Customs Incentives

 

Ethiopian Investment Incentive Inventory
Incentive Name Brief Description Legal Reference Name Law Section/Article Sectors

Eligebility Criteria

(Description

Awarding Authority Implementing Authority
Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise tax) on imported capital goo

Note 1: Capital goods are defined as: machinery equipment and their accessories needed to produce goods or render services and include workshop and laboratory machinery and equipment necessary for same. (Investment Proclamation No. 769/2012 Article 2.5 (as amended)). This definition is further expanded through decision of the Investment Board to include Special Purpose Integrated Trucks and handling equipment destined for sector-specific purposes.                      

Note 2:  Time limits for enjoying this right differ based on sector, size and employment potential of investment.

# If Manufacturing or agricultural investment that has invested at least 200,000 USD, and  permanently hired at least 50 Ethiopian nationals => at any time. 

# If investment in other eligible sectors with a capital and employment requirement same as above => until five years from the date of acquiring business license. 

# In other cases => up on establishment of a new enterprise or expansion/upgrading of existing one.

A) Investment Incentives and Investment Areas Reserved for Domestic Investors Regulation No. 270/2012 (as amended)

B) Investment Board Decision

Article 12  Investments in sectors listed under the Investment Regulation No 270/2012 (as amended) except real estate development, publishing, export trade and wholesale trade

1) Eligible sector/Sub-sector of investment.............................

2) Holding of investment permit

3) Holding shipping documents (commercial invoice, packing list, certificate of origin, bill of lading)    

Ethiopian Investment Commission, Regional Investment Offices (for domestic investors)  Ethiopian Revenue and Customs Authority, 
Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise tax)on imported construction materials

Note 1: Construction materials are defined as: basic inputs necessary for the construction of investment projects. (Investment Proclamation No. 769/2012 Article 2.6(as amended)).

Note 2: This right can be exercised up on establishment of a new enterprise (before commissioning) and for expansion/upgrading of an existing one as defined under the Investment Proclamation.

Investment Incentives and Investment Areas Reserved for Domestic Investors Regulation No. 270/2012 (as amended)  Article 13 Investments in sectors listed under the Investment Regulation No 270/2012 (as amended) except real estate development, publishing, export trade and wholesale trade

1) Eligible sector/Sub-sector of investment

2) Holding of investment permit

3) Investment to establish a new enterprise (Greenfield) or for expansion or upgrading of an existing enterprise as defined under the Investment Proclamation

4) Holding of authenticated land lease or rental agreement

5) Holding of construction permit, site plan, and bill of quantity that is approved by a licensed consultant and city municipality

Ethiopian Investment Commission, Regional Investment Offices (for domestic investors) Ethiopian Revenue and Customs Authority
Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise tax) on imported spare parts # For industrial park developers and enterprises (manufacturers with 100% export) , there is no time or value limitation.

# For other manufacturers and investments in agriculture, there is no time limit but the value should not be more than 15% of the total value of the capital goods.
 
# For other investors eligible to import  capitals good duty free, there is time limit of five years from the date of issuance of business license, and the value should not be more than 15% of the total value of the capital goods.

A)Investment Incentives and Investment Areas Reserved for Domestic Investors Regulation No. 270/2012  (as amended)

B) Investment Board Decision

 Article 13 Investments in sectors listed under the Investment Regulation No 270/2012 (as amended) except real estate development, publishing, export trade and wholesale trade 

1) Eligible sector/Sub-sector of investment for import of capital goods

2) Holding of investment permit

3) Holding shipping documents (commercial invoice, packing list, bill of lading)

4) Duly completed reconciliations form

Ethiopian Investment Commission, Regional Investment Offices (for domestic investors) Ethiopian Revenue and Customs Authority
Automatic exemption/zero duty and other tax (VAT, sur tax, withholding and excise tax) on imported spare parts by textile and apparel, and leather and leather products manufacturers Automatic exception (duties and other taxed are zero rated) for list of spare parts required by textile and apparel and leather industries (list identified by sector development institutes and published by Ministry of Finance and Economic Cooperation/MoFEC) Letter written by Ministry of Finance and Economic Cooperation Letter dated 14/07/2009 (E.C)

1) Textile and Apparel industry

2) Leather and leather products industry

1) Eligible sector (textile and apparel industry, and leather and leather product industry)

2) List of spare parts required by the relevant sectors (identified by sector development institutes and published by Ministry of Finance and Economic Cooperation)

Ministry of Finance and Economic Cooperation Ethiopian Revenue and Customs Authority
Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise tax) on imported vehicles

Note 1: The type and number of vehicle that can be imported duty free varies depending on investment sector, size, nature and location of investment (within Vs outside industrial parks). Type of vehicles include: pickups minibuses, cargo trucks, SUVs, hybrid SUVs like, and special purpose trucks (crane trucks, garbage trucks, ambulances, fire trucks, refrigerated trucks etc.)

Note 2: For industrial park developers and for manufacturing companies inside industrial park, only 2 SUVs and SUV like hybrid vehicles                                         

Note 3: Manufacturing and agricultural investors which invest ETB 200 million and above, and export for three consecutive years more than 60% of their product qualify for 1-2station wagon

A) Investment Incentives and Investment Areas Reserved for Domestic Investors Regulation No. 270/2012 (as amended)

B) Investment Board Directive on Duty-free Import of Motor Vehicles No. 4/2005 (E.C),

C)  Investment Board Decision

 Article 14 Investments in sectors listed under the Investment Regulation No 270/2012 (as amended) except real estate development, publishing, export trade and wholesale trade

1) Eligible sector/Sub-sector of investment for import of capital goods

2) Investment land holding or lease certificate

3) Holding of business license (or progress report showing that the investment is actively working on establishment (shipping documents/purchase invoice showing import of capital goods, construction materials)

4) Shipping documents (commercial invoice, packing list, certificate of origin, bill of lading, LC from bank) for the vehicles to be imported

Ethiopian Investment Commission, Regional Investment Offices Ethiopian Revenue and Customs Authority
Export trade incentive - exemption from customs duties and other taxes on all imported raw materials and accessories - including packaging  materials -  used for export processing) Customs duty exemption for producer exporters, indirect producer exporters, raw material suppliers, and/or, exporters. Applicable through duty draw-back, voucher, and bonded export factory and similar schemes. Right excisable after issuance of business license. Export Trade Duty Incentive Schemes Proclamation No. 768/2012, MOFEC Export Incentive Scheme Directive 35-2005, ERCA Export Incentive Scheme Directive 86-2005, Ministry of Industry Export Incentive Scheme Directive Article 3 of the following proclamations Manufacturing and export business

1) Direct/indirect export-producer

2) Holding of investment permit and business license

3) Submission of export proposal to the relevant sector development institute

4) Signing export undertaking at the Ministry of Industry

5) Declaration of input-output coefficient

6) Export of final output within one year period

Ministry of Industry  Ethiopian Revenue and Customs Authority
Exemption from customs duties and other taxes (VAT, sur tax, withholding and excise taxes) on the import of raw materials needed for test-run production (sample production for issuance of business license) Limited to raw materials needed for sample production based on which business license will be granted. A maximum of 30 days for textile and leather, and a maximum of 7 days for other eligible sectors . Investment Board Decision, 7 January 2016  N/A  Manufacturing

1) Eligible sector of  investment

2) Company done with establishment stage and ready to test production

Ethiopian Investment Commission Ethiopian Revenue and Customs Authority 
Exemption from customs duties and other taxes on the import of personal effects by industrial park residents Right given to industrial park developers, industrial park enterprises, and workers living inside the park. List of items that can be imported duty free is annexed to the Industrial Park Directive of the Ethiopian Investment Board Industrial Park Proclamation 886/2015, Industrial Park Regulation, and Industrial Park Directive  Article 15 (2)  Manufacturing

1) Holding of certificate of residency within an industrial park at the time of claiming/exercising this right, or

2) To be an  industrial park developer or industrial park enterprise

Ethiopian Investment Commission Ethiopian Revenue and Customs Authority
Customs duty reduction on imported raw materials by import substituting local manufacturers Subject to meeting the minimum value addition threshold that varies for each sector (from 5% for manufacturing of electronics - 41% for manufacturing of wines) and  securing Second Schedule Beneficiary Certificate from the Minister of Industry Customs Duty Second Schedule Directive No. 45/2016  N/A  Manufacturing

1) Import substitution industry

2) Minimum value addition threshold (5% for manufacturing of electronics - 41% for manufacturing of wines)

Ministry of Industry  Ethiopian Revenue and Customs Authority 
Customs duties, Value Added Tax (VAT), and other taxes exemption/zero rating for the export of products Export duty exemption/zero rating for all export products Value Added Tax Proclamation No. 285/2002  Article 7(2) All sector on VAT exemption. All sectors except export of semi-processed hides and skins for customs duties  N/A  N/A Ethiopian Revenue and Customs Authority