI. 0'£"'11 O;t-f(J}4 fCP.? .pli7i 1D~9" fCP;J
time of the supply of goods or the rendition of
+00l\1i oom'} fh.pC(1i: 'h(J."" l\.+'}l\ ~"fl\AII
h.pC(1i: h+LOoo O~I\ fOlJ.1.I..., 'fCP.? D'/l\+l1hl
services. Post-supply price adjustments must be
OhCP:.t h'}+?\ Ir 0+1.'111(J}4 001P1."" 0'£"'11 accounted for in accordance with Article 13 of the
oo;t-f"" ~ljCO;t-A:: Proclamation.
fh.pC(1i: CP.? OhCP:.t f+Il)t\(J}4'} 'hli +t\~.y. O'£lHf 2) Where a portion of the price of a supply represents
I'
1 A;t-f (J}4');t-h l\ fOlJ.II1..,...,. hII' 'I : f h .pC (1i: 'h(J."" tax imposed by the Proclamation that is not accoun-
f 0IJ.11' 'I
(J}4 h cP.?(J}4 1\ ~ 0 cP.?(J}4 (J}4l\
l' f +11++(J}4 ted for separately, the value of the supply is the price
f;t-hl\ oom') ++'}f\ ~l1'liAu reduced by an amount equal to the product of the tax.
 st
1A"Iif.it~ ~I.t-~ ~:MT .7",11)~1'C Iii ;J-UUfP' ~I"" liifj?i '}.,... Federal Negarit Gazeta - No. 1931 December, 2002-Page 1983

f+ooH10 f1dJ4f ;J-hh :"'i7i J'111}:fdJ4"} iJ:J>?'"f'h'i 3) It' a registered person converts a portion of, or an
1:"
1\1A..,I\--f"f OOD-fr m,,1}" OhkA ;1'hh hOl/.hL entire good or service from use in a taxable activity
to a different use and the person was allowed a tax
AO+ f"}"',(- r to 'h"}:"h:J>~ dJ4(JJ. It "''' +.., I}C credit in respect of the acquisition of those goods or
J''PI\:fdJ4 'h"}1.If~ f1\'P:( 1\"}+1\ § "}o-h 1\"}+1\ (ID services, Article 4, Sub-Article (2) of the
OlttJ ,,,~+ It+ltf 1':"1}" f'Pfr iJ:J>?'"f'i 1\1A"l Proclamation treats the change in use as a supply of
I\--f"f ;J-h h 001/.hLA 0:" f"}"',(- r to 'h"}:"h:J>~ the goods or services in the course or furtherance of
8£1.:" m,,1}" "tJ"}~ 'h"}:"h:J>~ m1.+iflt 1.l~ It''7o a taxable activity. The Minister of Revenue may
;J1C 'h"}1.'P1\- 'h"}1.OI/."'mC J'oolth;J'Allf1n.sP:Y' issue directives on the value of a supply resulting
OI/.tll:"C OlttJ "}o-h 1\"}+1\ OOlPl:" It"''' 1\1A from a change in use under this Sub-Article,
..,1\-+ f'P I\- 1\:"CP-f:f"} 'h~:" fOl/.m h"} 0000 I,J' 4) The value of a supply of goods under an installment
ft.J'mllJ ,,"f"AII sale or finance lease (a credit agreement) is the cash
g. fiJ:J>dJ4 'P;J, htj:1 Of1.tI.dJ4 OOl/.LOI}"0"" 7iJ'6f.b value of the supply. The "cash value" , in relation to
m,,'" +hto," Oh.to," fdJ4A Hoo"} ooIJJ.lif fiJ:J>m.
supplyof goodsunder a credit agreement,means -
I1ltn.+ 00l/.1f"}0:" fh.to" dJ4A (f~n. 7iJ'6f.bdJ4A)
(a) where the seller or lessor is a bank or other
financial institution, an amount equal to the sum
f"t+CIt iJ:t'?'"f 'h~:" f1\:"CP.y."f f1't. 1"}tHI
of:
'h~+ ~dJ411O~n. 7iJ'6f.b dJ4A fOl/.+C It iJ:J> sP"f " (i) the consideration paid by the bank or other
:,. fOl/.h." fr:" .(-I}"C
f'l' ~ 1"}Hl1 'h~:"" "7 It financial institution for the goods, or the
,,1f'iAII market value of the goods, whichever is
0) ifQ;k m,,1}" 1\hto," I}"}h m,,1}" "''' f4-"'i"}h the greater, and
+*". 0"t1f"}0+ 1..tf.= (ii) any consideration for erection, construc-
(i) I}"}h- m"". f4-"'i"}h +*1}" ltiJ:J>sP:Y' tion, assembly, or installation of the goods
"'''
fLOoodJ4 :"hhlt~ htj:J' m,,1}" fiJ:J>sP~ borne by the bank or other financial
f10J' 'P;J hu-Iti: htj: J'ltdJ4='h'i . institution; or
(ii) I}"}h m,,1}" f4-"'i"}h +*1}" m(JJ.dJ4"} (b) where the seller or lessor is a supplier, an
"'''
f1iL~dJ4 fiJ:J>?'~ f+h"= f..,"}I};1' 'h'i amount equal to the sum of:
f oo1l1Jm I}"r to m(JJ.=m,,1}" (i) the consideration for which the goods are
It) ifQ;k m,,1}" 1\hto," "''' 1\:"ton. flf~ 'h"}1.If~=
normally sold by the supplier for cash; and
(i) 1\:"ton.dJ4 0001.0~ 1\L'O". iJ:J>?'~"}'h';
(ii) any consideration for erection, construc-
tion, assembly, or installation of the goods
O'h'; f"to'l'O:" 'P;J= borne by the supplier.
(ii) 1\:,. to n.dJ4 It +h" = It..,"} I};J- 'h'i It 001
5) Where the debtor is deemed to make a supply of
lIJml}" ImllJdJ4 mt;Ll,=
goods under Article 3, Sub-Article (6) of the
~. 01t0 1."}11 ~"}+1\ I: "}o-h 1\"}+1\ (I) oolPl:" O~n. Regulations as a result of the repossession of goods
..,:tr dJ4A f+1tf iJ:J> ltifQJ; oooooltf1- O~n. f1tfdJ4 under a credit agreement, the value of the supply is
iJ:J> 'h"}.c;+l 0 fOl/.'" m C 1\ If"} f 1\:"C Pi: 'P ;J iJ:J>dJ4
= an amount equal to the balance of the cash value of
0+ooltf10:" 1.tf. +001\7i J'A+'.l1dJ4 f'l't. 1"}Hl1 the supply that has not been recovered at the time of
+1, 8£l111,,1f'iAII the supply.
I" O"}o-h 1\"}+1\ (~) f.,.oolth+dJ4 f1\:"CPi: +1, 8£l111 6) The balance of the cash value of the supply under
f~n. 1:trdJ4 O~n. 7iJ'6f" dJ41\-oolPl:" fhLltdJ4 sub-Article (5) is the amount remaining after deduc-
8£l111h~+CPi: 'P;J h"'+~f1 0:\" fOl/.+ldJ4 ting from the cash value so much of the sum of the
"" m1'i"f payments made by the debtor under the credit
"dJ4I: Ooolf~'" OdJ4fr oolPl:" "''P'P''
1}":fdJ4 0011+'i ..,1-..;J- oom"} f+h4-LltdJ4 8£l111 agreement as, on the basis of an apportionment in
O"t1.Cl1:fdJ4 Ah f1\:"CPi: f'l'~ 1"}Hl1 'P;J If'i
accordance with the rights and obligations of the
parties to such agreement, may properly be regarded
ft.m (t.(- ,,"fi\ A II
as having been made in respect of the cash value of
1" fm"'. "}..,.(- f+l1' "70l;J-~ rc,:" 1\'P'; <k1'C
the supply.
If~i/!ifjl:+L'''t f"tIf"}I}:ffDoi
7) The value of goods subject to an export trade duty
0) lt~10J'f+lltim,,1}" incentive scheme under Proclamation No. 249/
It) O~.,C dJ4h'l' 1t7iJ'6f.bf'Pfr ~1C ..,"} m1. dJ46f.b 2001:
IA.,.I\h- iJ:J>?'"f'P;J f101 'P;J "1f'iAII (a) that are removed for export, or
~" 0~'P:q: 1\'"}+1\1
"}o-h 1\"}+1\ (ID(oo) OOlPl:" 0tf.C' (b) are supplied but not exported is the market
MhhLI Ah f"t+"lttj:"} f1oo"}+l1+h
.(-c:E-+f"t,1f f1dJof h11fdJ4 iJ:J> dJ4h'l'.,...,I}C "" J'1t
hkfr"} ;1'h h 8) Article 4,
value of the goods
Sub-Article (11) of the Proclamation provides
It-LhLAO+ .., ,,+ ..."If"} It " J''PltdJ4 that where the recipient of a zero-rated transfer of a going
'h"}1.If., flUJ '''''-f~ 1\:"CP-f:f, 1:trdJ4 ;1'hh concern under Article 7, Sub-Article (2)(d) of the
O"thLAn+ f"}"',(- rto 'h"}:"h:J>~ 8£1.:" m,,1}"
Proclamation, acquired some.of the good~ in that transfer
for a pUI1loseother than to make taxable transactions, the
"tJ"}~ 'h"}:"h:J>~ m1..,.iflt 1.l~ 1t"70;J1C 'h"}.c;'P
1\:fdJ4 'h"}1."t "'mC f 1\'P:( 1\"}+1\ § "}o-h 1\"}+1\
acquistion of those goods is treated as a supply of goods
by the recipient in'the course or furtherance of a taxable
(!l!) 11.""';JA II activity.
i' Olt" 1."} 1\"}+1\ 1 "}o-h 1\"}+1\ (~) f.,.oolth"'dJ4 9) The value of the supply under Article 7, Sub-Article (8)
~ :"Cf1+ 'P;J"dJ4 ., 1\- fOl/.m "1.dJ4 ;J-h h fOl/.hLA of these Regulations shall be the ,consideration for the
oT"} f1,",,g- rto 7t"}:"h:J>~ Itoo..,tf:" h+LOoodJ4 acquisition of the taxable activity, reduced by an amount
htj:1 f1'~ r to 'h"}:"h:J>~dJ4 'h"}-'ldJ4A 1t;1'+ which bears to the amount of'such cOl1sideratinthe same
1.0+ ""m~1)1\ .,...,l1c h+hLltdJ4 m(JJ.
n..,.(- pi~ 7\"}:"h:J>~;J-hhfOl/.hLAO:" "'11":" "" Ittlu- ratio as the intended use or application of the taxable
activity for making taxable tral;1sactions.bears to the total
qA 'P I\dJ4 oom" ++"} (\ f"t +lC1J4 ., dJ4 r: inten~ed use or application ofti)e. taxable activity.
1~' H!f..it~ tofo6-A 'J:Jt..,. ;Jun, ~'I'C Ii! ;J-UUfP- ?)g +'} !:i!f1?il}.jI". Federal Negarit Gazeta - j'.jo. 1931'\ Decemoer, 2002-Page 1984

{1;. f'1J!..;1- mft9" f"~f.;f'J"" 9"1/111 J.~ ~C~1: 8. Obligatory or Voluntary Registration and Procedure
j;. f;J-hil h~~ :1'hil fOlJ.hLAO"" "'11~"" OnfJ'~ 1) The Authority may waive the requirement under
n,}"'1\ Ii '}o-il n,}"'1\ (6) h+ool\h+m- f1'}HlI Article 16 of the Proclamation to register where the
oom'} f~OAT w~9" '\'OA1' fOlJ.':j-A oolf~,}
Authority is satisfied that the value of a person's
f :1'h ft- 1ll\P' A tlJ'} 1 00 ~0"" n.1f'} 9" l\ OIJ.h+ 1\-""
taxable transactions exceeds or will exceed the
9"h'}I+':j- :1'hi} h~~'} h9"11111 ~, ".IY.C1m-
~"fl\A ; amount specified under Article 16, Sub-Article (1)
u) O:1'hil h~~ fOlJ.hliw~m- :1'hil fOlJ.hLAO"" of the Proclamaton solely as a consequence of-
f,}"',(- P't. h'}:t>il:J>(J.h+*lm : w~9" f,}"''(- (a) a cessation, or substantial and pennanent
P't.m- h'}:t>il:J>(J. n:t>9" h Ii il~"" 0 htt:+ ~ 1.l'R reduction in the size or scale, of a taxable
hli OHI\et~"" hf.,.Hl h~1. w~9" activity carried on by the person; or
l\) O;J-hil h~~ OOlJ.hliw~m- :1'hil fOlJ.hLAO"" (b) the supply of capital goods that are being
f,}"',(- P't. h'}:t>il:J>(J. '1.1."" 01':t>9" I\~ replaced with other capital goods to be used
fOlJ.m-I\- f'l'C;J-A t'):J>sP"f'} l\00+11"" fOlJ.m-I\-
in the taxable activity carried on by that
fl11:;J-A t'):J>sP':j-
n:t>cn"",l\ h,}1.If~ : ~m- ::
person.
~. OnCP~ n,}"'1\ I~ '}o-il n,}"'1\ (2) 9"1I111m-fOIi
fOlJ.If,}0"" .,.'} + 1.'}..,~A :: +001l;J n.m- 9"1I111m- 2) Article 18, Sub-Article (4) of the Proclamation
fOlJ.~liO""'} .,.'} ".ooCT fOlJ."fA n.1f'}9" : f;J-hft- provides for the date that registration becomes
1ll\P' A tlJ'} l\ t.ft- 9"h'} 1+"f 9"1I111m- h 'I.1111~001: effective. While the registering person may select
00"f.00&1 "f.9"C':fOIi h'}JtIf,} ".wil'} ~':j-I\A :: the date that the registration is to become effective,
g. n'I'~mA 1111000011111 the Authority, in its sole discretion, may change
(i. l\nCP~ nL'09" fi-ooH10 (}m- hli O+limA fi'oo that date to the beginning of an ~~so~n~i9gpe,riQd.,
H1~ ftLrr (}m- f,}"',(' P't. htt:I\o"f h'}Jtrr9" 9. Divisional Registration
Oi'limA fi'ooH1~ fn'}.(- f+ooH10 fJ''i oo/o..}- 1) A registered person and its separately-registered
nI1A flf~ htt:l\o':j- ..,'}~~..,. I1\Tm- (}sP"f If~m- division, and separately-registered divisions of a
~~mt.I\- ::
g. O'I-limA head office registered person, are "related per-
f+ooH10 f,}"''(- P't. h'}:t>il:J>(J.nl1A
sons" for purposes of the Proclamation.
~

Ohl'}.';'} J;. f:1'h il Hoo'} f +Q;1.0IJ& h(J."" :1'h il OIJil:1'

2) A separately-registered division must file a VAT
wetl OIJ:t>ll1nl\O"" (fnfJ'~ n,}"'1\ t}}) :: hl,}.';1~
return for each accounting period (Article 26 of the
O+limA f+ooH10 fn'}.(- f,}"''(- P't. h'}:t>il:J>(J.
Proclamation). Each separately registered part of
nl1A f+oPH10 (}m-Il\O"" ..,YV:1'SP"frrl\- fOlJ.tf~""
the entity is subject to all of the obligations imposed
l1.1f,} : ffJ'lim- .(-C~..,. nl1A h,}1.If~ ~"'1'I\A ::
on a registered person, but it remains a part of the
f.
~ fi,ooH10 (}m- h,}1. n'}.(- .(-C~..,. oo001l1~
entity.
f'''~OIJ& h(J."" :1'hil OIJil:1'wetl OOlJ:t>ll1 hli I\.l\°"f
3) A registered person may apply for divisional
f :1'h il ..,Yv:1'sP"f'} 000 L~ 9" l1.(- htt:+~ w tJJ.
registraton if a single registration requiring a single
fOlJ.lilh""AO"" hlf~ f,}"',(- P't.m- nl1A flf~
VAT return imposes an onerous compliance bur-
htt:l\°"f O+limA h'}JtooH1~l\"" oomf:t> ~"fl\A ::
den on the registered person. The Authority, in its
f:1'hft- lll\P'AtlJ,} ftLU ~~~1: 1'1<1: l1."'ClIl\""
sole discretion,' shall decide if the applicant will
n '}.(- f:1'h il OIJil:1'wetl OIJ:t>ll1 h Ii 1\.I\o"f f:1' h il
experience real difficulties in submitting a single
"'YV;J-SP"f'} OOL09" 0+OOH10m- (}m- I\~ O..,.hhA
VAT return.
"f..,C fOlJ.lilh""I\- oolf~,} OOC9"r: m-Uf). ~(}tlJA ::
4) A registered person may request that some, but not
2' f+OOH10 (}m- h'}"''(- P't. htt:I\o~ m-il1' hLI\o~ all divisions be registered separately, and those not
n+limA h'}JtooH1~l\"" fmf'" h,}1.If~ : fi-'imA
registered separately treated as part of the entity's
9"1I1111A+mf.,.llTm- OfJ'lim- .(-C~..,. P'C h'}1.+
registration. ..
OOH1~ If~m- ~"'TI\I\- ::
5) The Authority may withhold any refund under
~. f:1'hft- lll\P'AtlJ'} OnfJ'~ n,}"'1\ t;'?; '}o-il n,}"'1\
Article 27, Sub-Article (5)(a) of the Proclamation
~(u) f+oPl\h+m-'} +00l\1i '1.1111n+limA l\+ooH
to a separately-registered division in order to satisfy
10m- :1'hil h~~ hoPhLI\- 0,(,"" ftLrr :1'hil h~~
the tax, levy, interest, or penalty payabl~ by the
htt:I\o"f f..,l1C : f :1'hil : fwl\.(- W~9" foo.,.65A,t')J;
entity or another division.
fl\.l\llTm- 0011')',} OIJl;J1T nl\O"" ::
6) Supplies made by a separately-(egi$tered division
't. O+limA f+ooH1~ htt:t\-"f l\'l'lim- 00/0."" w~9"
~
to the head office or between separately~egistered
n'}J;.l\I\.I\m- fOlJ.I"'C!J.Tm- iJ:J>sP"f
hli fOlJ.(}i\1.Tm-
divisions are treated assupplies between related
n 1 A.., I\o+"f l\:1'h il ~I\OIJ ..,'}~ ~..,. II1\Ta). (}sP"f
persclnsfor tax purposes, the supplier must issue tax
ool1hA h'}1.+1.l.,. It:t>CP+"f .e.~mt-tr :: ill\If~9"
invoices for those transactions in aecotda11cewith
n:t>t.n.m- l\h~tLU ..,lIU"f f:1'hil Y.l()~ ooilm""
the Proclamation, and the" r~ipl~nt can claim tax
1l\0-1- l1.1f,} i 1:rrm-OnfJ'~ It,}"'1\ t;'(i n+L"'1.m-
credits 0\\ the purchases to the extent"provided
oolPl-1- :1'hft- h'}.tl"'Ii~ill\"" oomf:t> ~"fl\A :: .
under Article 21 of the Proclamation.
1~' IuY-'if?; ~1..t-A" ;J(.'''' ;Jtt.''1 ~1'C Iu :1"UUfP' tll .,.") Iifj?; ~.,... Federal Negarit Gazeta - No.1931'I December, 2002-Page 1985

~. f+OOtl10OJ- fJ'tj 00/0."" O+tjmA 0+OOtl10- ht;:A..";f 7) Expenses allocated by the head office to a separately-
h 'n C 0 mt;Ll. .,..,. fDt"tI OJ- 'll1-o fJ'tj OJ- 00 /0."" registered division may be treated as taxable supplies
f LfJooOJ-;J-hh fDthLAO'-" h:"C(1""If'f "-'mt-A II by the head office.
~. 0+OOtl10OJ- fJ'tj 00/0."" "htj O+tjmA 0+OOtl10- 8) Transactions between the head office and separately-
ftLlI- hl1A fPt- ht;:A..";f m,,9" OPt- h~",,";f registered divisions, or between separately-regis-
ool1hA fDtLfJooOJ- ..,-0,,-1- OhfJ'~ h,}"'f\:t; O+OOA tered divisions may be closely scrutinized by the
h+OJ- OOIPI."" +10. IAIf., f;J-hll '1':"9" A"7"'1"" Authority to prevent the use divisional registration to
"h'}~"OJ-A Aooh"hA f;J-h{}. I1APAIIJ'} f:"C-o
obtain unintended tax benefits referred to in Article
h ..,...,.A "71:1..., h A0"" II
60 of the Proclamation.
9) Separate divisional registration is discretionary with
ii' O+tjmA fDt1.I..., fPt- h~A..";f 9""H111 f;J-h{}.
I1APAIIJ'} {1"L:"1:-o;F fDthtjm'} hAlf., f A+tjmA . the Authroity and, to be eligible, the head office
applicant must satisfy all of the following con-
9""H111 -o-h AOOIf'} cptjOJ- 00/0."" fDth,,'I\-""'}
ditions: .
"7".7.""" "'f CO;J-A ;
(a) The applicant must be a registered person for
0) hooAI1~ OhfJ'~ h,}"'f\ !~ OOIPI.""nL:J>1.~"""
VATpurposes, but not a person who volun-
fDtOOtl1-o l1"If'} A+QJ."7t "hiL"" ;J-hll foooo
tarily registered under Article 17 of the
"H1-o ..,1o;J- IAO"" 001f'} hAO"" ;
Proclamation;
A) "7ooAh;FOJ- Of\m.~ If'f f f;J-hh h4."'} ooAI
(b) The application must be in writing and include
ck'l'C 'htj f+QJ."7t "hiL"";J-hh f9""H111f9"llhC the applicant'-s taxpayer identification number
mI."''''' ck'l'C 00 1"H hAO"" I and VAT certificate number;
th) hooAI1~ f'}..,1: Pt-OJ-'} 01:C';"" Mt9" fDtlh (c) The applicant must conduct its operation as an
tj OJ-"OJ-00 If'} h A0"" ;
incorporated company;
00) hOOAI1~ Am:""" f'}..,1: Pt-OJ- h,}1: f;J-hll (d) The applicant will experience an onerous com-
"7h;J-m<t1 "7:"1.0- ht;:+2j= mt;Ll. fDtI11h"" pliance burden if it must submit a single return
AO"" oolf~,} "711I.~"" hAO"" II hooAI1~ for its entire business operations. The applicant
f.f'tjmA 9""H111I1"L+1: fDtI ;J'I'ooOJ-'} ";f..,C must describe in detail the problems likely to be
"htj Am:""" f'}..,1: Pt-OJ- 0"h1'}~'}~ f'll1-o encountered if divisional registration is not
tloo'} f+m:J>AA f;J-hh "7h;J-m<t1 O+OJ{l"OJ- approved, and the reasons why a consolidated
1.tI. OJ-h'l' "7:"1.-0 f"7 ,,";fA O..,.'} 9"h,} ''''' . VAT return for the entire business for each
"7 h I.~"" h A0"" I accounting period cannot be submitted by the
IP) O+tjmA "h'}"lOOtl1-o f+mf.,.A"" f'}..,1: due date for each .tax period;
P t-OJ- h~A f t-{}. f'll1-o hll"H PC,"" IAOJ- (e) The division for which separate registration is
00 If'} hA 0"" II tj mt;Ll.OJ-'} requested must maintain an independent ac-
"09" f P t- h t;:1\-10.
nt-{}. fDtOOtl1-o "htj hl\.",,";f f P t- ht;:A..";f counting system. This requires the division to
f"'Af f'll1-o 00..,A6IiJ. fDtIt1;J'; 001f'}'} record its receipts and payments and produce
"m":J>A; financial statements separate from its head
I.) hooAI1~ 'll10-'} h"7m:J>AI\- O~..,. "h1'}~'}~ office and/or other divisions;
"h,}"l'fI.OJ- /1.1.1 (f) The applicant must already be preparing
h~A ft-{}. f'll1-o PC'''''
001f'} hAO"" I divisional accounts before consolidating them.
(g) The division for which separate registration is
ll) O+tjmA. 'h,}"lOOtl1-o f+mf.,.A"" fPt- ht;:A
requested must be separately identified by
0 '}..,1: P t- "h'}:"h:J>iLOJ-,,,.,..,. 'htj ODt1~ 0""
(1;J- +AM fDt;J-m:" 001f') hAR"" ; reference to the nature of its activities or its
location;
if) f'hI'}~'}~ fPt- ht;:A f'll1.o hll"H PC''''' 'htj
(h) Each division must use the same accounting
00"H1.1OJ-.,.'} h,}1: ,,,.,..,. 001f'} hAO"" II
period and the same year-end date as the entity.
!. f;J-h{}." I1APAIIJ'} f+tjmA 9"11111OJ-'}h"7f\1.-h
10) The Authority may impose additional conditions before
O.c."" OtLO 1.'}.o h+tll.tI~"" 1\." +QJ."7t lI-~;J-,.";f
approving an'"application for divisional registration, or
'h'}"l ".7.1\- A00 m f:" "htj h"lh ADt OOtl1.o 1:C';""
may impose different conditions on a newly-registering
f+A" :"1:00 lI-~;J-,.";f "h,}"l'f~ A.11.C.., ,,";f"A II entity.
Hi' f+OOtl10 {lOJ- A"hI'}~'}~ O+tjmA "h'}"lOOtl1.o 11) The registered person must file a separate application
ADtm":"O"" fPt- h~A f+Af "7ooAh;F "7:"1..0 for each division seeking separate registration on the
"htj o:"~ f;J-h{}. qAPAIIJ'} fDtm""'OJ-'}
"" form and containing the information required by the
ool.)f 00""""" hAO"" II h"lh f9""H111'I'1cf: fDtI Authority, or a newly-registering person must submit
+c.o {lOJ- f9""H111 "700Ah;FOJ-'} 'htj f+tjmA an applicaton for registration and an application for
9"11111"7ooAh;FOJ-'} Oh'}1:.,,,,, A.1+C.o ,,";f"A II divisional registration at the same time.
'lA" Iif'" ~1..~l\ );J&"" ,?1L"14J1'C Ii ;J-UUfP'.gli+1 Iilfj~ '"f". Federal Negarit Gazeta-No. 1931I1December,2002-Page 1986

II" ~1'.c;,~ O+limA f"'ooW'O fJPt- h(j:A f'Plim- 12) Each separately-registered division will be issued a
~.C~..,.. "I1A OOIf).' ftPJ.11t~ f;J-hll h4.~ 00/\1 taxpayer identification number and VAT certificate
ck'1'C ~Ii f+aJ.",.t ~I\"'" ;J-hll frllhc ml+"'" number that identifies it as a division of the entity.
ck'1'C~"'m'PA :I 13) Each registered division must issue tax invoices
Ic" ~1'.c;,~ 0+1imA f+00"10 f JPt- h(j:A f t-fl-,
listing its unique taxpayer identification number
f+/\f f;J-hll h4.~ 00/\1 ck'1'C~Ii f+aJ.",.t ~(\..,..
and VAT certficate number.
;J-hll frllhc ml"'''''' ck'1'C f1" f;J-hll 1.l"'~
II
14) For purposes of the registration threshold under
oollm"'" "/\0"'"
Article 16 of the Proclamation, the supplies of each
Ii" 0"'P:4: ",.,." Ii /\+00/\h+m-/\r1l1'1 oflcfl/\tPJ.11.
C1m- f1'"ofl oom' "mlt..., f~1'.c;,~ O+limA separately-registered division are included as sup-
f+00"10 fJPt- h(j:A "e}>Cf1"'"f'Plim- ~C~..,.. plies of the entity.
"e}>Cf1"'"~'1.If~ ~"'mt-A II 15) The Authority may require the allocation of tax
I~" f;J-hfl- '1/\JPAtIJ' 0"'P:4: ",.,." 3'l! ,o-ll ",.,." credits under Article 21, Sub-Article (22)(c) of the
1("') f+L.,.1.m- f;J-hll "''''Ii~ll 0~1'.c;,~ fJPt- Proclamation to be made on an entity basis, rather
h(j:A It~If' 0'P1im- 00/(1"'" 1.l~ ~'-\hlim'
than on a division-by-division basis.
/\", ~l'" ~"f"A :I
16) The home office registered person may apply in
Ii" f+00"10m- 'Pli 00/(1"'" O+limA f+1.l1m- f"'~ writing for the cancellation of the separate regis-
fJPt- h(j:A r1l1'1 ~'-\lPl1l I\.m~e}> m~r
tration of a division, or the Authority may initiate a
f ;J-hfI- '1/\JPAtIJ' Ot-fI- ~It1i~..,.. f+1i mA
" cancellation of a divisional registration. The
f01I1'1m- ~'-\lPl1l "'~l'" ~"f"A IIr1l1'1 0tPJ.1P
l1l0"'" 1.", ftPJ.h+I\-""'1.'f1"f +L"tPJ.~"'"~lflil\- i following rules shall apply:
U) f;J-hfl- '1/\JPAtIJ' hfLtJ 1~'" 1.", ~'-\If' (a) Unless the Authority approves a shorter period,
I1AL"'1. Oll+.,.C f"'~ fJPt- h(j:A f+limA the separate registration of a division must
r1l1'1 /\0-/\"'" '00"'" fBIi Iflf oo.,.f"'" "/\0"'" i remain in effect for not less than two years;
/\) ",Ii:fm-r ~C~..,.. m~r O+limA f+00"10 (b) If an entity or a division ceases to satisfy any of
h(j:A f+limA r1l1'1 OtPJ.L"'~'1:fm- o-~;J-~"f
the conditions imposed on divisional regis-
ooJPt-1:, 1~lm ~'1.If~ 'Plim- 00/(1"'" fo-~
tration, the entity must notify the Authority in
;J-~:r: 00".7.""'"00'" ml\- h+~ lm 0"'" .,., ", ll.,.
writing of the change within 30 days of the date
Or!) .,., 1."' m-ll'1' ~tJ')' /\;J-hfl- '1/\JPAtIJ'
O",h.(j: ", ll;J-m~ ,,/\ 0"'" I any condition to be met;
(c) The Authority may cancel a divisional regis-
"') f;J-hfl- '1/\JPAtIJ' f+limA r1l1'1 ftPJ.Le}>~
'1:fm- o-~;J-~"f 00".7.""'" oo~lm-' 1m.,. tration if the conditions are no longer satisfied
~ ') 1.1f~ m ~r JP ltf m- f;J-h fI-, 1 f1. /\00 m (Ie}> or if the Authority believes that cancellation is
"llL"1. ~m- ofll\- fL1r, r1l1'1m-, /\001Pl1l necessary for the protection of the revenue;
~"f"A I (d) The Authority shall have sole discretion to
(0) f;J-hf1. Q/\JPAtIJ' fJPt- h(j:A f+limA f01I1'1
<;letermineif the divisional registration shall be
~'-\"''1'A m~r ~'-\~l'1' /\"'~l'" ofl:f2i' allowed to continue;
JPAtIJ' "/\m- I
(e) The cancellation of divisional registration shall
IP) fJPt- ht;:A f+limA f01I1'1 JPltf fBIi
be effective from the date specified by the
ftPJ.If~m- f;J-hfl- '1/\JPAtIJ' htPJ.mll~m- .,.,
Authority .
"f.rr: ~IfIiA :I
1" ''''''711 ODIP~lI 10. Cancellation of Registration
i. f+00"10 (am- ;J-hll ftPJ.hLAO""" "'ofl~"'" l1~l 1) A registered person must apply for cancellaiton of
mO"'" .,., "f.rr: Oe!).,., 1."' m-ll'1'r1l1'1m- ~,-\ registration within 30 days of the date the person
IPl1l ",ooAh;J= ",e}>lofl"/\0"'" II
ceases to make taxable transactions.
I. O')o-ll ",.,." (Ii) ~ '-\lPl1l
oolPl"'" r1l1'1
2) The application for cancellation under sub-Article
f"t"'Cofl "7ooAh;J= O",h.(j: ooe}>~ 1/\0"'" fLlf' f
(1) shall be in writing, shall state the date upon
;t-hll h4.f. ;J-hll ftPJ.hLAO""" "'ofl~"'" 1~lmO"""
.,., ~Ii ;J-hll h4.f. "'ofl~1:' l1~lmO"'" .,., "f.rr: which the person ceased to make taxable transac-
Q/\m- fIlmc 1.", m-ll'1' ;J-hll ftPJ.hLAO"'" ..,ofl.e;+ tions, and shall state whether or not that person
l\"7hlim, OOIf' 1/\001f.,.' ftPJ.1A" OOIf' intends to make taxable transactions within 12
''''1.
1\/\0"'" II months trom that date.
'l~' Hil'it?; t..fulrA ~;J~'''' ;JlI,111 ~'I'C Iii ;rUUfp' ?)g<I>'}Iiif1?i'}'9". Federal Negarit Gazeta-No. 1931'1 December, 2002 Page 1987

r' f;t'tJl't- I1ftP'AITJ'} ;t'tlil h4-~ ;t'tlil fD?ht.AO"" 3) The Nlthority shall appmve anapplicaiton for the
..,-fl.f,'''' OYhliOJ'}t]*lmO"" <f>'}h,}il-f t]ftOJ-fI~ mc cancellation of registration under "(2) unless the
1. It OJ-il'l' OOYliTOJ-9" 1. It ;t'tI il fD? h t.A 0"" ..,11.f,'''' Authoirty has reasonable grounds to believe that the
fhliOJ-liA ftoyft"" 04: 9"tI'}f"" ht\.ftOJ- Oil,"<f>C person will male taxable transactions at any time
O'}o.il h,}<f>'" (~) oPlPl"" 9"11111 h'}JtlPl11 f<f>l within 12 months from the date of cessation.
OOJ-J oyoPAh:F oy",f,.~ hftO"" :: 4) While the cancellation of registration generally takes
Q' 9"1'111 fD?lPlHOJ- .+tlil fD?ht.AO"" ..,11.f,'''' tH'*l effect on the date of cessation, if .the Authoity is
mO-r <f>'}"f.9"C' QtrJ9" : f;t'tI(}. I1ftP'AITJJ ;1.tlil satisfied that the registred person' did not' make
h4-~ 9"1I111OJ-J t]hliOJ~O-r <f>J "f.9"C' ;1.tlil fD?ht. taxable transactions from the date the registration
AO"" ..,11.f,-r foPftt.Ol1D'J t]l:J1m : mY.:\I\ took effect, the Authority can cancel the registration
OoPoPftil 9"1'111OJ- hOliO"" <f>'} "f.9"C' hY.lPl1l
retroactive to that effective date,
OYY.:l.., .f,1'I\A ::
5) When registration is cancelled,' to.the extent
t.. Ohq'~ h,}<f>?\ Q '}o.il h,}<f>?\ 2 0i'Y.~11OJ- oPlPl:"
provided under Article 4, Sub-Article (4) of the
9"1'111 ItlPl1' : f'roPII10OJ- (tOJ- Oh~ fD?1)'.""J
Proclamation, the registered person may he deemed
lJ:P?J1' ;t'tlil OD?ht.AO"" ..,11.f,'''' hJf,. 'fitTJTOJ-
.f,~m?A ::
to have sold the goods onhanQ ill, a , taxable
j. f;t'tlil OYil;1'm4:f OY~ll1,) m.9"C' 9"11111OJ' fOli transaction.
6) Any obligation or liability under the Proclamation,
Otf~O"" 1..1. OJ'il'l' I1hlim~OJ- OYli;'~OJ'9° "'''''lC
9"tI'}f.1' ;1.tlil h4-~ Ohq'~ f.,.tTJt)0'1' ..,Yo;1' m.f,9°
including the furnishing of returns, of any person in
~I\&,~'1' 9"1"111 OoPlPlrt. 9"tlJf'''' fD?*l'l'
respect of anything done by that person while the
h.f,tf'}9° :: person was a registered person, is not affected by
Xli' P:j'hl1 Df~Ii"}11 J'.'}{l=1-
cancellation of th~ person's registration.'
(i. hllU 0;1'1' f',.,'lll<;.'''' t]A"'",,,, Oil,"<f>C Ohq'~ 11. Tax credit Rules
h,}<f>?\ f;(i oPlPl.1. f;1.tlil OY<f>li~il ft.Y.lO] 1. No tax credit is allowable under Article 21 of the
h.f,1'A9":: Proclamation unless:'
u) Ohq'~ h,}<f>'" ?;'~ : ?;'r m.f,9" Ir oPlPl:" (a) a tax invoice, or debit or tax credit note, in
hh~C{l'f; ;JC O"'ffll f;t'hil Y.l(t~ m.f,9" relation to the supply, has been provided in
f ;t' tIil YoQ:" OJ,e,9" tIt.Jt ""IP ~f: f .,.(tm h li accordance with Articles 22, 23, or 13 of the
f ;1' tI il oy <f>li ~ il h,} Jtt. <f> y:ft"" fD?m.f,<f> OJ-f'I-oP Proclamation and the registered person
1110 (tOJ- f;J.tlil OYil;t'OJ4:f 0D?f<f>C110'''' 1.11. -claiming the tax credit is holding that suppor-
h ~1i.U,) f,.;J&' 1P~Jl.1' (Y.l(t~ hilt.I\1. t]Atr~ ting document (unless an invoice is not
Oil"'<f>C) t]"<f>lO : required) at the time anYJeturn in respect of the
ft) f;t'tlil OY<f>li~ilh'}Jtt.<f>y,:ft-r fD?m.f,<f>OJ- f"'oP supply is furnished; and
1110 (tOJ- OJf,. h1C fl\111OJ-') lJ:J> OOY.oPfth..,. (b) a Customs Declaration as prescribed under the
f;1.tlil OYi1.;t'OJ4:f Itf<f>Cl1 hh~C{l-f; ;JC
Customs Proclarpation, or a document issued
Oi'ffH ;J.tlil fi'ht.ft oPtf~J fD?fl;J"''I'
by the Customs Authority evidencing paxment
01-9"<;.tI hq'~ oPlPl-r fi'H;J"f. f1-9"<;.tI Jttll\?
of tax in relation to an import is held by the
f1.\"''} OJ.f,9" 0 1-9" <;.tI 11ft P:' A tTJ'} f i' (t m t\.1\
registered person claiming the credit ~t the time
1P~f: t]I\<f>lO :
~, ;t'tlil fD?ht.AO-r OJ.f,9" h;t'tI(}. a ftf~OJ-'} f'}"'f.'
'any return in,respect of Jhe import is furnished.
h,}~il:P(I. ftoP"f.oPC OJ.f,9" ftOY*l'l' fmffl<
2) The cost Incurred to begin or terminate a taxable or
P'?
OJlilil.?J1- Oh q'~ h,} <f>?\f; (i 011IP l"" f i' t. <f> ~ f;t' tI il exempt activity are taken into account in cal-
i'<f>li7'1- ilt\.-r OD?hliOJ~O-r 'lit h..,9""" OJ-il'l'
culating the allowable tax credits under Article'21
,
fD?1 n- .f,tfli A :: of the Proclamation. '

Ohq'~ h,}<f>'" f;(i '}o.il h,}<f>?\ r(U) ftoP'}1f.~ 3) Article 21, Sub-Article (3)(a)'of the Proclamaiton,
f'
OY:}:}'lf,i'7ihCt]&?J1- f;t'tlil OY<f>li'1ilh'}f,.OY.f,f,.l.., denying a tax' credit on the acquisition of a
f.,.f,. ~11OJ- Oq"~~-rlJ:P ftOY:}:}1IflT'/.OJ-t\- f'}..,f.' passenger vehicle, dose not apply to'a commercial
f6lh~"" .,.7ihCt]&?J1-'} OJ.f,9" t\.tr-~ "'7ihCt1?J1-'} truck or other vehicle designed and usedprimarily
, . >

h.f,m.9"C9":: for the carriage of goods. ' '

Q' fth4J>~ h,}<f>'" 'fir; '}o.il h,}<f>'" r(ft} ht.'109" 4) For purposes of Article 21, Sub-Article(3)(b)ofthe
f"'oPH10 (tm- ~I\&.sP1-1 lP?.,.if'1- OJ.f,'r f,.'}0if'1' Proclamation, a tax credit is not allowed for VA.:r.
O't.M.?'}."f f9"..,11 h1A..,li-..,. h'}Jtf1)'. OJ.f,9"
."
qn the purcha;;e bya registered person,of(estaurant
-"

IP ?.,.if' 1- ft 011 11lili -r hp'? {l;t'rID- OJ-lJ.1, 0 D? :} ,

". m~als fen- executives, emplc>ye~ or customers, or
rtO"" 'lit ftoP~;J. hli ft9"..,l1 0D?t.6oPOJ-.."r",e, for, VAT on the rental of a,l9dge',andthe ct)'4fge for
fD?hCj:ftOJ- ;t'tJil h'}Jt<f>Cj~il h.f,t.<f>f:~ij f.,u-'} , food at a retre<\t for eml?loyees/T,heeJisaBowance
X~:( f.f-oPH10OJ- (tOJ-' "fOO1lCj~ h1A..,tr-""" ,rule, does nGt ,apply \0, pur~h~es Qf '.~~t~ain-
Ooriilm"" f,}"'~ r? I\.f, f"'IPd7? htf~ (ft9"ltt\. .!TIent"by ,,~.registere(tpersoP;jengaged, in the
t.il""~'}:"f;t-tlil ftD?ht.AO"" foP1ICjt;:'}..;~ P'? business qf,. selling' ~entertainIl)ent':. (sl!ch as a
. . ,
~

O<f>'I';t'~'}JtOJ-t\- Ooi1tfTOJ- ft1PlICj~ b:P'?J¥ I\,e, ~

"restaurant} if the, p.urcha.~es are,\jse,d din~ct1~ ~nthe

fht.flOJ- ;i-tlil h'}Jt<f>Cj~ilf,1.l;JA::
provision of taxable entertainment.
 1~' Xi!f.it~ t..1..Ir/.\ ~;J~-'" ;1''""1 ct'1'C H! ;rUVtp' ?if 4'"} Ii!n?; '}.9". Federal Negarit Gazeta - No. 1931soDecember, 2002-Page 1988
?;. f"'~fII/&h~"" :t'hil Or'&. Itf. hfJIt\ O~It f-"OD 5) A person who registers after VAT becomes effective
tl10 {}m- O"'OD tl1 0 1..H. Oh}1: 0 0IJ.1~ /):P Y'"f Itf. can claim credit for tax on goods on hand when the
f.t-ht.t\ :t'hil h'}-'t"'Cj~ilt\"" ttmf.,p fOlJ.-:;.t\m- registration takes effect if the goods were acquired
/):PY':t:'} f1J1m- 9""tI11lm- h8CjO"" .,.'} Ok"" Illt-"" within the six month period before the effective date,
iI ~ iI"" CD&...,. 1..H. m- il1' h IT., h Cj h., N.tJ'} /) :P Y'-:;- and the goods are to be used in a taxable activity
h9""tI11lm- O~It :t'h iI t\ OIJ.ht.AO"" carried on by the person after registration.
f'}"'1~ r' &.
h'},pil:P~ fOlJ.lm-ItTlD- hIT" '1m-II
6) Where the total tax credits available to registered
}. f.t-ODtl10 {}m- Oh,}~ f;rhil tlOD'} m-il1' h'}-'t.,.Cj., person for an accounting period exceed the total
amount of tax chargeable on taxable transactions for
iI 1\"" tt1.~"'1 fOlJ."ft\ CD<f:t'h iI ou m '} ~9"C ON.0-
that period, the amount of the excess is dealt with in
f :t'h iI tIou'} m-il1' 11he; tV" m- :t'h iI fOlJ.ht.A 0"" accordance with the refund rules under Article 27 of
"'111f."" Itf. ttht.A h0lJ.11lm- :t'hil fOt\mh'}1.IT., the Proclamation.
0,0 A 651. f 0IJ.:t' f m- 'lit -n 0 h fJI}1: h,}'" .,. 12. Reverse Taxation
'" ?)1 iIt\
oult7i 0.,.1."1,m- OUlPl."" fOlJ.t.89" f.ITCjA:I 1) The value of an import of services taxable under
I~' 017flD1 ilt\OIJ.{}O{}-n:t'hil
Article 23 of the Proclamation generally is the
h1AdJt\.."" .{}Q.1"m- hCj amount of the consideration that the recipient is
Ii' "''''Il~ "n~""" IltTm- obliged to pay for the services, except that if the
0 (IPIT.,. 9"h') ''''' CD1.h 1 C f0lJ.11l h 1 A"'11\-"" fJI;J
supplier and the recipient are related persons, the
f101 fJI;J t'}-'tIT'} I']A.,.1.1.1 Oil.,..,.C OhfJI}1:
value of the import is its market value.
h'}+", 1)r ouiPl."" :t'hil fOlJ.ht.AO"" CD1.h1C 2) Where a portion of the consideration charged for
m- il1' fOlJ. 111 1 A "'11\-"" fJI;J h 1 A "'11\-"" .,..,.11 ~ imported services taxable under Article 23 of the
"
t\h1A"'1/t"1: QDht.A litO"" fJI;J "m-II Proclamation represents tax that is not accounted
.
~ 0 h fJI}1: h,}'" '" 1)r OD lP I. ..,.
:t' h il 0 OIJ.h t.A 0"" for separately, the value of the import is the
CD1.h 1 C (D'il1' 00lJ.., 11h 1 A "'11\-"" Itf. ODht.A consideration under (1), reduced by an amount
I t\ 0""
fJI;J .,.t\f..,. :t'hil,) fOlJ.lJ.l.9"C hIT'"
equal to the tax fraction multiplied by that con-
IA"'mV'"
sideration. The tax fraction is r( 100 + r), where' 'r"
fh1A"'1t\..-t; fJI;J .,.1.C'P fOlJ.CD{}1.m-O'}o-il
h'}"'''' is the rate of ta x applicable under Article 7, Sub-
(ji) h"'ODl\h"'m- fJI;J Itf. f:t'hil 'llt-n h.,..,.,,{} O:\It
Article (1) of the Proclamation.
f.ITCjAI: 13. Transactions by Agent
Ir' Omh.A hO?I']~,,"" ilI\OIJ.hCjUJ'} "'1-nf."" 1) Where a taxable transaction has been made by an
ji . Oh 'P}1:h '}.,. f)'!i '} 0- iI h,}
+ '" (ji) ou lP I."" OJh.A agent on behalf of the agent's principal as specified
'"
{}
CDI']f. OIT m- m- il9" :t' h iI fOlJ.h t.A 0"" "'1-nf."" under Article 24, Sub-Article (1) of the
"
f t.8OU h,} 1..,,, hCj :1'hil OOlJ.ht.AO"" "'1-nf."" 17f Proclamation, and the recipient of the taxable
flT'Im- f.,.outl10 {}m- hIT" CDh.1t- t\"'1-nf.1: f:t'hil transaction is a registered person, the agent may
1.1.(}~ QD il m"" I t\ 0"" ""IT'}' CDI']~ 1.1. {}~ OD iI m"" issue a tax invoice in accordance with the
Proclamation in relation to the transaction; and the
f t\ 0 ""9"11
principal shall not also issue a tax invoice in
~. CDI']f. OIT m- {}m- il9" t\ CDh. It- :t'h iI fOlJ.ht.A 0""
" relation to the taxable transaction.
"'1-n,e...,. f.,.t.8OU hCj UJI']~ f"'OOll10 {}m- 2) Where a taxable transaction has been made to an
hIT'"
OCDh.1t- 1'11: O"'1-nf.1: I\.,.lt+t.c»- cDh.A f;l-hil agent on behalf of the agent's principal and the
1.l.{}~ tnt{}m"" 1t\0"" ""IT,}' h"'1-n.e.1: ;JC principal is a registered person, at the request of the
0"" III
t\ CDI']~ 'i"9"C 1.1. {}~ OD{}m"" f t\ 0""9" II agent, a tax invoice in relation to the taxable
I!i' f:1'hh O?iI:t'CDctlcpiJhCj fOlJ..,.c-nO"" htJ.:\'} transaction may be issued to the agent; and a tax
,
OhfJI}1: h,}"'''' f)'} f.,.1. "11m- f:f'hil O?iI:t'CD~1 Ilt\r' invoice shall not also be issued to the principal in
relation to the taxable transaction.
AtlJ'" OOlJ.CDiI"m- ,piJ fOlJ.lI;J~ ITtf.
14. Form and MannerofFiling Returns.
U) Oh 'P}1: h '}+ ou lP I."" O:t' h iI IIou.,. m-il1'
'" f)' A return required by Arti~le 26 of the Proclamation
ouht.A 1t\0""'} :t'hil t\"7illt"" fOlJ.lil"ft\m-'} shall be in the form prescribed by the Authority, and
hilt.lt1.. oul.)f fOlJ.f.-n.' l shall:-
t\) 11t\r' A tlJ.,. 0 OIJ.CDiI"m- h~:\ '} fOlJ. ODIT'} (a) state the information necessary to calculate the
"'C-n
hI\O"":: taxpayable for the accounting period in accor-
I~' :t'hil ",oult7i ilI\O?~I.'" dance with Article 20 of the Proclamation, and
ji. fh'P}1: h'}+?\ n '}O-il h,}"'''' ~(t\) f.,.ht.t\ :t'hil (b) be furnished in the manner prescribed by the
{} Authority.
h "''''Cj O~ It fOlJ."'l.m- '.,.004\ 7i lL1.l."'1 fOlJ. 111
" 15. V,ATRefund. .
'llt-n h-nc j IAOt\m hIT" f:t'h(}. 1lt\P'AtlJ,} 1) Article 27, Sub-Article (5)(b) of the Proclamation
f.tJ,},} f1'}tI-n OUm'} ",oult7f 'h,}1."7I1.C"'1f.1."
provides the Authority is not obliged to refund
"'1;JAr:ilt\(f"gu ",oult7f tt1.l."'1 V07.1t)m-'llt-n -nc excess credits if the amount to be refunded is not
j tiJf.9" hN.tJ O;r"f hIT" f.tJ f1'}1I-n ODm"} more. than 50 Birr. If the amount eligible for refund is
ItCD1.~""h'}-ti1';JiC +1.C.,.. O"'tlJf. f'lla-n tlOD'} ~O Birr or l.~ss,thi.sa~ount can be carried forward
lLhLAIt0lJ.1t1m- :t'hil h'}-'t:i'h-n .e.1.I.;JA:: and credited against tax due in the subsequent
accounting period.
 1~ Iitl-tit t..1..t.t.\ ~;MT .7""11~'I'C Iit ;ru'1P' t!1 +1 Iiin~ ~-,... Federal Negarit G~eta- No. 193111December, 2002-Page 1989

I' ~hil +001\11""}.lt1.l..,t\"" '1'f'k fD7.f+C-o f+oo 2) Where a registered person applying for a tax refund
H10 (lm- +1n.m-") f~hil "'Iil~OJotf fl\+lO has failed to furnish a required return, the Authority
""}1.If., f~h"" 11t\P'All)"}f+ooH10m- (lm- "'Iil~ may withhold payment of any amount refundable
OJotfm-") "ilhD7.f+C-o .(-lil OhCP~ h"}+;t t)~ under Article 27 of the Proclamation until the
00 IPl"" +001\ 11 t\.1.l.., fD7.111m-"} 'l" -0 f,Ji registered person furnishes such return.
t\"'I~ f"" f,"fl\ A:: 3) If the Authority does not pay the refund in a timely
C' f~h"" 11t\P'All)"} OhCP~ h"}+;t t)~ "}(}oilh"}+;t
manner as provided under Article 27, Sub-Article
(i) O+OJ(l.,m- 'tH. m-il'l' +001\11 t\.1.l.., fD7.111m-") (6), the Authority shall pay interest calculated from
'l"" -0 fA 00 t\ (l ")1.If
.,
'l"" n- +001\ 11 t\.1.l..,
the date on which the refund was due until the date on
" which the payment of the refund is made.
h D7.111m- +"} h"} il.,. "il h +00 t\ (l 0"" +") .(-ll1 1\t\m-
'LH. OJt\.(- f,htt:I\A::
16. Assessment of Tax
Ii' ~hl1 ilt\ooOJ(l")
ji. f~h"" l1t\P'All)"} htltJ o~"f f+HlH~"""} lJJ.9"e' 1) The Authority may issue an additional assessment in
0 +t\f~ 9"h"} f.,."f f +(J;},"'I~ ~h il m ,). t\. (l 'I' a variety of circumstances, including the case where:
f,"fl\AI
(a) a person fails to furnish a return as required by
v) ~hil h4.~ fhCP~ h"}+;t t)i OD7.fHm- OOlPl"" Article 26 of the Proclamation fails to furnish an
import declaration as required by Article 5 of
f~hil "'Iil~OJotf fl\+lO OJf,9" ffLlJ 1."}-O
h"}+;t ~ OD7.fHm- OOlPl"" ":J>sP"f"} OJ1. h1C
the Regulations;
(b) the Authority is not satisfied with a return or
fil1110"""} .lthl\t-ftf'"} fl\+lO ""}1.If."
:~nportdeclaration furnished by a person;
t\) ~hil h4.~ f+lOm-"} f~hil "'Il1~OJotf OJf,9"
(c) the Authority has reason to believe that a person
":J>sP"f OJ1.h1C f1n-0"""} .lthl\t-ftf'"} f~h""
has become liable for the payment of an amount
l1t\P'All)"} h1'.7n. Iflj fl\11m- ""}1.If."
of tax but has not paid such amount;
th) f~h"" l1t\P'All)"} ~hil h4.~ t\.htt:A fD7.1
(d) a person, other than a registered person, sup-
11m-"}~hil fAh~t\ OOIf)'"} fD7.f""9""} oot
plies goods or services and represents that tax is
ooljf f11 ""}1.If."
charged on the supply;
00) t\+{J;},"'I~ ~hil fA+ooH10 (lm- (e) a registered person supplies goods or services
" ,.
l1+l 0 m- iJ:J>OJf,9" 0 (lm m- h 1 A.., 1\-"" I\f,
and the supply is not a taxable transaction or is a
~hil ""}1.+h~t\O"" h.(-C1o f+lO ""}1.If." taxable transaction charged with tax at the rate
, IP) f+OOH10 (lm- f+lOm- iJ:J> OJf,9" f(lmm-
,-I of zero per cent and, in either case, the regis-
h 1 A.., 1\-"" ~h il f"'l f, h~A 0"" ..,-0f,"" OJf,9" tered person represents that a positive rate oftax
OUe' f"'ll1h~f Ah ~hil fD7.h~AO"" Iflj "t\ is charged on the transaction; or
hue' Ol\f, Olf., f"'lilh~f Ah ~hl1 ""}1.+h~ (f) the Authority has determined the liability of any
t\ 0"" h .(-C1o f +l 0 ,,") 1.If., . person in terms of Article 60, Sub-Article (2) of
l) OhCP~ n"}+;t :j; "}(}oil h"}+;t (I) oolPl"" the Proclamation.
l1t\P'All)). f~hil h4.~"} "'Yv~ O"7.oot\h..,. 2) The person assessed:
m ,). f(lm ,,"}1.1f., I (a) in the case of an assessment under Sub-Article
I' f..,-nC m ,). fD7.(lmm-' (1)(d) or (e) of this Article, is the person making
V) OttlJ n"}+;t "}(}oil n"}+;t ji(oo) OJf,9" (IP) the supply; or
f+1."11m-"} OD7.oot\h..,. n:J>CPi:"} I1h'iOJ.,m- (b) in the case of an assessment under Sub-Article
(lm- I\f,' (1)(f) of this Article, is the person whose
.,
t\) O"}(}oiln"}+;t ji(l) f+1. 11 m-"} OD7.oot\h..,. liability has been determined under Article 60,
OnCP~ h,+;t :j;"}(}oilh"}+;t (I) oolPl"" ~hl1 Sub-Article (2) of the Proclamation; or
fooh~A "'Yv~ 11t\0"" (lm- I\f,' (c) in any other case, is the person required to
th) 0t\.1\-"f o-)'~sP"f OnCP~ oolPl"" ~hl1 account for the tax under the Proclamation.
fooh~A "'Yv~ 11t\0"" (lm- I\f,' f,1f'iA:: 3). In making an additional assessment under Article 29
C' f~h"" 11t\P'All)"} OnCP~ h"}+;t t)i! oolPl"" ~hil of the Proclamation, the Authority may estimate the
h4. ~ 0 +{J;},"'I~ ,,"}.Ithtt:A fD7.mf,+m-"} ~h il 0..,9""" tax payable by a person.
t\.OJil"} ~"fl\A:: 4) Where an additional assessment has been made
2' OnCP:( n"}+;t t)i! oolPl"" f+lJJ."'I~ ~hl1 m ,). under Article 29 of the Proclamation, the Authority
f+(lm ""}1.If." f~h"" 11t\P'AtIJ"} t\~hil h4.~ fm ,). shall serve'"' a notice of the assessment on the person
"'Il1~OJotf f,Aht\~A:: f,1J9" fm ,). "'Il1~OJ4:.f' assessed, which notice shall include-
v) t\.h~A fD7.111m-"}~hl1' "'i (a) the tax payable; and
t\) ~h"" ooh~A f.,OlO"""} +"} 6J.I"9"CfD7.f,1f (b) the date the tax is due.
00 If"} n t\ 0"":: 5) The production of a notice of assessment under Sub-
~. OttlJ n"}+;t "}(}oil n"}+;t (!!) oolPl"" f+(lm fm ,). Article (4) of this Article or a certified copy of a
"'Iil~OJotf OJf,9" ftto- m ,). "'Iil~OJotf f+l.71m notice of assessment is receivable in any proceedings
:J>:( O..,.h h A f +(l m m ,). ,,"}1.If ., +~'I'e' O"'l'iTm-9" as conclusive evidence that the assessment has been
fhchc 00'(-lh O"'lilljf.,..,. ++I1f,""" f,Ij lCPA:: duly made.
'lA- llif1 ~~A ~;J~"" ;JtLtIJ 4r'1'C 1,t1C fi +,!if2~ ,..,... Federal Negarit Gazeta- No.1 3rdDecember, 2002-Page 1990

i' 01\'1':(. tD~9" OIUJ I.'HI OOIP~+ ''''H;J1: dJ~9" ,.,.(tm 6) No assessment or other document purporting to be
'tD-Pfk "71\:t'tD4:1 tD~9" "7'i:ftD-9" (t~.(" O~H+ ~'i made, issued, or executed under the Proclamation or
"'''
0tD-1f).+ 01\'1':(. ,.,.1. ~.,.,tD-") '''7.1''.7. ~ 'i 0 tD-Pfk this Regulations shall be:
" (a) quashed or deemed to be void or voidable for
"71\:t'tDetl ''''m.,.(ttD- tD~9" "71\:t'tDetltD- ~")JL(tmtD-
,:t'(tO (ttD- "'ofI~ '''7.LA'''O+ (ttD- ooll'~ h:l"tD+ (t~~. want of form; or
V) O+hhA~:"~ IA"'H;J1: 0001l'~ 9"h")l+ (b) affected by reason of mistake, defect, or omis-
t\..1P~1I tD~9" '''7.1P~1I t\..1I'") 1\,,"fA9"I sion therein,
A)
O(t~~,,~ O.,.Llloo I\U.,.+ tD~9" .,...("A+ if it is, insubstance and effect, in conformity with the
tD~9" t\.....,.+
Proclamation or this Regulation and the person
'''7.'' fltD- ~l'ofI 1 A.,.""'''' assessed, or intended to be assessed or affected by the
0001l'~ 9"h") 1+ "''''fI~~+ t\..ltrJ 1\~"fA9"a:
document is designed in it according to common
11' ")ofI~+") I\Aoo111
understanding.
i' 01\'1':(. I\")"'~ e!)li ")0-1\ I\")"'~ § OOIP~+ ':l"hf1- 17. Seizure of Property
flAP'AtrJ") 1'4-"'~ 1I't;' ''''.,")''tD-") :l"hl\ h4-~ 1) While the Authority must give 30 days notice under
")ofI~+ hoo he!) .,.") 04L+ A:l"hl\ h4-' "71\:l" Article 31, Sub-Article (4) of the Proclamation
''''
tDetl oo"h IAO+ 0.11'")9'" .,..,0.tD-") 1'~+ I\.("C1- before seizing property of a person in default, after
"71\:l"tDctl t\..1.C(ttD- '''7. .,fltD-") (ttD- 1\.("t.7'i making reasonable enquiries, the Authority does not
"7"'")"+ IA~A ~")1.II'~ "71\:l"tDctltD- ~")1..,.(tm have sufficient information to identify the person on
.,..JI'C' ")ofI~-I:")00111 ~"f"Arr whom the notice should be served, the notice shall be
I' :l"hl\ h4-' ")ofI~-I:") Aoo111 9"h") 1+ '1I'~tD-") deemed to have been served and then it shall proceed
':l"hl\ ~.-; ~'i ")ofI~-I:") Aooll1 'tDlI)tD-") tDlJ.l. to seize the property.
'hLA ~")1.II'~ ':t'hf1- flAP'AII)") OI\CP:( I\")+~ 2) The Authority may authorize the delivery of goods
e!)liOOIP~+ '''''HtD- ") ~+ A")ofI~-I:flAfi.+ tD"9" seized under Article 31, of the Proclamation to the
")ofIl-l: hoo,,,, 04L+ ")ofI~-I: 01'0:J>tD- tD~9" owner of the goods or the person who had custody or
O~fI:t'tD- P'C A~O~tD- (ttD- ~")JLOOAI\ I1.C;JArr control of the goods immediately before seizure,
,oo'{i;J"(,1 .("");J1.,,"f where that person pays the tax or other amount due
1~'
that gave rise to the seizure.
i' OflU I\")+~ tD-1\1"- 18. Transitional Rules
V) "ofI. 'II'~ ~:J>""f" "7A+ '''1::l''A ~:J>9'"f")
1) In this Article:
Q;1.9"C'tD1.I\.,c ,.,0- tD~9" Ol\.,c tD-1\1',.,..,,,. (a) "qualifying goods" means an import or pur-
6:J>9'"f 'i:ftD-I chase of goods, including capital goods;
A) "''''7'i~ ib..," "7A+ '7iI~'i 1t.h"'~l1 :l"hl\ (b) "repealed legislation" means The Sales and
I\'P:E-.I'C ~~/Tf; ~tD-I Excise Tax Proclamation No. 68/93; and
th) "'7iI~ :t'hl\" "7A+ 07i1~'i 1t.h"'~11 (c) "sales tax" means the sales tax imposed under
:l"hl\ I\'P:E- '.,.trJAtD- :l"hl\ ~tD-1I The Sales and Excise Tax Proclamation No. 68/
I' I\'P:(. hll'iO+ .,.") 04LT OI\.,C tD-1\1' ,.,..,,,. ~'i tD1. 93.
I\.,C tD-1\1' ,.,0- ~:J>9'"f") (I"7.ooAh+i :l"hl\ 2) The repealed legislation, including the rules gover-
I\A-trJAI I\AoohLAI I\AOOtD(t")i (,;rc+ I\A"7 ning the levy, payment, assessment, reporting, and
.("l"'l '.,.hLA") :l"h 1\ I\A"7I\OOA1\ ,.,.1. ~.,.,..+") recovery of those taxes, continues to apply to a
Q;1.9"C'10"'7'i~tD- ib.., tD-1\1'lit- .("");J1.9'"f (IOU-It- supply or import that takes place prior to the date on
.,.LA"7. ~:l":ftD- ~"'I'''AII which the Proclamation comes into force.
r. (I"'7'i~.. ib.., OOIP~+ ,.,.(tm'i I\'P:(. P't. ,,~ 3) Every' appointment made under the repealed
~l\h'PAO+ .,.") .("ll\ II")'" '~nltD- 'tD-hAS legislation and subsisting at the date of commen-
cement of the Proclamation shall be deemed to be an
P'A"'") 01\'P:(. OOIP~+ ,.,.(tm P'AtrJ") ~")1.II'~
appointment made under the Proclamation;
.,.1.C'l- Umt.A II
4) Notwithstanding Article 21, Sub-Article (1), of the
i~ 01\'P:(. I\")"'~ Wi ")0-1\(i) ,.,.ooAh"'tD- o C9" Proclamation in calculating the amount of tax
r.,.-".,o.. (ttD-:t'hf1-P't. ,,~ h'PAO+ .,.")1:9"C' payable by a registered person in respect of the fIrst
flAtD-r-1: -(,1 rt Pfofl1.11.t\..h~A r"7." fItD-:l"h1\ accounting period after the tax becomes effective,
I\A.T f1.h'itD") I OflU I\")"'~ ")0-1\ I\")"'~ (i) the register~ person may claim as an amount
-lPlT r"7.IP"tD- ~'i OflU I\")"'A" ")0-1\ I\")"'A" (1) creditable under Article 21, an amount equal to the
-IP~T "'''''i"li '''7.1.~.,tD- r7il~ :l"hl\ 00101. sales tax calculated in accordance with Sub-Article
.
OA''''A" Wi -IP~+ "'''''i"li ~")1."7.1.~'" tPfofl (6) of this Article and creditable under Sub-Article
(7) of this Article.
~'Jl11fA+ t\..m~"" ~"f"1A II
f;' Alt." I\")"'A"")0-1\I\''''A" (I) AL'"" I 5) For purposes of Sub-~icle (5) of this Article,
(i) r"'-H.,OtD- fa.. ''''g;},''7(' ~t\+ :l"h~ (i) where a registered person held, at the end of the
P' t. ,,~ h'PAOT .,.") 04L+ flAtD-'P' t. last business day prior to the date the value
.,., -g;},~2f :t'hf1- P't. ,,~ h'PAO+ hi added tax comes into force, qualifying goods
tDC04L+ r.,..,,,. ofI4Irll'~ 6:J>,,"f O~:(.' being g~ acquired not more than six (6)
r.,..,~ ~")1.II'~. ~'i months before the tax comes into force; ,and
 1Jt !itnli ~1.t.l\ ";"J~:";Inti} ~1'C!it ;1'UUf".tJg+' !itfj?; '}.9". Federal Negarit Gazeta-No. 1931stDecember,2002-Page 1991
,
. (ii) f:J-hl\- t11\P'AtlJ1 :J-hll h4-~. fhHUn /):J>~"f ..,v (ii) the Authority is satisfied that sales tax has been
llL1\1JO 01ilab 1.l(a~ "f. mf.1JO/):J>~:r:1m1.h1C charged to the person on a sales invoice and
paid on the acquisition or import of those
lllll1t10-\h"t-llf"1 "f. f7i1~ :J-hll fhLI\ hli goods, and the sales tax has not been rebated,
f:J-hll +ou"1i '''11 OUIf.,., t}l,?1m I the amount of the creditable sales tax shall be the
++li1ilL1.l.., fOt"fI\eD- f7i1~ :J-hll Oh~U.tJ /):J>~"f "f. amount of such taxes paid on such goods, but with
f+hLI\eD- :J-hil f.lfliA II 1f'f1JO I\hI1.';1~ -ock lll\lf~ /):J> respect to each item qualifying for the tax shall not
++li1i fOt1.l1eD- f1il~ :J-hll /):J>~:r:Ou.tJ hcr~ OUU'lT exceed the amount of tax which would have been
:J-hll fOthLAt1TeD- 0.1f1 lLhLA hOt1t1eD- :J-hll fOl\m payable had the goods been subject to tax chargeable
under the Proclamation..
lLlf1 hf."fAIJO ::
6) If, in any tax period, a registered person has sales tax
}. 007liTeD-1JOf:J-hll Hou1 eD-ll'l' f+ouH10eD- (aeD-Ou.tJ
creditable under Sub-Article (5) of this Article, the
h1"'1\ 1o-ll h1"'1\ ~ OUU'lT +.,.li1i fOt1.l.., f7i1~ amount creditable is deemed to be tax creditable
:J-hllll\eD- h11.1f~ : +.,.li7i fOt1.l1eD- f11H-o oum1 under Article 21 of the Proclamation and is subject to
OhCP:q: h1+1\ f!ji OUU'lT +.,.li1i fOt1.l.., If'f the provisions of Article 27 of the Proclamation
f.~mt-A II lll\lf~1JO Ohcr:q: h1"'1\ 1)1 O:J-hll Hou", relating to the excess of credits over the amount of
eD-ll'P lLhLA hOt1t1eD- :J-hll O"f. lll\lf~ fOt"'li~ll tax charged for the accounting period.
7) No credit shall be allowed under Sub-Article (5) of
:J-hll f+1. ~11eD- +L'Ot ~T f.'f lcrA ::
this Article for any sales tax paid in respect of the
~. Oh.}>CP-I: m.f.lJOm1. h1C 01t1eD- /):J> "f. f+Q;t.07t acquisition of any goods if the VAT imposed on a
h{J.T :J-hll f+hLI\eD- hCP:q:hOliOT .,., 0'-" 0.1f1 'it: supply or import in acquisition of those goods after
f+hLI\eD- :J-hll Ohcr:q: h1"'1\ f!ji OUU'lT +.,.li7i the effective date of the Proclamation would not be
f07f.1.l.., hlf~ i I\h.}>CP-I:f+hLI\eD-1iI~ :J-hll Ou.tJ creditable under Article 21 of the Proclamation.
h1"'1\ 1o-ll h1+1\ ~ OUU'lT +.,.li1i hf.1.l..,1JO II 8) A person may claim a credit under Sub-Article (5) of
~. f+ouH10eD- (aeD-hcr:q: OOliOT.,., Oh:q:OOt11-T-ock this Article for sales tax paid on qualifying goods on
flf.,. /):J>~"f "f. fhLI\eD- f7il~ :J-hll Ou.tJ h1.,." hand on the date on which the Proclamation comes
. into force, only if the person is a registered person as
1o-l1 h1.,." (~) outPl"" h1-\"'li~llI\T lLmf..)> of such date.
fOt"fI\eD- hcr:q: OOliOT"" +ou1f..,P f+11 hlf~ -o:F
9) A person claiming a credit under Sub-Article (5) of
~~ :: this Article shall submit with the fIrst VAT return
it. Ou.tJ h1"'1\ 1o-ll h1.,." (~) OUU'lT f+hLI\ :l'hll after the tax comes into force an inventory of all
h 1-\"'li~lll\"" 'P14: fOtI"'C-o (aeD-hcr:q: hOliOT .,., qualifying goods on hand at the beginning of the first
day on which the Proclamation comes into force,
0'-" hOtI.,.COeD- fou"f.outleD- f:J-hll 07ll:l'm<t1 ;JC supported by documentary evidence of the payment
hcr:q: OOliOT .,., Oh:q: f~O~T1 -ock flf.,. /):J>~"f
of sales tax.
1fC1fC hliOh~rttJ /):J>~"f "f. f7il6J.1":J-hll f+hLI\ 10) A disallowance of a credit for sales tax imposed
oulf.,., fOtll;J"'m- (a~,,"f1 07~l-o hl\OT :: before the date on which the Proclamation comes
I' hcr:q: hOliOT .,., O~T f+hLI\ f7il~ :J-hll +.,.lili into force, shall not be treated as a disallowance for
h1-\1.l.., Il\ouL"'~ Ohcr:q:h1.,." § 1o-ll h1.,." (~) purposes of Article 4, Sub-Article (5) of the
OUU'lT +.,.li7i h1-\1.l"l h1.';A+L"'1. :l'hll hf.~ Proclamation.
mCIJO II 11) Where a contract is concluded between two or more
parties before the Proclamation comes into force,
Hi' hCP:q: hoc;O+ .,., Ok"" OV-I\T mf.1JO hV-I\T O"f. Olf.,.
and no provision relating to tax is made in the
+CPCPf""f oD\1hA eD-Af+LOou hli Ou.tJ eD-A eD-ll'l' contract, the supplier shall recover from the
lll\:J-hll hh~LA IA+m"'(a hlf~ hcr:q: hOliOT .,., recipient, tax due on any taxable transaction made
0'-" OeD-it- OUU'lT OOtLOIJO :J-hll fOthLAOT under the contract and made after the date on which
..,-of."" "f. lLhLA fOt1t1eD-1 :J-hll h.}>t-o.eD-h1VeD- the Proclamation comes into operation.
lLmf..)> f."f"A II 12) Wher~ a contract concluded after the date on which
hcr:( hOliOT .,., 0'-" f+LlOUeD- eD-Alll\:J-hll htfif the Proclamation comes into operation does not
II' include a provision relating to tax, the contract price
f07f.m.}>ll hlf~ feD-it- cr;J :J-hll1 fOtQ;t.IJOCh11.1f~
shall be deemed to include tax and the supplier
+1.C1o f.m(a.';AII lll\lf~1JO h.}>t-o.eD- I\:J-hl\- h«t:f under the contract shall account for the tax due.
~"k f.lfli A :: 13) Subject to Sub-Article (16) of this Article, if in
Ie. OrttJ h1"'1\ 1o-ll h1+" (n;) f+oul\h+eD- h11.+ connection with a supply of goods or services,
mO+ If'f : hh:J>hli h1A..,f\oT h'}>CP""~;JC O+fIH I- (a) title to goods passes, delivery of goods is made
v) f/):J>OJ" ft1l\o.T~"" lllJO f+lIcrmleD- i f/):J>eD- or services are rendered after the date on which
chi,-o f+LOOUeD- mf.1JO h1A..,A--I: f+(ameD- the Proclamation comes into force; and
(b)payment is received or an invoice issued within
hCP~ hOIiOT +1 0'-" hlf~ : hli
nine months before that date,
1\) h«t:1 f+LOOUeD- mf.1JO 1.l(a~ f+(tau»- h+m for the p\4rP°ses .of determining the accounting
"'(aeD-.,., Hm~ mc Ok"" hlf~ . period in which the supply occurs or a tax credit is
h.}>CP-I: +L1\":l.A fOtt1AO"'" f'l.""-o 1.H. mf.1JO : allowable, the payment istreated as having been
f:J-h II 07"'li~ II fOtL'" '(-0"'" 1.H. l\oom(a1 : h«t:leD- made or the invoice is treated' as having been issued
f+LooueD- mf.IJ"1.l(aj. f+(ameD- hcr:q: OOliOT .,., on the date on which the Proclamation came into
. force.
h 1 1.1f~+1.C1o f.~int-A ::
14)' If services subject to sales tax were rendered before
I§' f7iI~,:J-hll fOthLAt1TeD- h1A..,f\o-f"fhcrit hOliOT the date on which the Proclamation came into force
.,., 04."" f+(ain-h11.1f~ hlih~leD- f+j.fJOUeD-hcr:q: and payment is made within four months after the
hOlif),-)-+1 O,-"t1I\eD-§ mc 1.lf. OJ:'ll'Phl1'~ Oh~U.tJ Proclamation came into force, VAT is not imposed
h1A~f\o-f"f "f. f+Q;t.07t h{J."";rtlll hf.hLAIJO II on the supply of the services.
n' :OifU ~fulrA ~~~..,.:Jfi."I cJ:TCIii :t'1..,P' ~I""
If;' h~fm- O+mfl~ 1.tL A~~"" 'h1Jl~09" 0'/1:/.'1 OD'/.f
()'1'A m-A /):l' f+h&-f 'h1~lf~ m~9" f1if6f!" ;J-h{)
fD'/.h~A 11Tm-1 h 1A'1f\o-f'1- f 00 {)m"" +'1I1C h 'Pit
hO'i'O"" ~1 04C."" +J:9"C' h'Plt hO'i'O"" ~1 O~"
fD'/.m'i'~c}> hlf~ : h'Plt hO'i'O"" ~1 04C.""f+flmm-
h1A'1f\o"" 'P;J f+h~t\m- h'Plt hO'i'O"" ~1 O~"
hh&-"" m&-"" .f ~-f I1Alf~ O{)+~C : h~fm-
0"""
fh&--I: mc 1.tL h+m'i'~~ O~" 11t\m- ~1 t\+flm
h1A'1t\ ,. 'h1~+~Ooo h~f +.f1'C' h'Plt h+m'i'~~
O~" 0 +fl m m- h 1A '1f\o"" ,,~ f+Q;1.O'/~ 'hll."" ;J-h ()
~h~"A II
I'k' 01O-{) h 1~'" (Ic) f+~ ~11m- fl'iC9" : h'Plt hO'i'O""
~1 04C."" 0 + ~/.oo ()9"9" ~..,. 00 II' /...,.
fO'/9"/."" m~9" t"h", fO'/{)~~"" m~9" ffl.ii.A h.1~)
~1'1 F&- f+h'i'm~ 'hli f+hlim~m- F&- m~ 1Vm-
f.t'''t\~m- h'Plt hOliO"" ~1 O~" hlf~ 'h1JllJo9" h'Plt
hO'i'O"" ~1 04C.""f+h'i'm~m- F &- 'P;J O;J-hfl. I1t\F
AflJ1 OO~~m- hl;J.~1 f+mfl~ hlf~ 'hli h'Plt hO'i'O""
~1 O~" 11t\m- fhc}>&-flm- fooJ:oo~f f+Q;1.O'/~ 'hll.""
;J.tJ{) f'lUJ.o 1.tL m-{)1' t\;J-tJfl. I1t\FAflJ1 h~/.O i
f.t.~O'/~ 'hll."" ;J-tJ{) fD'/.h~t\m- h'Plt hOliO"" ~1 O~"
O+h'i'm~m- F&- 'P;J ,,~ .o:F ~lf'i'A ::
1%' h'Plt hO'i'O"" +1 04C.""OD'/.1:9"C'hli h'Plt hOliO"" ~1
O~" OD'/.mli~c}> fh.&-~ m-A OOIP/''''' O+h&-f +1~
l1:l'1i 1.0 /...,. ,,~ h 'Pit hOIi 0"" 1.tL 04C."""t\m- f h.&-~
H001 f+h~t\m- fh.&-~ 'lUJ.o f+Q;1.O'/~ 'hll."" ;J-tJ{)
OD'/.h~AO"" 'lUJ.o m-{)1' h~m:l't\A9" II
h~A fl
h;J-tJfl. ~, ()t\oolf1
Iv.' foo'i ~f 0...,.
li' Oh'Plt h1~'" ~ 1o-{) h1~'" li(t\) ""C,.9"
00 II' /...,. "f oo'i ~ f
0.""" t\ oo'i ~f h 1A '1f\o""
h{)~"1. flf~m-1 hoo'i~f 0."" ;JC fTffHm-1
m~9" fH.lJo +~"''' flf~m-1 c}>1'C'1fl fD'/.Q;1.9"C
fl.lf1 : hoo'i ~f 0."" ;JC f+ f fHm-1 f'hC?f {1;J-
h~Q;1.9"C9" :: ()t\lf ~9" t\ ~'P~ 9''1- h 1A '1f\o""
fD'/.m-A m~ +1ihcl1~ O'/.fD'/.f fD'/.m{)1: f'1fl
m-{)1' 00111: : f'h'1C 00111: : fOOIi~'7i F~&-
foo'i ~f 0.-1: hl1A If'i ~.fm&-A::
fl' t\D'/.h&-~ oo'i ~f 0."" fD'/.m-A hJl{) m~9" f1t\1t\
1.o/...,. t\00'1""" f+ooH10 flm- fmtJ)m- mm.
h;J-hfl. ~, t\lf~m- oo'i ~f 0."" f'Pt\ hlf~ O'1Vm-
'P;J ,,~ f+h~t\m- ;J-h{) 'h1Jl~liH' h~~~f:9" II'
C' hlP~m- t\+~tJ)~9':t: O'~~"" OD'/.flmm- 1'c}>9"
ooAtJ foo'i~f 0."" f+flm 'h1~lf~ +~'D'/.
fD'/.lf~m- Oh'Plt h1~'" g 1o-h h1~'" (C)
00 II' /...,. t\ II' &-+7f'1- ~..,. f +fl m m-1 1'c}>9"
0' ~
hlP~m- 01'11: F&- 'h1c}>{):l'lI.m- 'l~"" m~9"
f1'11: F&- 'h1c}>{)*lI.m-1 m~+?ft\ ~/.~ t\0'/7i
;J1C 'h1~'Pt\m- oo4:mC l1~lf1 : Oh'Plt h1~'"
1O-{) h1~'" fl(U) OOIP/''''' h;J-tJfl. ~''h1~(f~
oom-fl1: ~m- :: hlP~m- h;J-hfl. ~, t\lf~m- O'~~""
t\+flmm- 1'c}>9"I1mtJ)m- m~ ,,~ fh~t\m- ;J-tJ{)
Oh'Plt h1+'" ?;li 0+~~11m-' OOIP/''''' +~'i'1i
'h1Jllf1 h~~+1:9" II
g. foo'i ~f 0."" hl1A flf~ f+1ihcl1~ O'/.fD'/.f F~&-
oo'i~f 0.-1:1 t\1.,m- flm- f+7im 'h1~lf~ mf-..iJ"
f+1ihcl1~ O'/.fD'/.f (1;rfoo'i ~f 0."" h.&-~ h I1A
If'i f+h&-f 'h1~lf~ h;J-hfl. ." ~lfliA ::
,.,... Federal Negarit Gazeta-No. 1931"December,2002-Page 1992
Iiifj~
15) If goods are leased under an agreement that
provides for periodic payments or if services
subject to sales tax were rendered during a
period that began before and ended after the
Proclamation came into force, VAT is imposed
on the consideration for the services rendered
after the Proclamation came into force, except
that to the extent the consideration for the
services rendered before the Proclamation
came into force is paid more than four months
after the Proclamation came into force, the
consideration is treated as consideration for the
rendition of services on the day after the end of
f'1111;J- :
that four month period.
16) Notwithistanding Sub-Article (13) of this Ar-
ticle, if construction, manufacture or extension
of building or civil engineering work is perfor-
med under a written agreement executed before
the Proclamation came into force and the
property is made available to the recipient after
that date, VAT is imposed only on the value of
work performed after that date if the value of
the work on the day before the Proclamtion
came into force is determined in a manner
approved by the Authority and is submitted to
the Authority by the end of the supplier's first
VAT period after VAT comes into force.
17) If immovable property is provided under a
rental agreement, for a period that commences
before and ends after the date the Proclamation
comes into force, the consideration for the
rental shall not include the amount attributable
to the period that ends before the effective date
of the Proclamation.
CHAPTER 2
Exemptions
19. Dwellings
1) A "dwelling," defined in Article 8, Sub-Article
(1)(b) of the Proclamation, includes that area
surrounding or appurtenant to the dwelling that is
necessary for its enjoyment, but not farm land
adjacent to a dwelling. The land surrounding a
dwelling complex,
including the driveway, paths, gardens and lands-
caped grounds for the use and enjoyment of residents
is part of the dwelling.
2) A registered person who purchases a new or used
property for lease as a dwelling is denied tax credits
for tax on any costs attributable to the exempt lease
of the dwelling.
3) If an employer provides a dwelling to an employee as
~- a fringe benefit, the exemption for the supply under
Article 8, Sub-Article (2)(a) of the Proclamation
takes priority over Article 4, Sub-Article (3) of the
Proclamation treating fringe benefits provided to
employees as supplies by the employer in the course
or furtherance of a taxable activity. The employer
under Article 21 of the Proclamation is denied tax
credits for tax on costs attributable to the exempt
fringe benefit.
4) A sale of a parking space that is part of the dwelling
to the purchaser of a dwelling, or the le'ase of a
parking space as part of a -lease of a dwelling is
exempt from tax. '
1~ lunr4..1.(,./,\ ~:M-r ;JUIIJ~1'C lu :f'''''''r' t)'g +, lun?; 'H'''.
st
Federal Negarit Gazeta - No. 1931 December, 2002-Page 1993
,
1). f~~'i'}it 1\1A..,I\o-f'f-: 20. Financial Services
,}11 TC1-9" f"7. if 4.), f~~'i,} it 1\1A.., 1) Financial services as defined in these regulations
b' mUJ 1.
~
I\o-f'f n"'A~ n"7.:1'm:" m~9" "'A~ I}A(J'~ h~f are exempt from tax under Article 8, Sub-Article
f.,.{\lflc n.(J''}9'' n1\'P)t 1\,}+~ ~ '}o-it 1\,}"'~ I(t\) (2)(b) of the Proclamation, whether provided for
OOlPl:" h:1'h(\- htt:f ~, 'i:faJ« II
explicit or implicit fees.
I' h:1'h(\- ~, f.,.1.l1- f~~'i'}it 1\1A..,I\o-f'f f"7.h'"
tt-:"'} ~(JJ.9"t.tt- I 2) The financial services exempt from tax include the
V) n1\n~&aJ« m~9" nCPli:"'i {\1JJ..aJ«f"7.h'im'} following:
l1~C,} -:fJ;.o. 7if6J.l",}m~9" fl1~C CPitT'i,} (a) granting, negotiating, or dealing with loans,
OI/it.,.~1.C'} ~9"C' l1~C -: fJ;.o. aJ«Am~9" credit, credit guarantees, or any security for
fl1~C CPit:"'i,} ooitill:" -: oo1.t.1.C m~9" money, including management of loans,
n"HUJ 00'}1~ -: m~9"
t\) c)~'} 00{\11{\11 m~9" naJ«hA'i 00P't.:"'}
credit, or credit guarantees by the grantor; or
1t~(JJ.9"C h1'}Hl1 -:(f1'}Hl1 9"')If&'} ~9"C')-: (b) transactions concerning money (including the
.,..,.0I/6J.I" 'LPfl1 -:chml} "'I' .,.'}.,.It.+7i 'LPfl1 -: exchange of curency), deposit, savings, and
htt:f . f1'}Hl1 'HaJ«aJ«C -: C)~ -: ~h m~9" current accounts, payments, transfers, debts,
h"7."'''t\f. f1'}Hl1 {\~P.'f ;JC n"'ffH f"7.h cheques, or negotiable instruments, other than
'I'm'} ,,'}:"it.+f1. m~9"-: debt collection and factoring; or
tit) J;.o.aJ« n.,.t\ f h ~f f "'{\m 'I' C).+aJ«'} f11f aJ«
(\aJ« f.,.t\f htt:f itt\oolj~ f"'1t\0t\:" h(J'~
(c) provision of credit under a hire purchase
nh.t.~..,V m~9" n..,v aJ«AOOlPl:"f.,.(tm agreement or sale of goods, but only if the
J;.o.-:m~9" i:., credit is provided for a separate charge, and the
00) nH.tJ 1.,}11 h"'1.~11aJ« PffAtt: f1\. '}n:t.'} it separate charge is disclosed to the recipient of
Tt\j'1. ooitm:" m~9" f1\. '}n:t.'} it TiLl\.'}
.
the goods; or
I}t\o.:"~:" OI/it",,,t\tt: m~9" nH.tJ TiLl\. ,,~ (d) to the extent provided in this regulation,
fmt\~ CPit:"'i ooitm:" -: m~9"
lP) f"'m{\~ '1':"9" t\OI/it11:" h.,.**oo 4.'}~ -:
provision, or transfer of ownership, of an
hTC'iiJ'.'}:" L '}~-: hlflcl:1' 4.'}~-: nfqoo-l:-: insurance policy, or the provision of rein-
f"'m{\~ 1'}Hl1 01/"'1:" h"7.fit'fA flflcl:1' surance in respect of any such policy; or
1\1A..,I\o:" L '}~ -: m~9" h'l'n.+ 4.'}~ -: (e) provision, or transfer of ownership, of an
h tt:f'} m ~9" 0I/'i:faJ«'}9" '1':"9" t\01/"'1 :,. interest, of an interest in a scheme whereby
h"7.fit'fA P'Cq:,.. "'m.+"7. 00(J''} f"7.fit provision is made for the payment or granting
'f A'} 0011:" 00 itm:" m ~9" f H.tJ'} 0011:"
of by a benefit fund, provident fund, pension
I}t\o.:"~:" OI/it"'''t\~ -:m~9"
l) h(V) "ith (00) f"'HlH~:"'} 1\1A..,I\o-f'f fund, retirement annuity fund, or preservation
1\(tlI)'I' 01/00;F:f:"I m~9" fund; or
(\) ~ , f t'hh 9"'1' 1\1 A.., 1\0:" t\ "7. {\lflc 01/..,n l {\{1'f (t) the arranging of any of the services in (a) to (d)
m~9" t\t'hh9"'i c)C~:1' L '}~ f1\1'i~ 1\1A ; or
..,1\0:" 00 itm:" -:
(g) provision of int~rmediation services by a
C. t\H.tJ 1.,}11 1\L '09" f"7.h.,.tt-:" hH.tJ n:1''f f.,.(t
lI):faJ« :"C1-9" ~tf t.:fcP AI buy-aid society or medical-aid fund;
V) «~h" fTit:1' 0.:" OI/If..,.'}-: f1'}Hl1 h~f 3) For purposes of these regulations, the following
:""If'H'}-: fOO'}11.;;: ~h'} m~9" 0I/'i:faJ«9" definitions apply;
f~~'i'}it 1\,}~,} 'LPfl1 Yon.:" m~9" (a) "cheque" includes a postal order, a money
"'*9"
ht.Jl:" "'}Jlf1.C'" f.,.(tm'} :""1f1l (n~,h.~-: order, a traveller's cheque, or any order or
nh."'h:"C'~h HYo m~9" n",,, 00'}1f,:) authorization (whether in writing, by elec-
~~9" t.A::
~:,. tronic means, or otherwise) to a financial
t\) «1 '} H11» 01/t\ :,. t\ 'I''} :1' If {\11 It n. -: n1\. '} it
- oo'}:,.".+ ~:,. -: ff 1\1~ '} Pf'}-1:9" t\'1''1':'' t\ "7.{\ institution to credit or debit any account;
nitl1 {\aJ« m~9" n1'}Hl1 AaJ«aJ«'I' .,...,I}C (b) "currency" means any bank note' or other
Pf~(J''} n",,, q"01/ '1':"9" ,,~ hCPt\aJ« nit.,..,.c currency of any country, other than when used
fOl/'i:faJ«9" 1\1C I}'}h fmll)aJ« 1'}Hl1 m~9" as a collector's piece, investment article, item
"'''
f1'}Hl1 (t~~ ~aJ«I of numismatic interest, or otherwese than as a
tit) «f 1\.'}n:t. '}it TiLl\." 01/t\:" t\ 00~'} '}..,~ P't.
medium of exchange;
L.+ ~ t\ooitm:"'i t\oo~lI)mC nmll)aJ« hCP~
ch'l'C if?;!Iitlif?; OOlPl:" fm:""" 1\.'}n:t.'} it
(c) "insurance policy" means insurance covered
'}..,~ m~9" fl1f9" 1.H. f1\. '}n:t.'} it '}..,~ P't. under a policy treated as general insurance
nool}A n"7.:1'm"'aJ« TiLl\. f"7.ifL'} f1\. '}n: business or as long term insurance business
t. '} it cP it:"'i ~aJ«II under"- Proclamation No.86/1994: Licencing
00 ) «f ~;J Yo :,. 'i7i» 01/t\ :,. t\ C).+ 1\ :,. C {1:" m ~9"
.,...,I}C m~9" 1VaJ« and Supervision of Ins,urance Business (the
1\1 A.., 1\0:" t\ 00 itm:"
~C~:,. t\"7.fithtt:t\aJ« ",ooPfPf~ h~f "Insurance Proclamation");
h t.Jl:" m~9" Yon.:,. ,,'}Jlf.,l.., f.,. m f "'aJ«'} (d) "merchant's discount" means a charge made
'LPfl1 n00'"ntt- 9"h'}f:" h ~;J YoaJ« ,,~ to merchants for accepting a credit or debit
f"7.m f:" 'L Pf 11 ~ aJ«II card as payment for the supply of goods or
services, or a similar charge made by a buying
organisation.
1X' lun!! 1C..1..~A~;J6T .?tLIlJ~TC lu ;J-..,..,P'C tJ!l+' lun! '}.9".Federal Negarit Gazeta- No. 1931"1December,2002-Page 1994

~. nlf.1J ~"}fI ft4..~e;'"}h "'1/N'ltt-T h+(amlD- TC~9"
n+QJ."7~ "7.thT~ f4..~e;'"}h "'1A..,tt-.,.";f"} 1IC1IC
h"}JLu-9" h4..~e;'"}h "'1A..,tt-.,.";f lD-h1' ;J-hh f"7.h
LAIlTlD-"} : h;J-hf1- ." flf).T"} he;'nILe' f"7hhLI
Ah ;J-hh f"7.hLAIlTlD-"} f"7.1"'~ 0000~1
iLlOJlfJ ~";fi\A:: "7.thT~ "'~JLh f4..~e;'"}h "'1A..,
tt-.,.";f nooLmt-TlD- 9"h"}IT iL~I.'" f"7.11llD-"}
ftlD-1' ft"7'l+T OJ~9" n1lc1I~ lD-h1' f+'l+-I:T
f4..~e;'"}h "'1A..,tt-.,.";f 1l1J~ nooftOJm 9"h"}IT
iL~I.'" f"7.1 11lD-"}"7?f?f1 QJ.9"e' "7?f?f1 iL~I.'"
IlTlD- n"7.1hLA'" 9"h"} ,.,.";f 1IC1I~"} ft"7?f?fA
~";fi\A:: n"c1I~ i\~ f"7.~1.1lD- "7?f?f1 fOe;'
f"7.If"lD- "7?f?fIlD- h+~1.1nT +"} "f.9"e' ~lfe;'A::
?;. nlf.1J ~"}fI h;J-hf1- ." oolfe;'TlD- f+~"11 f4..~
e;'"}h"'1A..,tt-.,.";f n+ooH1n Il"}h OJ~9" f4.~e;'"}h
+*9" OJ~9" n"7e;'TlD-9" 1\.1\(alD-f+(alll fllf"}9"
h;J-hf1- ." ~lfe;'ft-::
"}~"}.(- 1 A.., tt-.,.";f h;J-h f1-." hlf)' ..,tt-.,.";f
i' '" '" "'1 A
,;JC n +1 e;'1 "-:\"} f +(am fl If") 9": n", 'P~ "'"}+?\
'"
~ "}IJ-h "'"}+?\ I(ft) ooIPI.T h;J-hf1-
",~";fft-9":: hlf.1J n;J-";f n+HI.H~T ", ~OJ(a). flf.1J
'}~ .,.,.";f 1 A.., tt-.,.";f f"7. h + ft-T"} ~QJ.9" t-ft-J
'"
u) f4..~e;'"}h "'1A..,.,.";f"} ft"7.(a1' "':"t-fl OJ~9"
f 4..~e;'"}h '" 1 A.., tt-.,.";f"} ft"7.(al' :,.&.fl
'"
~"}n7j";f f+(am fih..,: f~"'fI h1111 he;'
f(a".(- ""'11 "'1A..,tt-T: iL~Ch f"7.";fA")
"'~,;J f00100T: lD-A f"7'P'PA he;' f;J-hh
lD-hAe;' "'1A..,tt-T (f9"hC h1A..,tt-T")
QJ.9"e'):
ft) ft1"}HflI ft(a".(- OJ~9" ftA.tt-";f "}fll..,.";f 1'n.4'
f"7.(a1' f'l11e;' h1A..,tt-T:
.
th) fOOI.)f T"}+e;' he;' f~ooOJ1I oohLI iLhT
""';EoT "'1A ..,tt-T:
00) h~ foo(afl(afl OJ~9" f4.~e;'"}h m-hAe;' h1A
..,tt-T:
IP/ fml.;J- hnA htt:l"} L"}.(- "7h+.c;~c"}
fooft(aft- fhh+.c;~c h1A..,tt-.,.";f:
I.) Ilft"'~t-: f4..~e;'"}h 9"hc I hoo~T ,;JC f+ 1
IH"} UfiT "'h+~~C f"7+'(- h1A..,tt-T:
f1/ h4..~e;'"}h (a.,,.";f lD-~ 'lft- UfI.,.";f ,;JC
n+IIH fh.&.~ I fL.4''(- oPhmT h'i
+00"'''' ~ "'1 A..,tt-.,.";fll
:;;. ftlf.1J~"}fI "'"}+?\ 3' "}IJ-h"'"}+?\ i "'L'09" f~"'fI
he;' f(a".(- "'mlln:" "'1A..,tt-TI h9"9""T
""'"
f+~I.(anT") ~~~ n"7hL09" ~~T f"7.he;'OJ"}
~"'fI"} f"7lfJt-T "'..,IlC: f4..~e;'"}h h"}:"h.4'f\sP";f"}
n~"}n7j";f ~"'fI lD-h1' f"7OJ&.l.h : f~"}n7j";f"}
~"'fI foo 111 he;' hlf.1J ni\~ h+HI.H~T ,;JC +tf"7;Eo
flf). "'1A..,tt-.,.";f"} oohmT"} ~QJ.9"&.A::
~. n4..~e;'"}h OJh.A +~JI f"7..y,~"} h.c; QJ.9"e' n"7CJ'
TlD-9" u-~;J- fA.i\"} (alD- h.c; ~JI '''7.y,fT ;J-hh
f"7.hLAnT "'fI~T "'~If"}9"11 n4.~e;'"}h lD-hACJ'
OJ~9" h4..~CJ'"}h lD-hAe;' ,;JC n+1e;'1 h1A..,tt-T:
hiil~ +..,IlC ;JC f+tfoo~ f~"'fI ""'11 "'1A'
..,tt-T oohmT") QJ.9"e' h.c;"}h"7hoofth +..,IlC ,;JC
f+IIH h1A..,tt-TI hh"} fooh;J-+A hllfth.c;sP";f
f"7.Lft..,"} h.c; f"7h+.c;~c "'1A..,tt-T ;J-htt- ~hLA
IlT'PAII
4) In addition to the definition of financial services
under these regulations, the Minister may issue a
directive listing financial services and specifying
their treatment as taxable, exempt, or zero-rated
supplies. The Minister may modify any such list,
including changes required by the introduction of
new financial services or modification of the nature
of the services specified in the list, with any such
modification or cancellation having prospective
effect only.
5) Financial services that are listed as exempt under
these regulations are exempt, whether rendered by
a registered bank or financial institution or by any
other person.
6) Some services are not exempt under Article 8,
Sub-Article (2)(b) of the Proclamation, whether or
not they are rendered in connection with an exempt
." iLlf)' financial service. They include, but are not limited
to the following:
(a) Legal, accounting and record package
services, actuarial, notary, and tax agency
services (including advisory services) when
rendered to a supplier of financial services or
to a customer of that supplier of financial
services;
(b) Safe custody for cash, documents or other
items;
(c) Data processing and payroll services;
(d) Debt collection or factoring services;
(e) Management services, such as management of
a superannuating fund;
(t) Trustee, finanacial advisory, and estate plan-
ning services, and
(g) Leases, licenses, and similar arrangements
relating to property other than a financial
instrument.
7) For purposes of Article 20, Sub-Article (6) of these
Regulations, accounting and record package
services include a financial clearing system that
may be part of the settlement process, the posting of
financial transactions to customers' accounts the
maintenance of customers' accounts, and the ren-
dering of services ancillary to the services just
described.
8) The mere acquisition of a debt is not a taxable
transaction, including debt acquired by a factor.
The services related to debt recovery, litigation, and
the management of the recovery of the amount due
from debtors are taxable, including sales accoun-
ting services under a factoring arrangement and
other services related to factoring.
'X' IiUli ~1.&-l\ ~;1.~"" ;1",11) "'PC Ii :t"1UfP'~I"',) IiUli ~'9'" Federal Negarit Gazeta - No. 1931"tDecember,2002-Page 1995

it. Otf.~ fOlJllh.t1 Ah :t'hll f"7.hLAI1:fw- f4.~'i,}ll 9) Zero-rated exports of financial services include:
h 1 A.., I\-.y."f f"7.h'" h-""'} ~(.fJ.1}"~h-! (a) financial services rendered in connection with
V) m1. W-6J.1"h1C h"7."h ~:J' ;JC an export of goods;
0""'"
f"7.(tm f4..~'i,}ll h1A..,I\-.y."f: (b) financial intermediation services rendered in
1\) IA"'oPn10 m~1}" 0h...,.r-A"1 ~'P~ IAIf~
connection with a loan to an unregistered,
(tw- m1. W-6J.1"h1C l\"7.AI1:fw- ~:J'sP"f f"7.1
llLA1W-') m"'. ouifL '} ~'}-'l"fA h".(tmw- non-resident person to finance the export of
l1~C ;JC 0""'" ,,,.(tm f4..~'i,}ll h1'i~~"" goods; and
,
h1A..,I\-"" : ~c; (c) fees imposed by an Ethiopian bank on banking
tit) OtUJ 1.,}11h'}+1i C!)~OA~ o-~:t' ~,}1."7.:t'~ services rendered to a non-resident who is
0".1. ~11W- w-ll'l' f"7.I1"''''' I1AIf~ Oll".+C outside Ethiopia when the banking services
,
0h...,.r-A"1 w-ll'l' 11\ l1'}h ~'P~~-J: 0h...,.r-A"1 are rendered, if they do not come within the
"AIf~ 0W-6J.1"h1C 1\"7.1~ (tw- fl1'}h h1A exceptions in Article 35 of these Regulations.
..,1\-"" 0"7.(t'l'0"" 1.tI. f"7.m~+w- hlj:l:
10) If an exempt or zero-rated financial service is
I' h:t'hfl. ~, f".1.t.1 m~1}" Otl.~ fOlJllh.t1 Ah :t'hfl.
f"7.hLAO"" f4..~'i,}ll h1A..,I\-"" h'P'iw- h:"CP""
incidental to a main supply, or if such a financial
;JC O"':}.c;~ f"7.(t'l' m~1}" f4..~'i,}ll h1A ..,I\--J: service is the main service, the rules in Article 5 of
'P,}~w- h1A..,I\-"" 0"7.1f'}0"" 1.tf. lll\:"~'I' h:"C the Proclamation on mixed supplies apply.
p.y."f Oh'P~ h'}+1i ~ f"'1.~11W- ".L'''7. ~1f'iA:I 11) Financial institutions and others providers of
Hi' :t'hll f"7.hLAO""'} (Otl.~ fOlJllhLI Ah f"7.hLA financial services that make both taxable (in-
O""') (.fJ.1}"~) ~'i h:J'hfl. ~, flf~W-,} f4..~'i,}ll cluding zero-rated exports) and exempt supplies
h1A ..,1\-"" f"7.(tm f4..~'i,}ll ".*qo"f ~'i ft,1\-"f may claim taJ!<credits under Article 21, Sub-Ar-
h1A..,I\-"" (t6J.1"sP"fOh'P~ h'}+1i tili '}o-ll h'}+1i
ticle (2) of the Proclamation only on purchases
(I) oP lP t."" f :t'h II 0IJ+'i ~II t\.m~ck f"7."f h-""
:t'hll f"7.hLAO""'} "'11~"" 1\000h'im'} 01~'P:fw-
(including rentals) and imports used in making
(O"'h~~"" 6J.1"I}"C) m~1}" m1. h1C I1ll1~'P:fw-,,~ taxable transactions.
11:F ~w-:: 12) The provisions under Article 21, Sub-Article (2)
Ill' "'+'i7i f"7.1.t..., :t'hll h:t'hfl. ~, Olf~ ~'i :t'hll of the Proclamation on the allocation of tax credits
O"7.hLAI1:fw- h:"CP.y."f oPllhA lll\"7.h4..L between exempt and taxable transactions do not
AO"" o-~:t' Oh'P~ h'}+1i tili '}o-.ll h'}+1i (I) apply (and full tax credits are allowed) to a
f"'1.~11W- Oh,}~ f-LPll11.tI. w-ll1' I1h'im'i:fw- registered person who derives more than 90
h:"CP.y."f 1 TC(t'}"" :t'hll f"7.hLAI1:fw-
..,l1M"f (fh'P~ h'}+1i tili '}o-ll h'}+1i (I) Olf~
percent of the person's total supplies in an
f"'oP"10 (tw- ,,~ ".L'''7. h~If~1}" ("'+'i7i
accounting period from taxable transactions (Ar-
f"7.1.t.1W- oo-h-w- :t'hll ~1f'iA)1I MLtJ hL'OI}" ticle 21, Sub-Article (3) of the Proclamation). For
h:"~n.w- :t'hll f"7.hLAO""'} ~'i m:"""w-'} this purpose, wh~n calculating the value of the
"'11~"" 1\000ll""" h4..~'i,}ll h1'i~~"" h1A..,I\-"" taxable and total supplies, the supplier should use
W-6J.1""I\W- h:"CP"" m:"""w-'} h;}11 oPlPt."" gross figures for supplies other than inter-
0IJ~t.'" ~'i 04..~'i,}ll h1'i~~"" h1A..,I\-"" f".ffJ mediation services and use net interest amounts
~w-'} fml\~ oPm'} (hml\~ 1n. ,,~ I\ml\~
(interest income less interest expense) for finan-
f".1.t.1W-') m"'. oPlPt."" 0IJ~t..., ~'iCO:t'A::
f1n.?J"f "7.tll""C 0"7.1mffJw- f"'(.fJ.OIJ~ ~c1.""
cial intermediation services.
Ii:'
:t'hll oPoP~1 f:t'hfl. I11\PAffJ'} "'1n. oPlll\-
13) The Value Added Tax Directive to be issued by
O:t'fw- hlJ.:\'} :t'hll O"7.hLAO"" ~'i h:t'hfl. ~, the Minister of Revenue may give the Authority
01f~W- f7il6J.1"~'}:"ll:J'c1. oPllhA f:t'hll OIJ+'i~ll discretion to determine the allocation of tax
f"7.1.t..., O..,.'} h lj:tt:A oPm (t') ~ '}-'l"fA P A ffJ'} credits between taxable and exempt supplies on a
t\.(tmw- ~"f"A:: bases that the Authority considers reasonable.
I~' Oh'P~ h'}+1i 1!li oPlPt."" f:t'hll 0IJ+'i~fl.,} 14) Regardless of method used to allocate tax credits
htt:lj:A I\0IJ~t..., f""~W-1}" "I.. OP~ ,,~ f'PI\
under Article 21 of the Proclamation, the regis-
n.1f'}1}" : f"'oP"10W- (tw- PI,. ,,~ f'PI\W-') "Fo
tered person must retain records to substantiate the
f"7.1llt.~ oPt.1fsP"f'} oP111 hl\O"":: f :t'hfl. 111\
H' A ffJ'} f 4..~'i,} II h 1A.., 1\-"" (t "'.sP "f II1\"7.(tm
method used. The Authority may require financial
'P:fw- f h 1 A.., 1\-"" q ~ ~.y."f ll:t'''''ll-l;I1CC oPt.1f service providers to submit statistical data on
~ '}-'l1+C~ t\.m~:" ~"f"AIl various product lines.
I~' I\4.~'i,}ll h1A..,I\-.y."f f".(tmw- h:t'hfl. ~, 15) The exemption for financial services extends to
f oPlf') oPl1"" f h. '}if.~ '}II 'Pll""'i 1\0IJ"'1"" the premiums for insurance cover under an
1\"7.11f fh. '}if.~ ,}ll rt\.ll f"7.hLI\w-'} ht.P'} insurance policy.
~(.fJ.1}"~A II ,

16) Premiums attributable to riders attached to an

Ii' h:t'hfl.~' flf~ fh. '}if.~ ,}ll rt\.f\. "'m:J'''7.sP''f insurance policy that is exempt from tax constitute
hh. '}if.~ '}II r t\.f\.w- 7i4..'} ;JC 0 ""'" 1\"7.1
170"" h 1A.., 1\-"" f"7. htt:h-"" h t. P,} h:t'h II ~, exempt services if the riders are only incidental to
flf~ h1A ..,1\-"" ~W-II the provision of the insurance cover.
1~ Ii!f1i ~1..IrA .,..?~..,. .?lLtfJ 4r'l'C Ii! ;t-1",r' 1)1 +'} Iiifj~ 'i.,... Federal Negarit Gazeta - No.1931sIDecember, 2002-Page 1996

I~' h;J'hlt-." flf)' fh.1if.t-1ll 7iLl1.9'"f "'m.cJ>OI/. 17) Services covered in riders to exempt
t\1f)' ()9'"f hh.1if.t-1ll 7iLl1.CD-7i~ 1 ,;JCCIA.,. insurance policies that are not incidental to the
11H fOl/.()mCD-n1A..,f\oT hh.1if.t-1ll 7iLl1.CD- insurance coverage are taxable to the extent that
.,.t\1-'" fOl/.()'I' 00l/.1f10T 'lit ;J'hll f.,.llJt\OT
hlf., ;J'hll fOl/.hLAOT n1A..,f\oT 1-lfliA:: the independent supply of those services would
I~' hh.1if.t-1ll 7iLl1.CD-,;JC ,A""'H n1A..,f\oT be taxable.
.,. m.cJ>OI/.h'Pli CD-f h. 1 if. t-1ll 7 iL l1. ,;JC f.,..., OD1. 18) .The Authority shall have the sole discretion to
llt\ODIf). CD-"f~ fODllmT -fiT=;: r'AllJ1 1t\CD-
determine whether a non-insurance rider is in-
f;J'hlt- 11t\r'AllJ1 "CD-::
cidental to the main insurance policy.
Ii' t\h.1if.t-1ll 7iLl1. f.,.hLt\ nlf11 h;J'hlt- ."

iLlf1 fOl/."ft\CD-0h.1if.t-1ll n'P~ ODlPlT fh.1 19) The premium on an insurance policy is exempt
if.t-1ll 7iLl1.9'"f1 t\ODR'I' L.cJ>
f: O"'()mCD- ()CD- only if the premium is charged on a policy issued
O"'Rm fh.1if.t-1ll 7iLl1. 1\1- f.,.hLt\ nlf11 by a person who is licenced to issue such policies
l1.1f1 "CD-:: under the Insurance Proclamation.
1). fh.1if.t-1ll 1.l\f\o"fj mh.f\o"f fh.1if.t-1ll 7iLll
20) Commissions and other fees earned by brokers!
t\1.10~~TCD- OODR'I' f0i/.111-T \'101/.7i1 "hli
"'t\o"f htt:19'"f fh.1if.t-1ll n1A..,f\oT O"'()mCD- agents who provide insurance coverage for their
h;J'hlt- ." fODlf1 OD-flT n1-RL)'9":: customers do not come within the exemption for
t;1i llt\n1f:1-f1lT 'l't-TI f"'''.7.1\ ODlf1 m1-9" f.,.Lt\ insurance as a financial service.
1CD-1n1A..,f\oT ODllmT llt\OD:Fft- t\"'()m 'PllTli
21) An insurance policy does not include insurance
fh.1if.t-1ll7i~1 fODllmT n1A..,f\oT fn1if.t-1ll
7iLl1. Ifli n1-mllf:9"::
cover on a warranty in respect of the quality, or
performance of tangible property.
?;Ii' f'PllTli 1P.,P."f1llt\ODR'I' m1-9" m1.n1C llt\f1I1ll1l1T
Ii' On'P:( n1-1»1\ ~ 10-ll n1-1»1\ !l(th) t\'PllTli 21. Supply or import of securities
1P.,p."f f"'()mCD-h;J'hll ." fODlf1 OD-flT fOl/.h.,.
1) The exemption for securities under Article 8,
ft-T1 111T;J'AI
Sub-Article (2)(c) of the Proclamation covers:
u) On1.t- fOD1" n1A..,f\oT1 "1-tJJ.9"C nhl1.
f'li"f1= ll"'\'1"f1= f11P."f1= f"'9"jf o.T (a) transactions relating to the issuance, transfer,
().,P."f1 m1-9" "'f\o"f fc')~ m1-9" fU-flT or receipt of, or any dealing with shares,
f:ci'f 'PllTli9'"f1 f1I1CD-llJT=
f1I1H'Pmcm1-9" stocks, bonds, treasury bills, or other debt or
OD-I»OAm1-9" O"hHI.U ().,p."f ODr't-T=
equity securities, other than custody services;
t\) h~1-li1ll n1A..,f\oT hOl/.OD"~ n1A..,
f\o.,."f= h"7ll.,.l\t\k1 . n "7 t-t>J.b
CD-f\o"f= (b) transactions relating to financial derivatives,
hOl/.()m- CD-f\o"fm 1-9" "'OD" "1- n 1 A.., f\o.,."f forward contracts, options, or similar arran-
,;JC f.,. I 1ft' ..,-flM"f= gements, and
th) Ok1.A (u) h.,.HlH<;'T f'PllTli ().,p."f ,;JC (c) transactions relating to the creation, issue,
f.,. I 1ft' n"7 t-6f!" fOl/.()m- CD-f\o"f1 m1-9"
transfer, assignment or receipt of, or dealing
'PllTli9'"f1 oPllmT m1-9" "h.,H.U1 ().,p."f
hODODr'lT= h"7CD-llJT= h"7H'PtDC= with, an option or warrant relating to securities
..,lo;J'li OD-flT1 h"7ll.,.1\ t\tt: m1-9" included in (a).
hOD-I»OA m1-9" O"h"H.U ().,p."f hODr't-T 2) The underwriting of the issuance of securities
,;JC f.,. I 1ft' ..,-fl1-"'-:;' =
generally is exempt from tax. However, the exemp-
!l' f'PllTli ().,P."f1 t\ODR'I' CD-AOD'P'PA h;J'hlt- ."
tion for underwriting services does not extend to
"CD-:: 1-0-1 "h1:( f'PllTli ().,P."f1 h;t'hlt- -."
"h1-\1f)' f.,.L4>1.CD- f'PllTli ().,P."f1 hODR'I' ,;JC other services obtained in connection with an
O""'H t\"7ll;J'mct1 "hli t\:ltTODT fOl/.1.l1' underwriting, such as advertising and printing
mlJJ.9'"f= t\ 'l"f -fIli t\:It.., 11t\ 00-19'"f m1-9" t\n "711 costs, accounting, legal, and advisers' fees.
t9'"f fOl/.LKOO-htt:19'"f1 t\OD"()ft- n1A..,f\o.,."f
3) The exemption for securities or for financial
fOl/.1.l1' htt:19'"f1 n1-aJ.9"C9"::
[. t\'PllTli ().,p.'f "hli t\~1-li1ll n1A..,f\o.,."f services does not include management or adminis-
f "'()mCD- h;J'h It- ." f ODlf1 OD-flT 'P1=;: .,..., 11<;. trative services provided to a business whose
fl1t\nhl1.f'li"f1 = fnl11\T1 m1-9" f"'f\o"f ()9'"f1 principal activity is investing funds for sharehol-
U-flT Or't- 1\1- "7'PA t\1f., f1,"'f: r't- f:C~T ders, members, or other persons.
fOl/.()mCD-1fnll"'~1.C n1A..,f\oT n1-tJJ.9"C9"::
g. t\H.Un1-1»1\nL"'K9":- 4) For purposes of this Article,
U) "11H-fI" "7t\T f"7liTCD-9"n1C "71=;:CD-9" (a) "currency" means any banknote or other
fml-l»T 11H-fI m1-9" "'1\ '1-"T l1.1f1 I currency of any country, other than when used
t\101 hOl/.CD-ft-T Oll.,.-I»C O;J'th"T f.,.()
as a collector's piece, investment article, or
0(){1-ffn1~"f111Hf1"f"hli t\h.1ii.llTOD1T
()., otherwise than as a medium of exchange;
fOl/.CD-
ft- P."f1 = n1-aJ.9"C9"::
,.. 111ft ~A .~~. ~.48t+rc D :I"'t'1,..,.+, DOl ,.,.. FederalNeaaritO~ta- No.1931-December,2002-Pqe 1997
,
A) ""4 .,ta+';" .,A+ 1.,1: AiD-'A.. III~" (b) "debt security" means any interest in or right to
A.'rl."'''7.~A''", h~" '-+C1. + be paid money that is, or is to be, owing by any
8'\.11"f =ftJ'1 ...,~,+-r+ta ''''1.+ ;JC C1",,'1f
person, but does not include a cheque or an
''''-'10' 'A." I ,~~.,.,. M .,.-"...~ +
A~A)."C"" interest or right that is a lease, licence or other
tit) "'U"'+ I:c1I' 1'ta+'l" .,A+ C1ih.,, ~+ similar arrangement in respect of immovable
+ C1"''''m'' ~~+ "1:? t\~ 'A '1:C1I'
property; and
+ IIIU- 1M'11'~N:?"~1I' A". f"~ .....
C111-ft"" " 'A" ~.... (c) "equity security" me~s any interest in or right
II. A1\.+,.I;, "'~~-r ft,h '1.".
.

GJC. GJI.A1C to a share in the capital of ajuristic person or the

...A""', ft+
OAn: A'4-", ~ '(Iota(I) (-) A1\.""""'''' ~-r ft'h
'''''4'C''' IDC. GJM1C 01.1..0+ 1.", h?h"" ~,
7\,I."tIl" ''''1.~11'' ,_C. ''I'~+ I.I.~ GJ~"
IIII.A1C C1"t1ftO+~u. '1.'1'1." :toc" h..,,.+ "la'l'
"~1ft '1\.+'''''''''''~1! ..'h ~f\.'''tIla1ft.., III~"
A.lt-":f ...,-":f Aft'11- lilt. A1C '-7.1la1&+' GJC:"
~A)."~AtI
ft. f'lP""'+ GJ~" h'P"'l''''';JC ,.,."". Jr.1A1W":f
,
interest in a close corporation of a member
thereof.
22. Import of gold fOTNational Bank of Ethiopia
The exemption for the import of gold to be transferred to
the National Bank of Ethiopia under Article 8, Sub-Ar-
ticle (2)(d) of the Proclamation applies to imports by or
for the National Bank, regardless of the level of purity of
the gold or the form in which it is imported.

I' 01."": A'4'Jr t '1M 1.'+'" 1("') C1"'1.~11" 23. Religious OTChurch-related Services
"''''/'+ '''1P'I'''+.,.,. h'P'f~+ ;JC,.,."". 1) The supply of religious or church-related services by
7\'1' 0'''''''''+ t:c;~+ f-7J\mo Jr.1.1W," a religious organization is exempt under Article 8,
h?hf\. ~, '1''''''' M"~" """, 1:C~"4- Sub-Article (2)(e) of the Proclamation. Generally,
,"tlttno'P:ffDef1\,.A"... P'Cftf. A". fll')' A1.1 services rendered by a religious Qrganization that are
tr-f-T hMlf\. ~, 0.,.1.1.1. '''tJr~). integral to the practice of that religion come within
~11''iA'' .
.
the exemption.
I' """'1'+ 1:C~" h"~ h.-:A1\.""'1. ;JC 2) . The activities of a religious organization that com-
"'1II4JS~C1-." r-ub'i"~" 7\,"la:l'8\'-T
"petewith the private sector or that are not integral to
III~" 'A"AMI P'(:ft"" A"A 'A"). """'1'+
$':C~of'f ,"t1h'i...~:r:.. .,..,ft~+ h:"h"" ~, the practice of the religion do not come within the
l\~If)''''' rl\~"'11?h'" '''th~Aq:f.. A:"C.,of'f exemption. If the value of these taxable supplies
";J C1A.,.:( A'4-", II h.,.".Ah.,...'"'If''' -10' exceed the threshold under Article 16 of the
C1t\~hlf~ ffW"W""~ Proclamation, the religious organization must regis-
-"""'" AAO"""
r. 'A'PJt A,+", t ,,,.,. ",t", 1(111) ""'ih~"" 7\'1' ter. .
'H-- "dtot::"fh?h"" ~, 7\''''''), L:to'-;"A" 3) Article 8, Sub-Article (2)(p) of the proclamation
laAI1'~"A-'ih~""7\'i A?"'''' Ute..:"4-'''''''10'' exempts books and other printed material. This
h:"hf\. ~, f-IM "".,,,.:,. 1:C;HT exemption for bopks applies to suppli~ of books or
A"t14-C&":f~ ""'ih~+'I ':1""'''' "dtot::Tv- , other printed material by a religious organization.

"'L~"t ~1I''iA'' 4) The donation in kind or money (such as church plate

i' 'CII:I' -'''\.. 0"'10" -'CII:" ""11 ffr M"~ donations) or services are not subject to tax if there is
7\lah"~ I:l.laO'''~'''' III~" C1...~"'If'" '''tI1. no direct link between the payment and any benefit
C1" 'C4:1"(0"'''' , + ~'i o-..,,,,~"") received by the donor.
.ID~" '.,.AC1+ A1.1A-+ ?hla A~h~~C1+"" S) A receipt by a religious organization from a business
~. A'$': n..,$': Y:C~+ oou 1111.++ GJ~" OTC'1
is not a supply for consideration if the receipt merely
~""'f I\~ la'" 7\'",m4-laA+ "'".,~." 1:C~+ entitles the ttansferor to be mentioned in a brochure
.c~ ''''18 7\"~"~ff''''''''1+ 1:C~ h,..,t: or program, but if a religious organization receives
~C~+ 'oM-OA" '~:I' C1h~' '~-'m A:toCP+
11.1f~ "'I.Co)~IIJ"'1:f8" 1I''r~ C1C1~~GJI.+of":f payment when it sells space in a brochure or
,.'"
ID~" OTc-1~" ,,~ A"'Ila:"GJ4:1'.,.If;J:( program, the receipt is a supply for consid~ation that
P;l-~;.r., "1P'I'r+ $':C~1:'irm 7\'I.II'~fAA1A does not come within the exemption for religious or
1'tt-1:,.,.u--- h~1 rYP'7'r+ 7\'1'h'P'7'r+ church-related services.
;JC ''''''''' A1.1h-.'f- h;l-h4\o~, 7\,I."tIl')- 6) A religious organization that operates taxable ac-
, Q~~~11""''''tJrJ.' .A~'"'' tivities through a develoPlDent commission or
I' .,r~~~+ ~.,.11' tIJ~" O., ,..,~ Ail. III~" similar entity or through ~ division or branch may
Ai(iIo,,,., O+H- 'r' ~ htt;A'III~" :"C11tt;
apply for or be required to separately-register one or
.
;liJla '''Y.hLAC1+' ' o,eo}o . '-t1h'lcDo'"~ more of the commissions, divisions, or branches as
"'JCr+ t:Clo"". ,mfPffltkA+.c C1"!JIDIIJ"
lIJJOP~I"..",t+ C11""- 1~" t--t'll-r~f 'P'6- provided under the Value Added Tax Minister of
.

h~A-~f :,.C")...~~ Revenue Directive.

;" O"""mA 7\''''-1f1&
. A.m~:"
~'fI\IA"
1~ H!n~,~f.t-&\ ~,?~""';Jt+lIJt"TC Iii ;r1..,P' fl"'')IiU~ ".r., Federal Neg~t Gaze~-NoLI93.1I1Decemb.er,2002-Page 1998
>. -~,'
-",""

?}Q' f(hn9,"'i"1A'"1""-f"fhe;Othb.9"f"7..?""~~X-~t-f"f . ,J.j~

~.,. u_~~-'C' 03CrvlCCS
.lY.lCW&,;lU lIUUrn::scnp n;,..~O
Ii'onw~ W6<7;'." ~
""""- ",,
'-" ,
' ,

:
"

~ ')CJ.(l ,,')-t;t I(l) f(hn9"'i ;' ~'\";;,,,!;""',<i-"'-" '"

Ii' O"cp~ ,,')-t;t

" ,'1). Article 8, ,Sub-A11i~le(2)(t) of the Proclamation
"
'"

"1A~""-f"f h'i Om.'i 1'0'+ "'I.Ul'f:C'Oo,.lDlI)

~~"'...~'
.:~

oooo!,' OOtPl-1- Othb.9" -1-6tf'" '-o~ f"'l.l1m- . exempts the ~l,KteringQhnedical services,and the
'iTm- "'-ot\~ f"'"l"~T OD~t"'"f m" ."1C import and supply of prescription, drugs specified in
l1.1{1-'i0"1C ~ll1' l1Ji'm- h;l-bll-~' h,)""7.II')' th~ 'directives'jssuedby the 'Minister of Health.
'. ;.
~"~~~AII 1lt\1I'~9" Onii:' f.,.l1m 0.11'')9'' .' .' '. .
Me9ical servlces~ expmpt,w~ether provided With
CI~II',)9" : nii:'~') f LfJOotJ)8;l-""'I.~ m~9" """
or without charge and wh~er paid,by the patient or
"ll"'~ aPI') 0.11'')9'' f ihn9"'i "1A'"1l\-1: hflU
.fl;l-:f f"'Ul"~-1-') 1Jct\-1-1Jc).;l-1P"ff"7.f":l." hll'~ resident or, any 'thirdparty, if the medical services
"

h~nl1: ~, ~1I''iIM meettwo conditions:

. V) fii1n9"'i "1A'"1""i: f"'l1m~ O;l-m.,.
(a) they-are re~red iDaqualified medical facility
f(hn9"'i "'*9" m~9" fihn9"'i "1A'"1""-1-
or by a qualified medical practitioner, or both,
,
h'»)ll11' UY.: O"'l1m~ Clt\"..., m~9" .
OlJct\-I:9" hll'~: he; and
.
,< h) f1lI..VJ',.')-O OOtPl-1- h;l-nll- ~, 1\.11'')f"7."fA (b) they qualify as e~~mpt medical servi~s in this
"1A.,""-1- hll'~u Article of the Regulations.
I' f(hn~'i"1A 1""-1- h;l-nll- ~, l\.11',) f"7."ft\~ 2) To be exempt, medical services must be rendered at a
n;l-m~ f (hn~'i "'*9" f.,.l1m fl.1I',) ~~II t\flU
,,').,.;t "L~~9" f;l-m-t fihn9"C; "'*9" f"7.Clt\~ . qualified medical facility. For purposes of this
fihn9"'i"1A'"1A-+ h'))ll11" L.+Y.: f"'l1m~ . Article, 'a q_ifte4 medic31',facility includes the
.')A~1 ",~",.') fCJ"lJ'ht;m-,)O-1- ,"'(i.~: 1I'1l offices of aqualified medica1practitioner, a hospital,
'C;l-Ai f"'lcr.t\!:.. 1'\1A:'"1tr-Tooll~ "'*9"') m~9"
. ma~rnity home, ort~inic. ,,), ~.
nl\.tn1, ~(iJ.).tr,'6-A" /-' ~"'+"''''
- ";,;-~, ;."
-~' . .' ,"'"
"
C... ~ihn9"'i 1'\1(.\'"1tr--1-h;l-nll-~' 1\."') f"7."ft\~
3} A q~ifi.e4.wedic~ sC;rvi~is Fx~mpt Hjt is provided
fih)19"C; '1'\1A'"1tr--1- h,)-\l11' UY.: O"'l1m~ by, a'qualified "roedical practitioner...A qualified
qt\"..., l1.l11' ~~II fihn9"e; "1A'"1tt--1- h'»)ll11' medical practitio~er includes a doctor,bealer, dres-
U Y.: f"'l1m~ Clt\"..., f"'l.Clt\~ Om.'i 1'0'+ ser,'he'illth' officer, physical therapist, and other
"7.tll'f:COOoD1I1-o ,t\O-1-'i "'0011'"1(1,'"'Il~1Mi "
. heal~ ~are p~vid~ who is requited to~ register and .-,. >t,
,_c. :.. .

",, f"'l1m~ p-n"'Ci fCl,"hA thtL9-i fm.'i l.-;-1-i fm.'i - ", -',,' >". '.

OO!.')')i ,,"fl"'f:~'Cll-1- "'i "'ft."f1r fm.'i "1A .registercxl with the Ministry,of Health. "

..,tr-..,. f"'l.l1n1. qt\oo-,1P"f') ~lA9"~AII 4) 'Toqu~ify for the exemption, medical services must
~.' . fihn9"'i "1A'"1tt--f"f h;l-bll- ~'fool1.',) 00-0-1- :
"consistol qu'alifiedservices (including meals and
"'m:J>"'I.'''.ir).fcit"f~:'" O;l-ID+fihb9"'i "'*9" ~OII¥DOdat~oJls)i~a, qualifi~ medical facility, and .
,
,

~ f.,.":I." "1A'"1tr--1-(9"'"1-o'iOO~;l-Q;},9"C')
'''T~ .' -", :1-'
"'. ''';,'
'"

'he;' r ihh9"C; ,;"..A"tt-i: 'f ihbfD'i 1'\1A..,,,,,-1-

must involve the rendering Qfmedical, services by a
,

. qualified medical "practitioner. Medical services

'h?.\.l11' L:J' Y.: O"'l1th~ ""00-' ""1P1' ~1I''i Au
fihh9"Ij' "1A.,tt-:f'f"69"C' m.'}~-1- "'I7f7fA') '.. involve'!tbe" d~rtosis, 'treatment, prevention, or
r
ta.fDC'f fllk')~-1- 9"CtID-&;Jo'li;Jw') "7h9"i ooh"hAi 'amelioration 6fa dise~e, inci~aing ilibprqmotion of
fm.;!)~-1- .,.).;J'') "77f7fA') f"7.f"++ ~"II
.
~. t\flU "~"'W')cHr).').,.it (Ii) 1'\L~A"f h;l-nll- ~,
,5)
ment;l1ttealth. ,
for purposes>of Sub-Arti~l~ (1) of this Article,
'

fOl'ff') OP-o..,.','.,.in.+"'I.I\.II'\>f"7."f".. O;l-ID-t .,

f ihb9"'i "'*9" ~ll1' '~b9"'i "1~ '"1""-"th '»)ll11' .seririces that <tUalify"
as exempt medical services
L:J>Y.: O"'lIm~ qt\" r +~-f t\"t:kh9" tD~9" inc,lvdethe'~eivicespro~i~~ to a residentor patient
A"'~I\1i ?t}"7. f"'l.l11' fihbre;
~"t:Jl.lJcr ~..,-o A'i ,001J'" t\1b-O"o. 'h'i
"1A'"1tt--1- . '~
by .f> qualifiedi.medi~aI'''.prACtitioner.. ill .a qualified
facility, u' we1I''iaS.meals and accommodations,
A;l-"~Y!" O.,.t\~ O'"1Af"7."l-',) .1',)'+'l:i "'~-f
,m~9" O"'QDc)"1i "~:J'h~W- ih~~"'~ f6"-1- "nursi1\g ahd personal' care; and assistanCe with daily
,~ <f:.
:...,..,; -,~.
.'f.:", '!\
"

.,,~tf;~,,-1-6Ct~;l-"'IY;l'"11,r~,t;Q.9"~A~~, . .living 'activities to, meet the needs of the resident or

""

~5;: .
.! '.; '> ',- ~""

i' ,AJJ.U1'\,)"';t,}~ll 1'\').,.;r (i)"L~~9"ihiJ'nll- ~, .

'
patient.
'. -~
fll'~-1- fihb9"'i "1A..,tr--f"f,. f"7.h"'~""') 6) ('For, purposes of S~b-Ar1iclc; {I) of this Article,
~Q;},9" ~~II
'" exempt medical semCe'Sirtc1udethe'following:
'0) ,.,.t\f'bii:' ''''I~mfc}ftTm- otrit'C;t-A
-,...(J)f,'r Onl\.tb fihn9"'i~ '''1A'"1tr--1- "I1A (a) medicines arl(1ilrugstltatare issuedin a hospital
~.., :}':-:~:. , ~
"";:""IJ~;'~
"j;. ,
~.." '-'-;
' '''\''~' -'-.
1I'~(J)"ff1ll.ilm- 00 Y;~t-f'fi" .
.;
"
.: or,clinicA)f 'YQiS~ ~~ ls;no~epara~charge;
v\) ;f"~.-M1,f~~ m~9" ""ito"f f9":Coo~ "1A'"1 (b). ~laporatory,~.ra~, 9r~er diagnos~ service;
.. "t;~; , ,."ft!' . .
(C)f:medicaUlevicesllSdefinedin Sub-Article(7)of
, .
;di) "fihb9!'i l'11A.,, 1- Ooollm-}r; u.-1- 1'.}9" , ;',
,,~ f"7.~~ OflU 1'\')-t;t 1(J-it, ~..-t1\ (1;) tAis;Arti~e 'ffiitf~ prJvided as part of the .~ .
~150..". .~~., ;;'
,', ~
~ ,;:"1. ,'f .: .t ,*':,
',-""'~

f"'UlU"," fihb9"'i OO1A1,1P"ft supply' of qualified riiedical services;: '

11"IItI21lJ./,oA ~;I&+;lUll) we II ;I1"1P' II +1 Illn 't.,... Federal Negarit Gaze.ta-No. 193111December,2002-Page 1999 ~

-) J\h~~1.' ihhr'i -.,tl9'"f') ~'i J\'-"CP (d) the use of operating rooms, case rooms, or
I
"'~A1.r~ OIaT~ft.M h~Af 0.,.,,, anesthetic facilities, including necessary ;
'ihhr'i hTTA h~A ~'i 0"7~1""" -h81. equipment or supplies;
-.,tl9'"f -m4-rf (e) the use of radiotherapy, physiotherapy, or
11') h:l"h""~' h.,> 'ihhr'i J\1A..,1t4"f ;JC
O",I"",A1.lC ihhr'if '~"'''-I:~1: mf,r occupational therapy facilities in rendering
'1ah--r:1I'iA -I:~1: J\1A..,A-M -m.,.rf exempt medical services;
l) h:l"h"" ~. ,"~m-1 'ihhr'i Ji1A..,A-T (f) accommodation and ~eals (except in a res- '
h-hmT ;JC 0""'" '''7.4-Co(1 -:OS:l" ~'i taurant or cafeteria available to persons other
r..,o(1 (.,.:OS.,.m-mf,r" 0"'-~~1I h"7.:l"hOD-
ih-r.,.7fo"f O.,.A1."7t Aft.A-"f (a9'"f Ji1A than patients or residents) provided to patients "

..,A-T h"7.(a'P 9"10(1o.T Oh.,.4-C)f or residents in the course of receiving exempt.

(a) h:l"h""~' h"~m- 'ihhr'i Ji1A..,A-:r- ;JC medical service;
0""'" Oihhr'i "'~OD- II'~"'7fo"f '''7.(am- (g) services rendered by the medical facility staff
Ji1A..,A "f (hihhr'i m-aol. 'II"> Ji1A..,A-
(including orderlies or technicians) in connec-
.,."f1 '''7.(am- 1P~"'7fo"f') mf,r -I:htitJ'
tion with exempt medical services;
'i"f1 A1.r~)f .

if) AJ\m'+~f, ''PCh ihhr'i ~'i m-0:r-1 (h) dental, periodontal, andendodontal services
A-A1.-C I1AII"~Oh.,.4-COih-rf OJi~;J rendered in connection with a disease, trauma,
rh11T O.,.Lml 1-JI:r-fQA.,.h.,.l1hA or congenital deformity, but not for general
J\LlI)mC rh11:r- '~l'" ''PChf mf,r
dentistry or for cosmetic reasons; and
'J\~ m-h'P ihhr'if
4-) 'Ji6r~ -l01l1 '''7hr J\1A..,A-:r-f (i) psychoanalytic services.
I' A"'U Ji14-2t1~h Ji14-2t (I) (th)J\L.fJr 'ihhr'i 7) For purposes of Sub-Article (6)(c) of this Article,
-1A11 "7A:r-O:l"m4-'ihhr'i .,.~r '''7.4-Co(1 medical devices means devices that are supplied to a
mf,r h...u O:l""f ''''"l"~:r-1 A1.r~ 'ihhr'i resident or patient in a qualified medical facility,
J\1A..,A-:r-h-hmT ;JC 0""'" Othh.r :r-6.,."
'P'-"r ~f, '''7.m-A -.,tl ~m-II
supplied to aqualified medical facility, or supplied
0) 'J\"'~'f.Lh mf,r 'Ao(1 r:r- -"'lI)mtl' on prescription in connection with the rendition of
'h-~A.T -II?i'?i'1"7hm1Jr -.,tl' O~.... qualified medical services, iflcluding:-
--10(1 ""f,"fA (am-'''7.1A1AO:r-,-- (a) a respiratory or heart monitor, dialysis machine,
10.1 6,+ . or feeding utensil for use by an individual with a
A) 'ihhr'i J\1A..,A-T JiI1A 11"':" Ao1i.,.7fo"f
disability;
'''7.(a'P ':I"mh- '(am-~T h~A-"f1 '''7..,.11
(am- (a~ 11 '(am-~T J\I1A' 'J\I1A 1:;J~ (b) a medical or surgieal prosthesis or orthopedic
-.,tl' aid provided as part of the rendition of qualified
th) A:I"m4-'ihhr'i .,.*r '''7.4-Co(1
'ihhr'i medical services; and
mf,r ,4-" 'P1'i -.,tl mf,r ~~"'U1
(c) medical or surgical equipment supplied to a
-.,tl9'"f .,.:OS.,.mf,r O"'-~~1i A"7.;l-hr
"7h~,:r-. qaualified medical facility, or the sale or rental
01i"'~
of such equipment to a patient or resident.
fli' 'TrUC:r- J\1A..,A-T
25. Education Services ~

i' 'J\'P:q: J\14-2t ~ 1o-h (I) (II') o:r-ruc:r- "'~IfD"f 1) Article 8, Sub-Article (2)(g) of the Proclamation
'''7.(a1' 'TrUC:r- J\1A..,A-T ~'i 0-'P6A ih''i:r-
'''7.(a'P 'ih''iT ~1ho(1110.J\1A..,A-:r- h;l-h ~. exempts education services rendered by educational
~1JlII"> J\1:C=\AIIhAII"~r A:r-rUC:r- J\1A..,A-:r- institutions, and child care services at pre-school
O.,.Af, '''7.LfJOD- h~I9'"f '''7.h.,.I\-T fIoA:r-
i~stitutions. Qualified charges for education services
fIo),;l-9'"f .,..,.A.,.m- ft.1"f. h~h"" f,1I"'il\-11
" are exempt if the services meet two conditions:
0) O...U~'0(1 O.,.Af. '.,.-Ah-t:.
A) O:l"m4-'TrUCT .,.~,. A.,.,.,t9'"f . '''7.(am- (a) they are specified in these regulations; and
hll'~' (b) they are provided to students by a qualified
I' h:l"hA-~' ,-." 0D0f1:r-
"'m'+"7. A-1I"1 Ji1A.., educational institution.
,.
A--Hi h...U O:l""f O"'"l"~ 6m-.'t'i O"'(all):fm- 2) T9 qualify for the exemption, the services must be
.,.tlfD"f A.,.,.,t9'"f ''''(am- -11'1 JiAQ:fm-1i
0) 0'-"1:- J\1~~ ~lJr' OJi1~~ ~a ~'i provided to students by an accerdited:
(a) pre-primary, primary, or secondary school;
O"'A"'~ ~lJr T/o..,."f.
A) 0OD-1"ft.~ ~'i O"tiicft.-t Jt'i (b) technical college or university; or
th) n-A"7(\~ TrUCT A"7h'f.'f.:r-''''~~OD- (c) institution established to promote adult
-t-tlfD"f' "'~ OD-1"7IPAm~9'"f' 'A" OD-1
education, vocational training, technical
P'Am'i -h8l.9'"f mf," 'JiI1A mf,"
1-JI.,.7fo":f1 A"7IPAm1 ''''~~OD- education, or education or training of physically
'J\6"~
-t-tlfD"f' or mentally handicapped persons.
1R- I it AJ.,t--A ~:Jt.} ;JtLtIJ ."'C III :J-1..,P 3'1 +") Iin~ ".9". Federal Negarit Gazeta - No.1931nI December, 2002-Page 2000
3) An educational institution in (2) is qualified, whether
C. n'}tH, ~,}+:t (I) f"'"~"~T fT9"tJCT .,.*qo"f
n"lA "TC~ n.,.**oo- ~C~"'"f. "TC~ flA.,. it is a private school operating on a for-profit basis, or
**00- ",..,n~T. ny.e.",«iT m.e.9" nbC.&;:t' a non-profit organization, church, or charity, or a
~C~"'"f m.e.9" nOU,}"IP'T ~"'''T''' fD7.."'th.~ department of government.
0. If'}9" h:t'h"" ~, fOUIf'} oullT "'m:J'D7.. 4) An educational institution in sub-Article (2) is a
.e.lfli 1\-11 qualified institution only if the institution is ac-
§. n'}o-h ~,}+:t (I) f"'"~"~T fT9"tJCT .,.*qo"f
credited or is being evaluated for accreditation by the
h:f'h"" ~, fOUIf'}oullT "'m:J'D7..t\.11'~fD7.."ffrT
/)m-:"li '""Yo m.e.9" ~1A"Ifro1:,} nl1fficnT 'UI. accrediting agency at the time the services are
bm-:"li ""'''I7T nou19"19" ".e.'1\- hlf~ 1I:F ~m-II rendered.
~. hlltJ n:f'"f f"'"~"~T ~1A "Ifro.,."f h:t'h"" ~, 5) The following categories of services qualify as
flf~ fT9"tJCT ~1A"Ifro"'"f liTm-1 exempt education services:
u) bm-:"lin.,.l1mm-fT9"tJCT "'*9" ".,.",~~"f (a) course of instruction provided to students at a
fOlJ.l1fficitC(\"f.
,,) /)m-:"li n.,.l1mm- fT9"tJCT
qualified education institution;
"'*9" fT9"tJC1:
(b) qualified meal plans, and other associated
"C'''I~9'' ~"'A If~m- ".,.",~~"f n~.e.~T
fD7..l1fficf9""IlI m.e.9" /'t.fro'f h~ 1A "Ifro1: ;J C goods or services provided in kind as part of the
119"~ '''Tm- b:J'~"f 'hli ~1A"Ifro"'"f. education program of a qualified provic:ierof
m) nT9"tJCT "'*00- fD7..l1ffichlf~ fL.,.li OUOU~ education services;
,~"f 'hli L.,.li fouhmT ~1A"Ifro"'"f. (c) instruction in, or the administration of ex-
ou) bm-:"li "'"7 itCh ;JC n.,.,," fD7..l11' f",h
.,.",C m.e.9" f"'mlih~' T9"tJCT ~1A"IfroT. aminations, if provided by the educational
hT9"tJCT "'*00- ;JC nD7..~~"I m-A OUIP~T n"lA institution; and
i'
hefl,}' hD7..l11' fT~,}h/CT ~1A"IfroT nh.,.+C (d) instruction or tutoring related to a qualified
.,.",~~"f'} hn.:t'Tm- m~:"~ou 1~ ~~~. ~'}~~ course.
~~~ m.e.9" v.""'~ ~~~ "oum-l1~ 'hli m~ 6) School bus transportation to and from pre-primary,
n.:t'Tm- "ouou"h nT9"tJCT "'*00- fD7..l11'fT~ primary, or secondary schools is an exempt
,}h/CT ~1A"IfroT fT9"tJCT ~1A"IfroT 'h,}~I1'~
education service if it is provided by the school
"''''1'C' h:t'h"" ~, .e.lfliAu
authority, not if provided by a private company
i' "T9"tJCT ~1A"IfroT n.,.".e. fD7..L800- h~,~"f
fD7..h.,.I\-T'} .e.aJ.9" ~fr1 under contract with the school authority.
U) "T9"tJCTI hT9"tJCT ;JC ""'"tt- ~1A"I 7) Qualified charges for exempt education services
fro.,."f1 hT9"tJCT "C'''I~9'' ;JC "",,'tt- include:
'h'}:"h:J'f\~"f 'hli "p'Amli fD7..L89"htt:'1 (a) charges for tuition, facilities, and curriculum-
,,) hT9"tJCT PC ""'"tt- ~1A "Ifro.,."f "I1..:t'
related activities and instruction;
If~m- f"'llJl\- htt:,~"f h:t'h"" ~, flf~ fT9"
tJCT ~ 1 A.., fro.,."f .e.lfli 1\-11
(b) compulsory levies for facilities are part of a
m) f.,.",~~"f 9"hC n.T h~'I f~T/'t.i:hh htt:, supply of exempt education services;
'hli hitCh hOUOU1l111;JC n.,.,," n"l~ (c) student council fees, athletic fees, and other
ouL89" '''flTm- h~,~"f1 manadatory fees related to course registration;
ou) "~/CT "'C~f "ou',"htt:T n.T ~1A"Ifro;"I (d) charges for reports, library services, identity
"ou:t'm-t" "'C~f "ou~~ 1'n:J' 'hli hT9"tJC-r
itC(\"f ;JC n+1':t' ""'"tt- 'hli nT9"tJcT cards, record keeping and other administrative
.,.* 00- "D7..l1ffic /'t.fro"f ~ h.,..&;~~'e ~ ., A"I services ptovided by the educational institution
fro.,."f fD7..L89" htt:'I and directly related to the supply of education
IP) "itCh ",-t:~'fro"fI T9"tJC1:'} nD7..l1mm-"'*9" courses;
"D7..+cn- hT9"tJCT "C'''I~9'' ;;c ".,."tt- (e) charges for course materials, the rental of
b:J'~"f h.~.e. ("9""/'t. fOO-ll:J' ouPl~,~"f
curriculum-related goods by the supplier of the
h.~.e.) I n~OUIf"YofOO1lli~ fltJ~ "'''m- nh.,.+C
education (e.g., the rental of musical ins-
hT9"tJCT "C'''I~OO-;JC n.,.,," fD7..~~"I
.,.lI:-ST 'hli truments), field trips directly related to the
~) T9"tJC1:'} nD7..l1mm- "'*9" ".,.",~~"f curriculum if not predominantly recreational;
fD7..+ClI fOU:-S:t' ~1A "IfroT (lfh-t:A ') and
aJ.9"C' ) (t) student accommodations (including hostels)
~. hT9"tJCT;JC """'ft ~1A"Ifro"'"f fD7..L800- supplied by the supplier of the education.
h~,~"fI ","h'}' ""1.&;?J"ff "OU',"h~T n..,."fI
8) Qualified facility ~harges include charges for buil-
"it9"1: m-"'Cf PI.e.'}h 'hli "/'t.fro"f 0..,. oo-h~?J"f
" dings, grounds, libraries, and computer, science and
fD7..L8OUm-'}h~' .e.aJ.9"~1\-1I
other laboratories.
'JW 1 it ji ~1..t,.A ~;J{''''' ;JnllJ "'1'C Ii! ;J-1PtP' 1)1+' Ii!Uli '}.SJ". Federal Negarit Ga+eta- No. 1931 rd December, 2002-Page 2001

it. h:t'nfl- ~, f.,.1.l1CD-f""rtJC"" 1\1A.,f\o"" flll!.h'" 9) The exemption for education services does not cover
I\-""'} 1\ J.',aJ.9" C9";:
the following education courses:
0) -'t.,~ CDJ.',9" -'t Tf\oO"1 flll!.ll11"f. Tc:.,t-qo"f
(JJ,tp:t'sP1'J
(a) course in sports, games, video recording or
1\I'JA I'JAIf~ {lll.,..,.C lIrc"'"
f ii.-'t f' "'l' CDJ.',9" f C;:.,.., t- tt: CDJ.',9" f 'UI. photography or other hobbies or recreational
0fJI1I\LI CDJ.',9" f 0011
'I ~ .,.., 0 t-""1
pursuits, unless they are part of a degree-or
1\) f.,A ~CD-"''''''} 1\000~{lC :t'lI{lCD-l\lII!.ftm C;:.,.., diploma-granting program;
t-tf:,} {lC;:.,.., t- tt: 0fJlI.,. 00 65j. fOfJ{}.,.00 1
'I'
(b) course, such as picture framing, cooking, and
f9".,-n 11"~"" h'i" f.,A tr).:t''} 1\0007i7iA personal investment, that are designed to im-
flll!.ftm itC(a"f. prove knowledge for personal purposes; and
tit) f""9"tJC"" Tc:.,t-9" 1\I'JA IAIf~ fau.'t:J> (c) music lessons that are not part of a school
""9" tJc..,.. curriculum.
I' I\fLtJ 1\,}"'1\ 1\ct'89" f;}J.',OfJc:':" ""9"UC:" hf"'h
10) Religious workers receiving education are treated as
:t'." I\- f;} J.',0fJc:'..,. 1\1 A., f\o"" fill!. ft m ft sPl'
'''OfJ~sP"f 1f~CD-J.',~mt-I\-:: students for purposes of this Article of the
I(;' {l'}lJ-{} 1\'}.,.?\ (~) h;1'nfl- ~, h.f'.(J.l1-'''' 1\1A., Regulations.
I\".,."f {l"'aJ.0fJ~ {l.p~'oo-n'}1.~ I.l~;: {l1\,}Y.;;: 11) In addition to services exempt under (4), exempt
I.l~ CDJ.',9"{ltrl\"'~ Y,l~ .},/n."'1' flll!.ftm h;1'nfl- education services rendered by a pre-primary,
~, flf~ 1\1 A .,I\".,."f flll!.h'''1\-'''''} J.',(J;),9"t-I\-; primary, or secondary school include -
0) f A ~ ""9"tJC:" itC(a"f1 (J;),9"C: ooIPl;1'lJ! (a) basic instruction, including special education
""9" UC.,."f; courses;
1\) {l""/n."'1' I\lII!.ftm f.p~oo-1\,}f.~ Y,l~
(b) fees or charges for a pre-school or after-school
CDJ.',9"h""9"tJC"" {l:\1\ I\III!.I'J~J;. Tc:.,t-qo"f
program operated by the school;
fOfJ.hctl\- ntt:lsP1';:
(c) charges for the use of school musical ins-
tit) {l""/ n..,."f f 00- tl:J> 00"" ~1 sP1' CDJ.',9" f {}r C.}
~:J>sP1' 1\00m"'9" flll!.ct8au' n~lsP1';: truments or sports equipment;
(0) f'}9"tJCi: Tc:.,t-9" 1\I'JA 1f~CD- {l'''0fJ~sP1' (d) services rendered by students or their teachers
CDJ.',9"{lOO9"Ut-c:':FTCD- flll!.ftm 1\1A .,1\""'1'; as part of the instructional program; and
h'i" (e) charges for students to attend a school play,
IP) "'0fJ~sP1' {l""9"UC:" n.:" CD-{}'f' {l1ll!.I'Jth.J;. dance, field trip, or other school-sanctioned
65j.CD;1'sP"f, ~'}(a"f: foolln 1-lfsP1' mJ.',9"
activity primary for the students.
{lt\, 1\"1' {l""/ n."" CD-II'I' {lIII!.I'J~J;. h 1.p {}:J>(l.sP
l' 12) Exempt education services rendered by a university
"'11;1'&. 1\001f'} flll!.ctiJoo-tpTCD- n~lsP1';:
of technical college include courses, including
I~' h;t"nfl- ~, flf~ {l~UiCf1.1:sP"f CDJ.',9" {l'l:ntn
itt\,~1' flll!.Om f:"9"UC:"
correspondence courses, that qualify for credit
1\1A.,I\".,."f "'OfJ~CD-
f-'t.,~ mJ.',9" f-'t Tl\oUIJ Tc:.,t-qo"f'} flll!.h:J""A toward a degree or diploma, wh~ther or not the
ll.1f'}9" 0J.',1f'}9" I\-'t.,~ CDJ.',9"I\-'t Tl\oUIJ flll!.ln~ student is pursuing a degree or diploma program.
itC(a1-'}n"'A~it ""9"tJC:" 00{}m:"1 J.',{;J;\.9"t-A:: 13) The education exemption for adult education,
IE' h;1'nfl- ~, flf~CD- f'loAOfJ(a1' :"9uUC"": fau'l vocational training, technical education, and
P'Am'i": f'l:ntn ""9"UC:" h'i" 1\1\I'JA CDJ.',9" education or training of physically or mentally
1\1\~9"C: 1-~"'~1' fOfJ.ft'1' :"9"UC"" h'i" P'AmC.' handicapped persons includes charges for:
fill!. h .f' 1\-"" J.',(J;),9" t- A ;:
(a) adult education courses leading to a degree or
0) I\-'t.,~ mJ.',9" I\-'t Tl\oUIJ fOl/.ln~ 1\1AOfJ(a"f
diploma or courses that are liekely to enhance
flll!.ftm itC(a1' mJ.',9" (U1Cfl- "'I1:t'L flll!.lf~
"'0I/~sP1'') h.p'l'C ;JC f"'II11nrilf\o""
employment-related skills of the students en-
1\000I1Y.., 1{}1'I\I\' f"'OI\- tIC(a1';: rolled in the courses;
1\) f'''0fJ~sP1''} fau..r nrill\""" 1\0007i7iA mJ.',9" (b) courses of study at a vocational school that
1\tryI1Y.., fOl/.1 {}1'1\' n 00-1 ""P"tJ C..,. n..,."f develop or enhance a student's occupational
flll!.ftm itC(a1';: skills;
tit) 1\.,o.n 0l\CD- ct:J>~'ftQ.1. foo'}.,p''''' oo/n...,. (c) courses leading to, or to maintain or upgrade, a
f.,'ftmCD-'} fOO-l mJ.',9" f,}"~ ~CD-.p'i"CD~9" professional or trade accreditation or desig-
itlD? 1\try~ f"" CDJ.',9" I.l~ CD-'} 1\0fJ7i7iA nation recognized by the appropriate govern-
flll!.l{}1-1\- itC(a"f;:
ment a£crediting agency; and
(0) ~~.p'i" CDJ.',9" lIlD? 1\0fJ"1"" {llll!.ftm '

(d) a certificate or examination in a course or

itc (a1- CD
J.',9" T c:., ~qo"f L 1''1 CDJ.',9"
f9"{}nC CDl"''''' oollm"";:
program for accrediation-or designation.
itC(a"f h.p'l'C ;JC f""I11CD-'} ntJf\o"" 111~;JI\- 14) Courses enhance employment-related skills if the
I~'
fill!. 0 1\CD- fitC fl- 'il\ 0fJ +OfJ~ sP"f fill!.'" II oo-..,.'} course objectives specify those skills that students will
ntJf\o"" n""nnA f1ll!.1A1\ h'i" "'0fJ~9'"f f.,.ft acquire, and there is a reasonable expectation that the
oo-+'} ntJf\o"" 1\001l'i"~: I\""Ctf: 1.1f. OfJI1I\LI: skills taught will be used by the '<'studentsin their
1\ h. ~'I' {l-n CDJ.',9" 1\0 tJ A 11J.',1f'} {l"'''' m ~{l"" 00 / employment, businesses, professions, 01'trades, rather
0."";: {loo-lmJ.',9" {l'}.,~ P't- ooitn 1CD-I\-:1'A than for recreational, hobby, 'artistt'c,orcultutal pur-
flll!.A I'JI\ ~CD-II
"9""" poses.
1~ gitg 1...101,.&\";J~T ;JH.1fJ.ft1'C lit :MUI". 111+' Iitfj~ '}.9". Federal Negarit Gazeta - No. 193101December, 2002-Page 2002

I~' t\.:'f--9"tJc.:'f-- h1/.\'?I\o.,."f f.,.l1mOJ- h;t'tJft. ~, 15) The exemption for education services does not
foPlf') oP-o.:'f--fOl/.h+,,".:'f--') h.e.~9"C9"I include;
u) f.:'f--9"tJC.:'f--.,.~oo- f.:'f--9"tJC.:'f--h1/.\'?I\o.:'f-- oPll (a) the rental of facilities by an educational ins-
65J.sP"f') h.:'f--/o.-I: OJ-~ It"" 0- ~tj"f Ih~f
titution to an outside group;
h,)~If~I
(b) the sale of admission to school athletic events
t\) t\hm.4>It~ ol., otJl;:.:'f-- Olf~ v-~;t' O.:'f--/
0. -I: 001/.il ~J;. f h.:'f--I,,"t tJ II h') :"ll.4> I'I.sP"f
open to the general public;
oP,,+l;: fOl/.lll"f/.\ tJl;:1 oPmf:"; (c) commissions and other fees received from the
ch) O.:'f--9"tJc.:'f--.,.~ 00- :"'fC '? {1. OJ-ll'f OPt')-I:9" placement of coin-operated machines on the
fOl/.lP~ D'/7itj~,'} OD'/ll~oP'f f0l/.1~ ttOl/.7i'} institution's property; and
OJ.e.9" t\,/\ tJ If:1; he; (d) the sale of non-course material, such as items
oP) f .:'f--9"tJc.:'f--0.-1:'} h COi/f oP" () t\' h.:'f--9"tJc.:'f-- containing the schoollogo.
;JC '?Tf.~:" f t\'/\TOJ-'} D'/i:tli\°"f ooPif 'f
f0l/.1~ 1{1.; 26. Supplies of Humanitarian Aid, and Imports of Goods for
Rehabilitation after Natural Disasters, Industrial Ac-
?}j. t\l1-oq~ ~C~:J' fOl/.OJ-t\'h:"C(1.y.".f he; n.,.t.'fC' he; (}OJ-
cidents, and Catastrophes
lP~ 7i hf.;J 1-~.:'f--fY.l(}fITOJ-') oP/.\(t t\D'/~~cr hh1C
OJ-ll'f f0l/.1rr': cDf.h1C f0l/.10- ~.4>sP"f 1) The exemption for supplies of humanitarian aid
under Article 8, Sub-Article (2)(h) of the
fi' t\(}-oq~ ~C~;J' fOl/.OJ-t\- h:"C(1-Y.~' h;t'tJll ~,
h,}f.OI/.If~ nhtp~ h'}~~ ~ '}o-ll h'}~~ ~ (if) Proclamation applies to goods imported or pur-
f.,.f. ~11OJ- "'t..RO'/. fotlf~OJ- nn1 hf:~1.:'f-- ~C"f: chased locally by organizations registered as
.:'f--~.:'f--
f"'oPlI10' f.:C"f:.y.~, t\ILV- qlt°'l roY. h1C humanitarian organizations, for such purposes.
t\ 0I/.1ll1!l. TOJ- he; 0 h 1 C OJ-ll'f t\ D7.1!Uf:OJ- ~.4>~~, 2) The exemption under Article 8, Sub-Article (2)(h) of
~OJ-::
the Proclamation covers the import of goods or
~. nhtp~ h')~~ ~ -}o-ll h'}~~ ~ (if) h;J'tJft. ~,
purchase of goods locally in connection with an
llt\(TI'If,} f"'f.~11OJ- (}OJ- lP~ 7i OJ.e.?" f'h~_'fC'
announcement or declaration of a natural disaster,
hf.;J noP~'lft. ern'}IT fhf.;J OI'hlthl'J'1I'?}f.~-1-
ttOl/.7i') l1f.l1OJ- f~C~;J' 'ft ODlPl.:'f--rof. h1C industrial accident, or catastrophe by the Disaster
fD7.10- OJ.e.cr hh1C OJ-O'f fOiJ.'Hr ~:P~'f'} Prevention and Rehabilitation Commission.
.e.m.cr ~/.\:: 27. Water
~.%. OJ-' A supply of water is exempt from tax under Article 8,
not.rOtil ;t'7i1hOl/.Ii'f OJ-' no.,."'c '(OJ-'/ h:"C{1-}' Sub-Article (2)(i) of the Proclamation, unless it is
nhtp~ h'}~~ ~ '}o-ll h')"'~ ~ ("') n-t'f, "-l1a}cODlPl-)' processed in a factory.
h;t'tJ ft. ~., ~OJ-::
28. Imports Exempt by Law or Agreement
?;-:r.'
~ ~ nm'" OJr.9"- nll?°9"~T h;J'tJ{}. ." f-f'Y.l1- OJf. "',C
f0'l/.1 0- ~.4>sP"f
1) ArticJe 8, Sub-Article (2)0) of the Proclamation
exempts imports of goods by the government,
fi' nhtp~ h'}~~ ~ '}o-il h1"'~ (ij (n) nth'? ror.cr
nllcr?"~.:'f-- h1-cr~h ~l'f he; h"'t\o~' ;t'tJ(t1' ~,
organizations, institutions or projects only to the
f.,.f.l1- ~C"f:.y."f .,.*lfP"fe; TC'~tJ.y.~, rof, h1C extent that they are exempt from duties and other
t\0I/.1ll1!J.:fa>-~:PsP~' h;t'tJ II ~, h J OI/.lf.,. -f' f, ') import taxes by law or by agreement.
'?:}/.\:: " 2) An exemption by law covers an exemption for
~. hD'/e;TOJ-cr ~l'fe; ;t'tJll ~, 1f~OJ- roY. h1C certain imports granted by a Proclamation or, when
h')Jt 10- nhtp"f: f'f't..<I>f.; OJr.cr Ohtp"f: O-f'(}m specifically delegated by a Proclamation, granted by
P'/.\ffJ'}oPlPlT Of.'}-o OJr.?" noPoPtl h;t'tJll ~, a Regulation or Directive.
flf.,.:" h;J'tJ{}. nth'?~" f.,.f.l1- nOl/.t\OJ-.,''l-f'OJ- 3) An exemption by agreement covers tax exemptions
~, r.lfe; ,,"::
for certain imports ofgoods only if the agreement is
r' Oh9"cr~.:'f-- hp-tJ(}. ~, foPlf'} oP-oT .,.t..'0'/.
fOl/.If~OJ- noP'},?p'.:'f-- OJr.cr noP,}'?P'T fH'(}m
entered into by the government or the agreement is
t..4>f: oPlPl.:'f-- n.,.f.l1- hcr9"~.y.~, ~, f'f'f.l1 entered into with permission granted by the govern-
l1.1f,} -0;: ~OJ-:.: , ment.
~. nhcrcr'1.:'f-- h;J'tJ(l- ~, f"'l1- fOl/.t\OJ- hlltJ n:1'~' 4) The exemption by agreement includes an exemption
f"'''lll~.:'f--'} .e.aicr~/.\:: provided under;
u)
.
nh..:'f--f-kl 0I''}'?p'.:'f--e; nD'/e;TOJ-cr ~'c"f:.:'f-- (a) a technical assistance or humanitarian assis-
OJr.?" OD'/e;~(bc9" h1C' oP1'?P':" OI''lh/.\ tance agreement entered into between the
f.,.f.l1 f-t:tJttJ'.:'f---o-oc OJr.cr f(}r{1q«f 6C~;J'
Government of any country';
h?"9"~.:'f--I (b) the Diplomatic Immunitiesand Privileges
t\) nJtTf\oD'/-tn' /.\~ oP-o.y."fe; 'f:"lfP"f f,'}l1
Registrations,
f.,.t.+f.I -
(c) an ~ntern~tipnarconvention,h~vingthe force of
ch) fh..:'f--f-A'1 :h'? hil/.\ nlf~ qt\cr h~lf:
hcr?"~.:'f--; . ,law in.~tb.iopia;
oP) crye;TOJ-9" h..:'f--f",kl ,hl1/.\ flf~"fn.:'f-- (d) any -other, multilateral agreement to which
"'It
fl1t\-orr cD1'} ll9"cr~.:'f--; Ethiopia is a party; .
1X" liLl: J.1.t-A ~;Ji.:" ;Jtl.1IJ<ir1'CIii :MUfP' ftl"" liif~~ ,.9'". Federal Negarit G eta - No. 19 31'1December, 2oo2-Page 2003

?lit . ..,.t- , hrC"" 29. Transport

.ji. 0"":( ",+;t ~ ,o-h ",.,.;t (I) (T) ,,""t-'h 1) The exemption for transport services under Article
rc"" "1 I.\""1\-"" f +l1m ~ h;1-)'u\. ." f OD If' 8, Sub-Article (2)(1) of the Proclamation is a broad
OD-o"" OIl7'iT~9" ,~.,..,. ""t-'h7"C"" l1sP~' exemption covering the charges imposed for the
CD~9" iJ:f'sP~' "117=\=\11 fDtL09'" ht;:1 transport of passengers or freight by any mode of
111"";1- A II
transport.
I' iJ:f'sP~' CD~9"OD'11.7f>~' 0'''9'' ".,.t;: ""t-'h 2) If a transaction involving the international transport
7"C"" h" , ~ f1;1- CD 1.
"'"
fll7=\=\11h':" h:f' ().
O"cp:( ",+;t ~ ,o-h ",+;t 1 (T) ODlPl"" of goods or passengers qualifies for exemption
h;1-hl\- ." Olf"~ P'C fDtCD~:" hlf.,; ~IJ h':" under Article 8, Sub-Article (2) (I) of the
h:f'()' 0"":( ",.,.;t ~ 'O-h ",+;t (§) ODlPl"" Proclamation, Article 8, Sub-Article (4) treats the
OtL~ fll7hhLI Ah ;1-hh fDthLAO"" ~1f'iAIl transaction as zero-rated.
c!J. L:f'~ "117"'1"" fDtL~OO- ht;:lsP~ 30. Permits and Licenses
ji' 0"":( ",+;t ~ ,o-h ",+;t (I) (.,) 117'iT~9" 1) The exemption for permits and license fees under
f P' t- h ,:"h:f'(). "lI7h'iCD' "Dtl1'1' L:f' ~ fDtL09" Article 8, Sub-Article (2)(m) of the Proclamation is
ht;:1 h;1-hh ." h'1.DtIf' f+1."11~ +L~D7. limited to fees charged for permits and licenses
fDtIf"~ OOD''''P''''' "11""" "Dtl1m L:f'P.~ 1I!F issued by a government agency.
"~II 2) The exemption in (1) does not apply to licenses of
I' OtLlJ",.,.;t ,o-h ",.,.;t (i) f+OD"h+~ h;1-hl\- intangibles and Qther licenses or permits, such as
." fODIf' OD-o"" ..,n-4-ce VAsP"" ftt."T~'
the right to use property, g ranted by private parties.
OD-o"'~ "ODm"'9" CD~9" "tt.I\-~ O,-ol"" I of Customs
ODm+9" "OD"l1,,"OD-o"'~ O..,A +'P'Pf"~ fDtl1m 31. Imports Exempt under Schedule 2 'B"
L:f' P.~' "~(J;).9"C9"1I Tariffs Regulations.

c!Ji' O~9"~h ;1-&t;: 1.,-0 v."+~ OD1.-o(,,) h"'l'l' ." The exemption granted under Article 8, Sub-Article
h"+1.l~ CD1."1CfDt10- iJ:f'sP~ (2)(n) of the Proclamation for imports of goods exempt
0"":( ",+;t ~ ,o-h ",+;t (I) (1) 0+1."11~ under Schedule 2 of the Customs Tariffs Regulations is
ODlPl"" O~9"~h ;1-&t;:1.,-0 v."+~ OD1.-o"'l'l' ." limited to the exemptions granted under part (B) of
f+1.l~ CD1."1C fDt10- iJ:f'sP~ h;1-hl\- ." h'.\If). Schedule 2 of Customs Tariffs Regulations and under
f+L"'1.~ +L~Dt fDtIf"~ O~9"~h ;1-&t;: 1.,-0 Directives issued pursuant to those Regulations.
v."rf-~ OD1.-o (,,) "+HlH~"" h'i 01.'0- ODlPl"" 32 . Workshops for Disabled
ODtCDIJ) ODOD&1 h+l'l' ." "If), iJ:f'sP~ -o!F "~II
1) The exemption under Article 8, Sub-Article (2)(0)
01' "I1A ~~+7f>~ fDtIP~qT~ ~C~.,.~
of the Proclamation. applies to goods sold and
i' 0"":( ",+;t ~ ,o-h ",.,.;t (I) (,,) f+1."11~ services rendered by workshops employing
h;1-hl\- ." fODIf' OD-o""+L~Dt fDtIf"~ f"I1A physically or mentally disabled individuals.
CD~9" f"iJ9"~ ~~+7f>~' "''I'l~ fDtIIP~
2) To qualify for the exemption under Sub-Article
~c~"''f "D7.1+C9.T~ iJ:f'sP~'i "1A "'I\-"'~
-o!F"~1I . above more than 60 per cent of the workshop's
employees must be disabled. The 60 per cent
I' htLlJo,,~ O,o-h ",.,.;t (ji) f+OD"h+~ h;1-hl\-
." f ODIf' OD-o""+m:f'Dt "-If), fDt ~"'..,. hIP t-+ threshold is measured by the number of disabled
7f>!FT~ ODl1hA ~ OOD'" "I1A ~~+7f>~ ODIf'iT~ and total employees in the previous 12 months,
f+l;11m ~C~.,.~ 'iT~1I hlPt-+7f>~ ODl1hA :!; except that if the workshop has been in existence
OOD'" "I1A~~+7f>~ ODIf'iT~ fDtl;11in~ for less than 12 months, then the threshold is
q" 4-..,.!1 CDt-"" h., O~..,. m:""" IP t-+7f>~ ODl1hA measured for the number of months the workshop
f"I1A ~+7f>~' ck'l'C OOD"'~ OOD~l1~ "~II
has been in existence.
~v.' h':( ~C~1: P't- hJ:Oul hll CDt-""0;1-~
hlf., ~C~1: P't- ,,~ O"fqT~ l.tLl"" '''''''' 33. Books and other Printed Materials
1Pt-rf-7fo'f -0 ,. OOD"h.I"""'1"..,"AII 1) The exemption under Article 8, Sub-Article (2)(p)
0;:' OD~,'ht;:""
of the Proclamation applies to a printed book or an
update of a book. The exemption applies to a bound
i' 0"":( ",+;t ~ ,o-h ",+;t (I) (CD)h;1-hl\- ."
h"ODIf' frf-1. "11~ +L~Dt fDtIf"~ ";1-+00- or unbound printed version of scripture of any
l.., religion.
OD' ,'ht;:"" h'i ODbmt;:"'" CD:";1-ce "117~
"DtCDm h""""~ "~II ~IJ h;1-hl\- ." fODIf' 2) The exemption for books generally does not apply
OD-o"" ";1-rf-00- CD~9" "A;1-+00- f~~lI7lf"" to an audio recording that is a spoken reading of a
;tth-c:~ ~9"C +L~Dt.,..,. ~lfl"AIi
printed book, except that the exemption under
I' f"":( ",.,.;t ~ ,o-h~~..,. ",.,.;t 1 (CD)"'~"P'~t-'
Article 8, Sub-Article (2)(p) of the Proclamation
CD~9" hq~ f"I1A ""qT~ l1sP~ o+,,~
f+H;1:( +'1';1& OD','ht;:"" CD1."1C ODt10- CD~9" applies to import and supplies of talking books (in
0"1C ~h'l' ODt1rm l.tL +L'Dt hDtIf' Oh+.,.C cassettes or other forms of recording) specifically
"tt.I\-~ +'1';1& OD','ht;:"" + L~ Dt "~If' 9"11 designed for the blind or severely handicapped.
1K" lit~ t..1.t,./A ~;J(''''' ;JILtIJ "''PC Iii ;J1..,P' ~I"',) Iitfj~ 'i.9". Federal Negarit Gazeta - No. 193111December, 2002-Page 2004

tI~~ r CHAPTER 3
Off.e" fOlJilh.l1 ~tI :J'tlil Supplies Subject to Zero Tax Rate
fDIJ.hL~I1:flD- ".}>CP"'~ 34. Substantiation of Zero Rating
@! ff.e"fOlJilh.l1 ~tI "'L~DIJ. oPlf)'1 ilI\OIJill'-;"" Where a registered person has applied the rate of zero
f "'oP"1 0 lD- (}lD- 0 Il tJ 1.111 oP IP~..,. I\".}>C P-I: ff.e' percent to a supply under these regulations, the regis-
fOlJilhL1 ~tl1 "'L~DIJ. 11.l1 hlf';; ff.e' fOlJilhL1 tered person shall obtain and retain such documentary
~tl1 l\oPm+9" 11<h fDIJ.11.C~"'" 'hfi O:J'tI(}. IMP' proof acceptable to the Authority substantiating the
~ 11)1 .,.+I1f,""" 11\ :flD-1 f (}.,.('0 oP lj{ sP~ .,.+11 I\-> person's entitlement to apply the zero rate to the supply.
oP 111 ,,1\ 0""::
35. Export of Goods or Services
c9~ iJ:J>sP~1 'hfi "1~"l1\->"'~1 m1.lD-6f.I" ill\oPl\tI 1) In this Article-
Ii' OlltJ "'+'" lD-il1':- (a) "export country" means any country other than
0) " iJ:J>sP~ fDIJ.1\11-0"" "1 C" OIJ1\"" h"- ""f"k 1
Ethiopia and includes any place which is not
lD-Q;t. 11\ OIJfi:flD-9" "1C ll.1f1: h"- ""f"k 1 lD-6f.I"
situated in Ethiopia, but does not include any
fDIJ.1~1 OIJfi:flD-19" P:J' f,ca9"t-~:: 1f'i9"
specific country or territory that the Minister of
f11"11fi h.\'1'iDIJ. ~OIJ"" DlJ.til""~ ODlJ.fmll)lD-
Finance and Economic Development may by
oPoP t.1 iJ:J> sP~fi
"1 ~ "l 1\->.,. ~ fDIJ.1\11-0"" "1 C Directive designate as one that is not an export
.,.11 I\->"f,m (}.('o9" 11I\->fDIJ.(}f,oPlD-1 f.,.1\ f "1 C
mf,9" "l""" "f,ca9"C9"==
country;
1\) "h"- ""f" k 1 m 1. lD-6f.I""1 C f.,.1\ 11-" OIJ1\"" f.,.oP
(b) "exported from Ethiopia" in relation to any
movable goods supplied by any registered
"10 (}lD- 07i16f.1" mf,9" 0,&;,0. 7i16f.1" il9"9""""
oP IPl"" hDIJ.1+C 11:flD- fDIJ.1+.,,+ (}. iJ:J>sP~ ;JC person under a sale or credit agreement, means-
1) consigned or delivered by the registered person to
0""'":-
Ii- 0"'oP"1 0 lD- (}lD- .,.+ (n~, 111\0"" "1 C 0 DlJ.1~ the recipient at an address in an export country as
".('ot-?f f.,.l\h l\oPlf). O"l11C "il1{llD- 111\P' evidenced by documentary proof acceptable to the
~ 11)1 .,.+ 11f," ..,. 111\lD- f (}.,.('0 oPlj{ f.,.l Authority; or
;J1m: 2) delivered by the registered person to the owner or
I- "lD-e"TI\). iJ:J>sP~m1.DlJ.I\ 11-0"""1C fDIJ.:}1f charter of any foreign-going aircraft when such
h If., f"'oP"1 0 lD- (}lD- m1.lD-6f.I" "1 C 1\DIJ.'t.('o aircraft is going to a destination in an export
"lD-e'TI\1 111\0."" mf,9" .,.ht-f, iJ:J>sP~1 country and such goods are for use or consumption
ll.1illtl11 mf,9" iJ:J>sP~0 "lD-e'T 1\). lD-il'l' in such aircraft, as the case may be;
01'.}>9" I\f, fDIJ.lD-lt-hlf.,: 2) The following supplies are zero-rated exports within
I- fDIJ.h.,.lt-"" m1.lD-6f.I" "1 C fDIJ.1\11-".}>CP"'~ 0" If}t. Article 7, Sub-Article (2)(a) of the Proclamation:
"'+'" ~ 10-il "'+'" 1 (0) oPlPl"" Off.e' f OlJilhL1 (a) a supply of goods where the supplier has
~tI :J'tlil fDIJ.hL~I}:flD- fi:flD-; entered the goods for export, pursuant to the
0) ".}> t-{llD- m1.lD-6f.I" 'h 1-\1\ 11- 0 ~9"~tI "If ;Eo
Customs Proclamation, and the goods have
oPlPl"" -\tll\t-ll.f"1 flJPl\l1:flD- 'hfi 0".}>t-{l1lD- been exported from Ethiopia by the supplier;
h"-""f"k1 m1.lD-6f.I" "1C f.,.1\11- iJ:J>sP~: (b) a supply of goods where the Authority is
1\) 0".}>t-{l1lD- h"-""f"k1 m1.lD-6f.I" "1C f.,.1\11-
satisfied that the goods have been exported
ill\oPlf). f:J'tI(}. 111\P'~1I)1 OIJl;J166J. 111
from Ethiopia by the supplier;
11:flD- iJ:J>sP~:
(c) a supply of goods where the goods are not
m) ".}>CP-I: O.,.LfJoP 1.ff. 0"-""f"k1 lD-il'l' 1A"0~
.}>t- (llD- 0~9"~ tI "If ;Eo oP IPl"" 1\" 1 C
situated in Ethiopia at the time of supply and are
'hfi
" not to be entered into Ethiopia for home
lD-il1' ~}!:J' 'h1-\lD-lt- m1."1C oP~(t f0lJ1il1
1}:flD- iJ:J>sP~: consumption pursuant to the Customs
oP) hlltJ O:J'~ h"'"l"~"" ;JC 0"" Proclamation by the supplier of the goods;
'" +'I'''-~ Olt., (d) a supply of services directly in respect of
oP11.('o f "'(}m "1 ~ "l 1\->""
(i) "1~"l1\->-I: O"'(}mO"" 1.ff. h"-""f"k1 (i) movable property situated outside Ethiopia at
lD-Q;t.f., 0 l .,.,+.,,:J>7i 111l"": the time the services are rendered;
(ii) O~9"~tI "If ;Eo9"iJt-~ ~ oPlPl"" 01.ff.1 (ii) goods temporarily imported into Ethiopia
ce.,"" m1. "-""f"k 1 fDIJ.10- iJ:J>sP~: under Chapter 5 of the Customs
(iii) "h"-""f"k1 m1.lD-6f.I" "1C 1\"-1\11- Proclamation; or
iJ:J>sP~" 0 "'(}mlD- ""C~9" fDIJ.1i L ). (iii) a supply of goods referred to in (a) or (b) of
04.1.~ (1\) (Ii) mf,9" (1\) (I) f"'oPl\h-l: the definition of "exported from Ethiopia" ,
iJ:J> sP~ ".}>CP"": (e) a supply of goods in the course of repairing,
IP) flltJ (oP) (ii) "'L~DIJ. renovating, modifying, or treating any goods to
"'+'" 10-il "'+'" 1
I\DlJ.If111:flD- iJ:J>sP~ 1'1fi: iJ.('o."..,.: 0IJ?f?f1 which Sub-Article (2)(d)(ii) of this Article
mf,9" t'htl9"fi 00lJ .('ol"l ,£1."" 1'.}>9" I\f, fDIJ.lD-lt- applies and the goods supplied
iJ:J>sP~ 'hfi (i) are worled into, affixed to, attached to, or
(i) O'h.,lltJ iJ:J>sP~ I\f, f"'l\m~: f"'1mOD-: otherwise form part of those other goods; or
h'h"IlV- ;JC f""'~ mf,9" f'h.,IlV- "11~ (ii) being consumable goods, become unusable
flf). iJ:J>sP~: or worthless as a direct result of being used in
(ii) 01'1fi OiJ.('o."..,.:00lJ?f?f1 mf,9" 00lJil.,.l1h1 that repair, renovation, modification, or
P't-sP~ ,£1."" 1'.}>9" I\f, fOlJf,lD-lt- mf,9" treatment process;
'P;J fOlJf,'i t-:flD- f~}!:J' iJ:J>sP~:
1A" In:~ ~1.~A ~.?(,..,. .?UtIJ
"TC Ii ;J ",r ~I"''' Iin~ ,.,.. Federal Negarit Gaz~ta - No. 193111December, 2002-Page 2005

l) hh.+f"A"1 m-~ tu\ ODt.+ tD~" Ollv- ODt.+ (f) a supply of services directly in connection with
,,~ "7«i:fm-1,. "77f7f1 h"7.("l..,.;JC O., ;J- land, or any improvement thereto, situated
a+ll" v-1.;J-f+f1m "1/.\..,tt-+i outside Ethiopia;
(1) "hh.+f"A"1 tDf..m-6£""1C f\+"h- iJ:J>9'"f" (g) a supply of services to a non-resident person
O+f1mm- +C.,.,. h"7.('f~). O~f../.\ f\(i) tD~"
who is not a registered person comprising the
f\(1) h+ODf\h-J: iJ:J>9'"f~:"C{1+ ;JC 0+""
arranging for the person of a supply of goods
0h.+f"A"1 m-l\1' '1CPt1\/.\11"'1 1/'\+OD"10 f1m-
f"7.f1m- "1/'\'" tt-.,."f: referred to in (a) and (b) of the definition of
('f) hh.+f"A"1 m-~ f+f1m-"1/.\..,tt-.,."fi "exported from Ethiopia";
.,.) hlllJ O;J-"f 'h+"l"';'+ "1/.\..,tt-.,."f Ol\+"'Ci (h) a. supply of services physically rendered else
0h.+f"A"I'1CPt"/.\II"'1~«ih1/.\..,tt-+0+f1mO+ where than in Ethiopia;
1.1f.hh.+f"A"I'm-~ f\'10l f1m- f+f1m- "1/'\'" (i) a supply of services to a non-resident person
f\O.,."ff who is outside Ethiopia at the time the services
(i) 0h.+f"A"1 m-l\1'h"7.1~ f"7~1"'''''''f1-
are supplied, other than a supply of services;
'H1l~ ;JC 0., :," f"7.11'" 1\1/.\..,tt-.,."fi (i) directly in connection with immovable
(ii) "1/.\ ..,tt--J: h+f1m, O~" f"7.1.,...,.,.f1m-
property situated in Ethiopia;
1-nl-rhh.+f"A"1 m-~ 11/.\+"h Ol\+.,.C
"1/.\..,tt--J: O+f1m 1.t&.h.+f"A"1 m-l\1' 11f\ . (ii) directly in connection with movable
property situated in Ethiopia at the time the
;." f"7.1"''''4:l\ 1-nl+ ;JC O"'1';J- 0+""
v-~;J- f+f1m "1/.\..,tt-+i services are supplied unless the movable
(iii) 0h.+f"A"1 m-l\... "7«i:fm-1'- ;J-hl\ f"7.h~ property is' exported from Ethiopia sub-
/.\0+1 "1/.\..,tt-+ AODl\m+ OD;J-.,.-n1 sequent to the supply of services;
f"7.~'-';' "1/'\'" tt-.,."f: (iii) comprising the refraining from undertaking
(iv) h.+f"ltl m-l\... ;J-hl\ f"th~/.\0+1..,-n~+ any taxable activityin Ethiopia; or
f"7.111"£.("1f1m- 1f\"7tDh1 f"t~,-.;. "1 (iv) comprising the tolerating of another person
/.\ .., tt-.,. Ti
0) f"7. h + It-+1 f"7.~9-';' "1/'\'" tt-.,."f,- undertaking any taxable activityin Ethiopia;
(i) O"iJ,-C'Jice u-n+ OD-n.,."fhh.+f"A"1 m-~ (j) a supply of services comprising-
f\ODm"''- "7fttlu1f1-of ODh;J-+/'\i ODl\m+i (i) the filing, prosecution, granting, main-
dUmO:"f "7" cPiDCf "7"'+"f\~i ~:J>.(" tenance, transfer, assignment, licensing, or
ODhm+ tD~" +~~"7. ~1-\11"1"7.("l..,: 'enforcement of intellectual property rights
(ii) 010-l\ ~1"'X- «i) f+ODf\h+m-1 "1/.\..,tt-+ for use outside Ethiopia;
hODhm+ ;JC 0+"" "l\~"1. fll")' +=\.«;:os (ii) incidental services necessary for the supply
"1/'\'" tt-.,."fi
of services refePred to in (i) above; or
(iii)f"iJ'-C'''ce U-n+ OD-o.,."f1 hh.+f"A"1 (Hi) ,the acceptance by any person of an
m-~' OOO-It-tD~" Oh~A 01':"'- ,,~
hIP/CP/.\ f\OD;J-.,.-n ..,1..:'" fD7.1h1f1- v-~;J-
obligation to refrain from pursuing or exer-
9'"T1 ~O/.\: . .., cising in whole or part, intellectual property
rights for use outside Ethiopia;
r' 0ll1J ",..,.X- ODlPl+ CDf..m-"P'"1C fD7."h- iJ:J>9'"f~«i
+"DJ:f 111/A..,tt-.,."T01f.C' f"7hh~ Ah ;J-hf1- ~1-\h~ 3) To obtain zero rating for the export of goods and related
/.\ I1:fm- 1,\:"7.("~.., iJ:J>9'~ OD7.tDl1l'O + tD1.-0 fD7.11 m- h. §ervices under this Article, the exporter, at the port of
"
iJ*9'"f1 f\M "7."'f~ ~«i Ol1f\P'/.\tIJ)' f"7.mf4:m-1 exit, must identify the goods and present documentary
ff1'1.(" ODl)f "7:",l-n ",f\O+u proof required by the Authority.
§. O"'r;( "''''X- 1;10-11 I(U) tDf..m-6£i' "1C f"7."h- 4) Zero~(ating.for exports under Article 7, Sub-Article (2)
"'~'t
lJ:J>9'"f01f.C' f~hh~/.\h ~hf1- ~1f.."7.h~/.\I1:fm- (a) of th~ Proclamation does not apply to any export of
f+f..'111m-ttm-~ 101 fDt/.\htJJ4 . ":"t-o. .
OD/.\(ttDf.."1C
goods which have been or will be re-imported to Ethiopia
"h111:fm-
. . tD~'- f\"7.1l\111:fm- iJ:J>'I'"f +~~"7.
by th~.supplier for export.
"~1I"1'-::
~. f*ot."107f~iJ.4-9'~1 tDf..aJ.6£""ic f\"7./.\hf+OD"10 5) _'A ~upplyof~gi~le Personal property (including natural
.-
"'1~f*L+C'> 1I>ft+'dJ-m...,."f1 ""'-C' "7«i:fm-1'- . resources; b~tnQt ,in.cJuding spirits, beer or tobacco)
..,,,.4-ce UI\9-+' '11t:fm-1iM/.\-' 1-ol.,."f )f"/.\te/.\ . mad~.byar~~s~r~person to a registeredrecipientwho
lIPftt.tI'T1i o.@lD~9"'+"IfIl""'f,a.l.'-C) f('fro ~1f..lI"'1i . :willexporttf\e.goodsin zero-rated,if all of the following

hlllJ n;J-~ 'f+Hl"~ v.~;J-9'"f f1.".7.It- iJ:J>9'~ 1f.C' conditions are met:
,
MtmL1/.\tJ "'L~"I. f"t'f..C'll1:fm- ~II"«i/.\:- (a) the recipient exports the property as soon after the
UhAVIfJ1o' ,"'tfle:" iJ:J>."J.~~'1+ ~«i "..,11-0'1+
g<><;>ds
are delivered to the recipient as is reasonable
~; , ;,J\h_f\~~Al\f1'fr..!) ODf..n~f1''''.('' P't- "11¥.("
I1IJC~ t;Q.""e-. t~.M~1A-1, f"'~ v-1.;J- ODlPl+ i. .,hayin,i regar~ to the f~cts of each situation,
" .' i~chiding the. type .ofgoods.involved
and, where
~.nP,1.t"l'" f~').Jfh:tAm- ;~tDh'«;/.\ +-Ott- 0"7.1OD+
.
.. applicable; the normal business practice of the
"6£"C' 1.1f. ~(a1', ,,:rrtJJ:o, f+lhl1:fm-1 1-ol.,."f
f\m-6£i'101 f"h hll"'1: recipient;
1~' ~iti t..1.&-A ~;J("'" ;JUII) -Ir'rC Ii :1""1"'''''1 +111121"'''' Federal Negarit Gazeta - No. 193111December, 2002-Page 2006
. .

1\) 1\h.tD- iI:J>9':r:')f1"tD- mI ,,' 1\1C h"'~1t'fcDo (b) the recipient has not acquired the "goods fot
040"" I\h1C tD-itlJ' tt:;(;1- (IJ~" 01\1C ClJeit1' consumption, use or supply in Ethiopia before
IJ':"~ I\~ m~~ 0101 ~~ 7\')"'ClJeI\- A"'II:I."I exportation;
t)Atf~: (c) the goods must not be further processed, trans-
~) hit4..l\1. H: ""1';10. Otf~ fOh') 1:" f+1.14.. m~"
iJ:J>tD-')hOY:}:}1I ., ,ClC :JC R+ll" f+LK-
formed or altered in Ethiopia, except to the
t)Atf~ Oit.,..,.c iJ:J>9':r: OI\...,.,.A-l ClJeit1' extent reasonably necessary or incidental to its
""lJJ.O?t f~C"" '/.1."" 7\')Il1~4-' Cllltl:fClJe transportation, 8fte! delivery. and before its
h')-\.,.fC m~~ O?'if'ifl ,7\~I."If1:fClJe t)~+, exportation; and'
1.1.1: (d) the supplier must. maintain evidence satisfac-
00) h:"~o.ID- iI:J>9':r: 0111-m-m1.tD1!" 1\1C f+l\h- tory to the Authority of exportation of the goods
ootf~,) fOf/.ll.;1"'1J' Dl/itl.)f
""'1.0' by the recipient.
't..- I\10-it h')+2t (?;) h4..~R~! 6) For purposes of Sub-Article (5),-
0) 111-ID- iI:J>9':r:') m1.m-~ h1C I\-I\h 1+1. 7\'i
(a) the recipient must intend to export the goods
OhC"'tn~~"" fOf/.At):ftD- ooll',).hAO"""
1\) f1I1TID-') iJ:J>9'':fm1.tD-~ h1C I\Of/.Ah f"'00"10 and must in fact export the goods;
11ID-1\00if1' 1\+1.11m- fOf/.4..1.f01I19- tJJ1.~ h1C (b) a supply to a recipientwho intends to sell to a
1\Of/.A h 11ID-h,) 1..,..4..ROOi. :"C(1"" hUmCfO' registered person who will export the goods is
~) iJ:J>9'':fO~C..,. '/.1."" 7\')Jl!A4-' f1l1tl:fClJe 7\')0\ not treated as a supply to' a recipient who will
.,.fC m~~ O?'if'ifI7\')-\1.I...,q:fm- "'11:1."1h+L1' export the goods;
~hl£ 1\lD-6f Oit.,.+C Oil:J>9'=ti ~~ 1\"1\,£ m~" (c) processing, transformation, or alteration in-
h.Of/.t)I\I£ 1\tD-1' O?ith.,.A f"'l.~~') 1\"1J1')!"'"
.
eludes preparation, handling or other activity
hl111 m~fO M +..,ClC ~t.U."6>AII 11'':''' fil:J> .

that causes a physical or chemical change in the

~m~f 0?+1I+1I! 000 ;J"') ."'iit.,.OOIJ' m1.m-9-
1\00l\h O?if.., m~~ h')1.1'i "7if"l' O"'l.~hO""
hl).'-') ~Ah"" 071:1.'1: aJy.m-9- O"'l.l\hO"" '11'')
ooh"""": 00"1') m~fO O?m-I.I: fooial1l\- h1A"Ita-
.,.~') h~lJJ.~CfOu
(0) iJ:J>9'~ m1.tD-~ h1Cf+l\h- -II'~,)
"'mID- O?itl.1f O;rhit ClI\FAtrJ~ "'+f1~~"" f11\m-
:"2t f""";J1: iJ:J>tD-m1. (JJ.6Jl"oul\h-") f"'l.1I.;J"I1J'
0111-m- fOf/."'ClI f~ithC ml.+"" 0011'') hAO"""
«91 fil:J>9'~ m~~ foo')11."lf':f ,}l\fO J\+it: f""~')itrc""
h1A..,ta-""
, .
(!. Ollil h,)"'2t ID-itlJ'
0) Ul\""~")itrc:" ~;Jtt: 11m. fll'~ h1A..,ta-:""
0?1\:" iI:J>9'':f')S'oo61i') 7\'i 'Mm-I.~
..,f\o:": ~~i:,) fO?l1C m~f01."',)~i:,,) MI.;J11J'
h1A..,f\o:": 1iJ.1"~i:1.fOOOOCOOC h1A..,l\.""f
f.,.~~h 11~f.':f')' ''''":J1:''''' 11,)-I:~~C
f 00"1 1'i fO?tD-1.Y: h 1A "'tta-+, f+=I=I"m-")
m~fO 1\00'1=111fT";J~m-' ilJi OOO;J"") f"'iit
+001J' h 1 A .., ta-:"~ tD-11
1\) um1.tD-~ h1C fOf/.OChID-C"T~")""7A"" "'1\-
000-1\-m~~ O'P~~~:" 01\...,.,.A-10"'l.1~ h",.C"
TI\,) 0?1.4ol h'i iJ:J>"~ m~tD1!" h.;C O-tl\
h-O:" htD-C"TI\,)Dl/1.4oloo"hA m~" 'iI~"~
m1.m-~ h1C fI"tt\h-i):fm- 1\m-~~"""I.~
,,,':f hh,)~ m1."'~m- t"I,,~ 7\'i .~""f")
Oh~1 0..,=1=111+..,ClC l\.r.f+""'~;I\"~~")
~m-u ,. .
~) u,}l\~ h+~ f:"~')itrC:" h1~"A-""" ~"..,.
Ii) l\:"~")itrc"" ~;Jtt:l1~hll'~ 1\1A.,.w-'f
,.' .
oit.,..,.c 119'':f')h'ilJ:J>sP'f1.-
(i) .,."m- m~fO y.,.". hliA fl\.:r-f-kn
..,11""'h!tCfI1 f-L'/.~A:II"'" h~"""A-l
mQ;1. htf ~ h,) Y: (1? hh. .}of-kl;iClJe"l
m1."'~ "''' (1;1-' , ",
'
property, other. than natural growth, but
generally does not inelude services such as
inventory-taking, refrigeration, warehousing,
export packing or repacking, export labeling,
f"'l.1l.;J export crating, loading or ul\loading; and
(d) evidence of exportation can be satisfied with
documents satisfactory to the Authority, such as
an eJport certificate from the ~ipient of the
goods in a form acceptable to the Authority.
36. 'International Transport of Goods or Passengers
1) In this Artiele-
h1A
(a) "ancillary transport services" means
stevedoring services, lashing and securing
services, cargo inspection services,
preparation of customs documentation, con-
tainer handling services, and storage of trans-
ported goods or goods to be transported;
(b) "foreign-going aircraft" means any aircraft
engaged in the transportation for reward of
passengers or goods wholly or mainly on
flights between airports in.Ethiopia and air-
ports in exeort countries or betWeenairports in
.
export countries;
(c) "intemationaltransport services" means: .
, I. the services, other than ancillary transport
.,services, of transporting p~gersor
. goods by land, water, or air.
(i) from. a place Otitside Ethiopia to
another place outside Ethiopia where
.
the.transport or part of the transport

(ii) hI\. :""A-, ,9'"fQ. ~"\1~L(1;1- Qh...,.,.A-1 is across the tenitory of Ethiopia;
"tD-itlJ' m1."'1.1 ~ (1;1-1
,.
.'. ..1'"
'., .
'
(ii) from a plaeeoutside Ethiopia to a
,

.'
(iii) OI\.."ft-A-l.m-it1' h-t,'S ',.~ hI\...,.,.A-l
, " plaCein Ethiopia;or
m-1J-m1.-t1'S (i}J-,"" ~ ' . ~.
"" (iii) from a place in Ethiopia to a place
'Of-flitiOtD-Y:' Ol\fC P'A:rwh1~"'ta-"'" '~'. . outside Ehiopi.;
1A' In:~ ~t-I:\ ~;MfI",;Jtl.1IJ
Me Xii ;J-1"1'"~I"" Iiin~ ,.,... Federal Negarit Gazeta- No.1931It December, 2002~Page
I' .,..ttw- Ohw-C'TI\1 f"t~IJ'" 'hli 0'/\'" O+tt:
f,,-o.A ho.f1i1 f11iL11i1 h1+Jt ~ "/\,/\9" O+tt:
"7~~..,." O.,.i'tmw- TC""", f"tif~ 1 'hiahlf~
~lia 00111.7fo'f1 Ott.Tf'kl w-iaT it/\ h11: (l;t-
Ott.Tf'kl w-iaT m1."t1~ "'1\ (l;t- "7~~1J:
f:' h1A 1ll-i: OfltJ TC",,'" k1.A "u" f"'Hl.H~T
h1A1ll-..,.'f hitA 00011'1 Oh11: h1A1ll-T i'tQJ.,
f"ti'tT 'hiahlf~ ~ l.ia /\ T t-1 iarCT 1:;Jtt: i'tQJ.,
fll'~ h1A1ll-..,.'f1 Q;t,..C' 6:1>sP'f1 Ott.Tf'A-1
w-iaT h"t1~ h1~ (l;t- Ott.Tf'A-1 w-iaT m1."t1~
"'1\ (l;t- 0"7~~1f f"ti'tT h.,A..,ll-T; m~'"
g' OfltJ TC""'" hk1.A (U) 'hiah (th) f.,.oo/\hi:T
.,.~~"t /\"tIl'~I1:fw-! fOO~1 h1 A"'ll-Tf
foo~1f f00111.7fo'f 'hli f6:1> "7~~1f h1A..,ll-
..,.'f1 f"7oo;F:fT h1A..,ll-Tu
I' hfltJ O;t-'f f"'Hl.H~T h~C(l""'f Oh":( h1+Jt 1
10-ia h1+Jt (I) (/\) 0"'1.~11W- oolPl.T tl.C'
f"7iah~ Ah ",~,"t ~1.l."'I1:fCPA!
u) 6:1>sP:r: 0.,.1\hoOT fw-~ h1C 00-1\- 000-1\-
T~'" I\~ f"tW-1\- hll'~ Oh.t-~ w-A 'hli
O;Fc.,.c w-A oolPl.T 6:1>sP'f1"7~l.-flf
/\) hw-C'TI\~ h"-Tf'A-1 ~ m1.l1'~ h1C
f"tOC 'hli 6:J>sP:r: Ohw-C'TI\1w-ia1'/\tt:}!;t-
m~'" T~9" I\~ f"tW-1\- 'hiahll'~ 1:l.ia h"-T
f'kl W-QJ.,/\"t~1f hw-C'TI\1 l1/\o.T m~'"
"'ht-~ 6:1>,,'f1 "7~l.-fl;
th) , /\,.. o+tt: fT t-1 iarCT h 1A..,ll-T
ooiamT;
00) htt.Tf'A-1 W-~ /\"t~1f hw-C'TI\1 f1'1li:
f,)J; T m~'" fOO-l\- 61:PfT h 1A..,ll-T
ooiamT:
IP) hfltJ O;t-'f f"'Hl.H~T1 h1A..,ll-..,.'f omh,A
m~9" 0"'1\ i'tw-h"7it~~T "'~1I'1 O"-Tf'A-1
~,,~ I\AII'~ IA",ooH10 i'tw- O+1';t-
ooiamT:
(i) h"-Tf'A-1 W-~ /\"t~1f hW-C'TI\1 0"-
Tf'A-1 W-hT I1/\OT "ltl. f"ti't1' f"7ia+
li11:: f"7-fll.C: f"7J;1f fOO1-+T h1A
..,ll-T:
(ii) h"- Tf'A-1 W-6J!"f"t~1f1 hw-C'TI\1
pt- I\~ h"7"A m~'" h"7ia+J;1.C ;JC
O+IIH h1A..,ll-T OOiamTf
l.) hfltJ O;t-'f f+Hl.H~T1 f"tlitTT h1A
..,ll-T O"-Tf'A-1 ~,,~ I\AII'~ IA+ooH10 i'tw-
ooiamT=-
(i) ffltJ h1+Jt 10-ia h1+Jt 1 (00) m~'"
(IP) +~~"t f"t1l'111:fW-1 h1A..,
"...,.'f:
(ii) /\T t- , iar CT 1:;J tt: i'tQJ.,f II'~ h 1A..,
ll-..,.'f, lJJ.9"C' 6:J>sP'f1 0"- Tf'A-1
W-iaT f"7~~1f h1A..,ll-T:
i't) ""-Tf'A-1 W-iaT ~".~ IAII'~ IA+OOH10
i'tw- /\"tlitth.1.w- f'l{t'C Tt-1iarCT
f"ti't1' fT1li 'hli flJ1:PfT: f')J;T h1A..,ll-T:
r!J%' /\"-Tf'A-I-flch.t-'£ 111h ia/\"t+C-fl mc~
/\"-Tf'kl-flch.t-'£ 111h f"t+C-fl mc~ Oh".:( h'+Y\
% 10-ia h1+Jt (I) (th) oolPl.T tl.C' f"7iah4t1 Ah
+4t~"t f"t1.l...,OT "-11'1 /\"-T"A-1 -flch.t-~ 111h
h1A..,ll-T 'h,-\w-A m1.h1C f"t111 mc~ Oh".:q:
h1+Jt ~ 10-ia h'+Jt (I) (00) oolPl.T h;t-hft- ~, ~aJo:l
2007
2) the service,sof transporting passengers from a place
in Ethiol>ia is to another place in Ethiopia to the
extent that the transport is by aircraft and cons-
titutes "international carriage" as defined in Ar-
ticle 8 of the Convention on International Civil
Aviation.
3) the services, including any ancillary transport
services, of transporting goods from a place in
Ethiopia to another place in Ethiopia to the extent
that those services are supplied by the same
supplier as part of the supply of services to which
(a) of this definition applies; or
4) the services of insuring or the arranging of the
insurance or the arranging of the transport of
passengers of goods to which (a) to (c) of this
definition applies;
2. The following supplies are zero-rated supplies within
Article 7, sub-Article (2)(b) of the Proclamation
(a) a supply of the goods under a rental agreement, or
agreement for chartering, where the goods are used
exclusively in an export country;
(b) a supply of goods delivered to the owner or
charterer of a foreign-going aircraft when the
aircraft is flying to a destination in an export
country and the goods are to be used international
transport services;
(c) a supply of international tran~port services;
(d) a supply of services directly in respect ofthe repair,
maintenance, cleaning or reconditioning of a
foreign-going aircraft;
(e) a supply services directly to a non-resident person
not being a registered person, otherwise than
through an agent or other person;
(i) comprising the hapdling, pilotage, salvage, or
towage of any foreign-going aircraft while
situtated in Ethiopia; or
(ii) provided in connection with the operation or
management of any foreign-going aircraft;
(t) a supply of services to a non-resident person
who is not a registered person comprising the
arranging for the person of-
(i) a supply of services to which sub-Article
(2)(d) or (e) of this Article applies; or
(ii) the transport of goods, including an-
cillary transport services, within
Ethiopia;
(g) a supply of services comprising the repair,
maintenance, cleaning, or reconditioning of a
railway train operated by a non-resident per-
son ~ho is not a registered person.
37. Supply of Gold to the National Bank of Ethiopia
A supply of gold to the National Bank of Ethiopia is
zero-rated under Article 7, Sub-Article (2)(c) of the
Proclamation, and the import of gold to be transferred to
the Nationl Bank exempt under Article 8, Sub-Article
(2)(d) of the Proclamation.
1X-Jln:~ ~I..t-A ~;J~"" ;JILIIJ~'1'C Ii :f1",P' ~Jl"" Iin~ Ii,"', Federal Negarit Gazeta-No. 1931I1December,2002-Page2008

r!}:!;-OOD"}"''''I>i' f"7.1~"} ~C~:,. ial\"7ia"'''I\~ 38. Transfer of a Going Concern

""
li- ""}~ f"}"'~ JP~ ~"}c}>ia.4>(\ 11D-~ 011D-~ 61"9" 1) The transfer of all or portion of a taxable activity as
Oh4.A OoD"}.,.".,.ia ~"}1."7.1~~C~:,. f.,."I\L
"" a going concern is a supply in the course or
~"}1.IJ'~ O"}..,~ JP~ ~"}:"ia.4>(\8£1.:" 61"9" f"}"'~
JP~tlJ4"} m1..,.?f,\ I.lJr l\"7i1';J1C ~"}1."'hlJ'm~ furtherance of the taxable activity under _t\rticle4,
":"C{1:" ~"}1."7.",mC O"ep~ ""}"'2t § "}(J.{, Sub-Article (9) of the Proclamation. If the tranfer
""}"'2t (it) "'1."}"'~Au ial\lJ'~9"f"7ia"'''I\4« .,...,flC meets the requirements of Article 4, Sub-Article
0"":( ""}"'2t § "}o-ia ""}"'2t (I) ~lJ' ""}"'2t j "}o-ia (10) and Article 7, Sub-Article (2)(d) of the
""}"'2t I (OD)f"'HlH~:"") ODI\h.I~:f f"7.1~"
hlJ'~ ut: f"7iahLJ' All "'L'''7. ,,1.l..,O;l'Au Proclamation, the transfer can be zero-rated. In
Oh":( ""}"'2t § "}o-ia ""}"'2t (Ili) O"'HlH~:" appropriate cases described in Article 4, Sub-Ar-
v-).;I'~:f Oh4.A 61"9" 11D-~ 011D-~ O"'hlJ'm~tlJ4 ticle (11), a portion or the entire transfer that is zero-
f"7ia"'''I\~ .,...,flC fUt: "7iahLJ' All "'m.+"7.
rated to the supplier may be treated as a taxable
~ "}"lIJ'"} h.,.1.l11 f"7ia"'''I\4« .,...,flC OOD"}.,.".,.ia
11\1D-"}~C~:,. 1\1tfID-(aID-;l'llia f"7.hLAO:" transaction to the person acquiring the going
""
"'11":" ~"}1.IJ'~ .,.1.Co) "",m~Au concern.
I- fUt: "7iahLJ' All "'m.4>"7. I\ODIJ'"}.,.epep" m1tj:f 2) To obtain zero-rating, the parties must comply with
f"7. h.,. ~:,."} "7~,,:,. ,,1\ fITID-U
U) "'11"-1: OOD"}.,.".,.ia f"7.1~"} ~C~:,. the following requirements:
"" (a) The transfer must be of a going concern
h""}~ f"'ODH10 (aID-mI."''' f"'ODH10 (atlJ4
f"7ia"'''I\~ .,...,flC ODIJ'~ ODl;J11' "1\0:"r: between registered persons;
1\) f"7ia"'''I\~ .,...,flC f.,.LOOD ODIJ'~"}f"7.1A2t (b) A notice of the transfer must be submitted in
O"ia"'''I\LID- ~lJ' O.,."I\LI\:" (aID- f.,.Ll
ODO:""7ia;l'mctl 1\;I'1lfa- flI\JPAtIJ") OD:"ll1
writing and signed by the transferor and
"I\O:"u transferee;
th) "7ia;l'mctllD- f"7ia"'''I\4« .,...,flC O.,.LOOD (c) The notice must be furnished to the Authority
°llli"'"} 1.UlD-ia1' 1\;I'Ilfa-flI\JPAtIJ"} I\.1.Cia within 21 days after the transfer takes place;
"1f1Au
OD) "7ia;l'mctllD- ial\":"C{1-1: ODlPl;l''C flJ'~ and
"'~f":f"} f"7.Hl1fC ODIJ'"}"1\0:"r: (d) The notice must include the essential details of
c- OOD"}.,.".,.ia 11\ ~C~:,. I\.flA f"7.:fI\tlJ4 ~fa-"} the supply.
""
:fit- I\.IP~ f"7.:fAlJ' 10. f"7.1OD~6J!-I "7ia"'''I\4- 3) A going concern is an income-producing activity
h.,.LOOD 0:\" O~C"'m~~:"II\"7*l1' f"7."}.,.".,.ia
~lJ' 611.4.:"9" l\. "}.,.".,.ia f"7.:fA f\1J'"} ~ID-r:IJ'tj9" capable of separate operation that is in fact
-MfI~'C ~ "}:"ia.4>(\ f"711.C'" 1\611.4.:" "IP~A operational and capable of being carried on without
+11it- f"7.;I'(al1 f"}"'~ JP ~ I\.IJ'"} ",,:fIA9"1I interruption after the transfer, but not a dormant or
§. f.,."I\LID- f"}"'~ JP~ ":"~4. fI"IJ'"}9" mf,9"
prospective business.
fh(al OODIJ'~9"1l"}1"" 1\8£..,11"tIJ~~:fl I\"ia"'~~
~~:fl I\fll\"1.~~:f 61"9" fh(al"} (aID- "}l1l"" 4) A transfer can be of a going concern even if the
~"}"l1t1J~ 1\"7.719"I\II7lJ'TID-9" (aID-OOD"'''I\~ transferred business in not profitable, or is being
"'''
f"7.1~ 0.1J'"}9" OOD"}.,.".,.ia "f, f"7.1~ IJ'tj transferred to a liquidator, receiver, trustee in
""
f,m(a~Ar:
bankruptcy, or other persons appointed upon the
~- OOD"}.,.".,.ia "f, 11\") ~C~:,. O"7ia"'''i\~ .,...,flC
Ut: f"7iahLJ' All .,.L '''7. I\.IJ'"} f"7. :f1\1D-~C1. i: insolvency of registered person.
f"'QJ.07~ ~(\..,. ;l'llia "ep~ OOlJ'O"" .,.") mf,9" 5) the transfer is zero-rated only if it taks place on or
hilt} .,."} 0:\" f.,.LOOD hlJ'~ 11;F WD-r: after the effective date ofthe VAT.
}- OOD"}.,.".,.ia "f, 11\,} ~C~..,. f"7ia"'''1\1j: .,...,l}c
6) A transfer of a going concern comes within the zero
O"ep:( ""}"'2t j "}O-ia""}"'2t I (OD) 0"'1.~11tlJ4
ut: f"7la hLJ' All 1\.11.,...,.f"7. :f1\1D- 0 OD"}
.,.".,. ia rating of Article 7, Sub-Article (2) (d) of the
11\"} f"}"'~ JP~ h"liclllJ' "7"'OC 0.11..,f(atlJ4~"" Proclamation if the transfer is to a person with no
""
ODl1"" 611."'(am ID- \rfl"} OD 1 1\mT"} f OD" (a1\ f .11.., previous interest in the business, or is a a transfer of
"*9" 1\1D-1'"7~l'" mf,9" f"}"'~ JP~ID-") "11d1.~
an existing business involving only a change of
:"Cb OD.,.fC hlJ'~ ~ID-U
j- f"}"'~ JP~ID- ~fa-"}:fit- OD"}.,.".,.ia~iah;F1\~lia legal entity or form of doing business, such as from
f.,."I\LI\"" (atlJ4 10. f"7.1 OD~Q;1,1D-")~ "}:,.ia.4>(\ a partnership to an incorporated company.
~fa- ~") "l1118£~ ODI.l.,. "iaL" 1. ""IJ'"}9"1I
7) It is not necessary for the transferee to operate the
:!;- f~C?f ODt."""} "7ia"'''I\~ oODi.,.".,.ia 11\"}
~C~..,. "7ia"'''I\~ .,.1.C1- ""m(a~u "" IJ'tj9" particular income-producing activity acquired, so
~fa-"} :fit- OD"}.,.".,.ia ~iah;l':f ~lia f"'tn"li long as it is capable of separate operation.
ODt.:""} hOD"'~I~=6 ~lJ' hbi1-fo=t: ;JC f"7ia"'''I\~
.,...,flC OOD"}.,.".,.ia 8) The supply of farmland alone is not a supply of a
11\"} ~C~:,. "7ia"'''I\~
"" going concern if it can be separately operated.
"1J'lJ'Au
1K' liti A.1.~A ";J/.:t, ;JUII) cfl~C Ii ;J-1"'1P'~I"',) Iin~ ~.9".
i' oou'.,.".,.h /tf, 11\' ~'c:E-"" "III/h.,./tl\~ .,...,qC o~c..,
m~~"" ".,.LfJOU 0.If' 9": "h"'''/t4Lm- ~'i ".,./tI\LI\""
(\m- ""'OU"1n- 11~1f~ ~'i oou'.,.".,.h /tf, 11\ .(-c:E-""
":"cP"" ".,.LfJOU If'i ~'Jt~mC Ooum":" O"cp:(
","'2t 1 ,o-h ","'2t g (ou) OUlPl"" 0-1\1:9" "Ll
00-0"" III/h~m-tl O,'b'" o"'m"'~m- 1.tf. m-h1' 11~"'lO
tf.C'"III/hhL/ ~h "'L~"7. ~'Jtlf' III/.(-l.., "f,:F~9"::
I' III/h~m-tl ""7."'CoflO"""tt'li ""1.tf. ""7.m(\~m- o"cp:(
"'+2t Ii ".,.oul\h.,.m-, ,,:"CP1: .,.LfJOU""7.q~o..,.,
1.tf. ou IPl"" 0111/
.(-l.., ~m-u
IIi' 0ou,.,. ".,. h /tf, 11\ .(-c:E-"" ".,./t I\LI\"" (\m- "h"''(-tp'
""'OU"10 11~1f~! tf.C'"III/hhL/ ~h 1\":"CP1: .,.L'III/.
1\.1f' ""7."fI\m- "III/h.,./tI\4- .,...,qC O.,.LfJouO"" .,.,
""'OU"10 ~'1.If~ ~m-II
Ig. "'CP'Pf, m1'i"f .,.L/t1.m-, III/h~m-tII"'ln- 0.If' 9"
0"'1':( "''''2t 1 ,o-h ","'2t g (ou) 0"'1.~11m- OUlPl""
"III/h.,./tI\4- .,...,qC 1\tf.C'"III/hhL/ ~h ofl41"f,If' ""'l
~'1.If~ : 1\":"CP1: ".,.LfJoum- h~1 ".,.t;U.III/&~(\..,.
~hh' "III/f,t;U.9"C"'1.If~ Um~~1J OOUIf~9""111/h
.,./tI\4- .,...,qC ~hh f,hL~O~~: ".,./tI\LI\""9" (\m-
0"'1':( O.,.L.,.1.m- oum' "~hh III/"''i~h ~'Jt1.l"'I\""
I\.mf,:" f,"f/t~1I
Ie. OtUJ ","'2t OUlPl"" I\~h"" ql\P'~tIJ' "1II/."'COm- 13) The notice to the Authority required under this Article
III/h~m-tl ".,./tI\4-..,., 'ofll.,."f ""'''.7./t 1JC1JC:"~I'.c;
,~, ".,./tI\L 'ofll"" "101 CP;1:"h.,./t/t4Lm- ""7.111"'"
1.m-, ",..,.(- P'~ qtM: ',,"l1: ".,./tI\LI\"" (\m- O',,"l1:
""7.1I1't1.m-, ",..,.(- P' ~ , f, ~..,.. "h.,./t /t4Lm-O.,./t
1\4-..,.',,"l.,."f ",..,.(- P'~ "",11,£.(- ,,~"O..,., 1.tf. ~h
""7.t;U.9"C oulj{ oul1J "1\0""11 "~h"" ql\P'~tIJ'
h"h.,./t/t4Lm- mf,9" h.,./tI\LI\"" (\m- mf,9" ho-l\1:9"
.,.t;U.III/& oulj{ I\.mf,:" f,"f/t~1I
Olll/h.,.
Ii' "h.,./t/t4Lm- Oou'.,.".,.h /tf, ""7.1"fm-, .(-C:E-""
/t1\4- 9"h""" 9""1qm- ~'JtlPl1J l1.l1 ~'1.If~: 14) If the transferor cancels its registration as part of the
Oou'.,.".,.h /tf, ""7.1"fm- .(-c:E-"""11~ 1f~m-I~"'/tI\4-
/J:J>~"f"h.,./t/t4Lm- 0101 CP;1,"'lq:fm- /J:J>~"fIf~m-
f,~m~~IIIf'i9" f,tJ .(-';11. "h.,./t/t4Lm- O"cP:( ","'2t
tt'li ou.lPl"" "~hh 117"''i~h 0lll/11~q:fm- /J:J>sP"f/tf,
"'L'''7. "f,II"9"1I
I~' "h.,./t/tkm- ~'i ".,./tI\LI\"" (\m- 0;1~ Lcoum- 0"7.1'"
Cn--1-117°u~h:F "~hh h4-f, oul\l 4I1'C ~'i "9"1J1q
"9"hhC ml"''''' ~9"C ~,Jt"'I\I\4- .I\.mf,ck f,"f/t~1I
1f'i9" "~h"" ql\P'~tIJ' 1'14:m-, l\ou"'O~ mf,9"
/tl\ou"'O~ ,,":f~ P'~tIJ' "I\m-II
O,o-h ","'2t (I~) OUlPl"" ""7."'COm- 1'14: O~h""
Ii'
ql\P'~~' .,..,.qf,~""'1"f ~'1.II'~I-
0/ "h.,./t/t4Lm- h.,.t;U.III/&~(\..,. ~hh ;1C """'ft'
(\~,."f, 1\.,./tI\LI\"" (\m- ouhm"" 11\0"" ""11":
".,./tI\LI\""9" (\m- ~~u.tJ' (\~,."f O"cP:( ","'2t
01 ~hh",oul\h"'m- "1.tf. 11."" '(-lh f,JlII7~"""
,,1\ 0 ""11
l'./ "h.,./t/t4Lm- ",..,.(- P'~m- ql\n."" If'i O~"O..,.
1.tf. m-h1' ""7.LI\1m-, 117'i:fm-'9" ".,.t;U.III/&
~(\-1- ~hh /J.c; 0-1\1:9""''P'Pf, m1'i"f ~'Jth~~
",'b'" "'1.~ "I\q:fm-II
Federal Negarit Gazeta-No. 1931I1December,2002-Page2009
9) Unless the transferor and transferee both are registered
persons and both sign and file in a timely manner to treat
the transfer as a supply of a going concern as required
under Article 7, Sub-Article (2)(d) of the Proclamtion,
the transfer is not zero-rated, even if in fact it is a transfer
of a going concern.
10) The 21-day period within which the notice must be filed
is determined under the time of supply rules in Article
11 of the Proclamation.
11) If the transferee previously was not a registered person,
the supply can qualify for zero rating only if the
transferee is registered by the date the transfer takes
place.
12) If the parties file the required notice and the transfer
does not qualify as .a zero-rated supply of a going
concern under Article 7, Sub-Article (2)(d) of the
Proclamtion, the consideration charged for the supply is
treated as being exclusive of VAT, the transfer is
subject to tax, and the transferee can claim a tax credit to
the extent allowable under the Proclamation.
must include a complete list of the assets transferred, the
market value of each asset transferred, the nature of the
business conducted by the transferror and the business
to be conducted by the transferee with the acquired
assets, and the length of time the transferor's business
has been operated with the assets transferred. The
Authority may require additional information from the
transferor or transferee, or both.
transfer of a going concern, then goods not transferred
as part of the going concern generally constitute a
supply of the goods by the trasnsferor at their market
values, except that this rule does not apply to goods for
which the transferor has not been allowed a tax credit
under Article 21 of the Proclamation.
15) The transferor and transferee, upon written application
signed
, by both, may request a transfer of taxpayer
identification number and certificate of registration, and
the Authority has the sole discretion to grant or deny the
request.
16) If the appl\fation under (7) is approved,-
(a) the transferor must transfer VAT records to the
transferee, and the transferee must retain those
records for the time required for the retention of
records under Article 37 of the Proclamtion; and
(b) both parties are legally obliged to pay any VAT
liability incurred while the transferor owned the
business.
'lX- gitI "-1..t-A ~;Jt"" ;JILIIJ -Ir'1'C Iii ;r1..,p' tll +'} Iiif7~ ,-,..- Federal Negarit Gazeta - No.19 3111
December,2002- Page2010

t!)ji- tlPtIPtl f"7lD-tlJ"" P'AtlJ1 39. Directives

f1tl9':J. "7.t"'''''C t\tllJ 1.'Hl1\L'O?" f"7.l~ tlDtlPtl The Minister of Revenue may issue directives for the
9':J.1 t\"7lD-tlJ""f,:J.I\Ar: proper implementation of these Regulations.

ij- 1.1~ f"7.flljO"" +1 40. Effective Date

f,tJ 1.111 1\CP:(. hfllj ri..,. +1 "f..?"r: ffllj f,tflj A:I

These Regulations shall come into force as of the date
the Proclamation comes into force.

1\Jl'" 1\OCt;J-"'",P' f11+1 ljifj~ '-?" Done at Addis Ababa this 31st day of December, 2002.

tlPt\... tLlj'e
MELES ZENAWI
f1\.""f-*1 ~1..t-I\'e Jl'l"ht-l1.1'e tT11l\.h PRIME.MINISTER OF THE FEDERAL DEMOCRATIC
m c}>I\f, "7.t"'''''C REPUBLIC OF ETHIOPIA

{lcnc; M9" """'lI7.11:C~"" ;r"'OD

BERHANENA SELAM PRINTING ENfERPRISE