Ethiopia VAT

Section 1 -- Quick reference

Quick reference

Field	Value
Country	Ethiopia
Standard rate	15%
Zero rate	0% (exports, gold to NBE)
Filing portal	https://etax.mor.gov.et
Authority	Ministry of Revenues (MOR)
Currency	ETB (Ethiopian Birr)
Filing frequency	Monthly
Deadline	Last day of following month
Registration threshold	ETB 2,000,000 (Proclamation 1341/2024)
Voluntary registration	ETB 1,000,000-2,000,000
Turnover Tax	ABOLISHED (Proclamation 1395/2025)
Primary legislation	VAT Proclamation 1341/2024 (replacing 285/2002)
Contributor	Open Accounting Skills Registry
Validated by	Pending
Last research update	April 2026

Section 2 -- Required inputs and refusal catalogue

Minimum viable -- bank statement. Acceptable from CBE (Commercial Bank of Ethiopia), Dashen Bank, Awash Bank, Bank of Abyssinia, Wegagen, or any Ethiopian bank.

• R-ET-1 -- Investment incentive — Investment incentive may exempt capital goods imports. Verify certificate. Escalate. (Trigger: EIC certificate holder)

Section 3 -- Supplier pattern library

Supplier pattern library

Pattern	Treatment	Notes
CBE, COMMERCIAL BANK OF ETHIOPIA	EXCLUDE	Exempt financial
DASHEN BANK	EXCLUDE	Same
AWASH BANK, BANK OF ABYSSINIA	EXCLUDE	Same
WEGAGEN, UNITED BANK	EXCLUDE	Same
MOR, MINISTRY OF REVENUES	EXCLUDE	Tax payment
CUSTOMS, ECC	Check for import VAT
PENSION, SOCIAL SECURITY	EXCLUDE
EEPCO, EEU	Domestic 15%	Electricity
ETHIO TELECOM	Domestic 15%	Telecoms
GOOGLE, MICROSOFT, AWS	Reverse charge 15%	Non-resident

Section 4 -- Worked examples

Example 1 -- Standard sale

ETB 100,000 net. Output VAT = ETB 15,000 (15%).

Example 2 -- Purchase from unregistered supplier

Goods ETB 10,000 from market trader. No VAT invoice. Input VAT = 0. Pure cost.

Section 5 -- Classification rules

• Standard rate classification — 15% standard. 0% exports, gold to NBE, diplomatic supplies. Exempt: residential rental, financial services, medical, education, religious, postal, electricity/water/kerosene (domestic), bread/milk, military.
• TOT abolished; below-threshold treatment — TOT abolished. Below-threshold businesses: Category B income tax (2%-9% gross).

Section 6 -- VAT return form

Output: Boxes 1-8 (15% sales, zero-rated, exempt, total, output VAT, reverse charge output, adjustments, total output).

Input: Boxes 9-15 (local purchases, imports, input local, input imports, reverse charge input, adjustments, total input).

Net: Boxes 16-18 (net, credit b/f, net payable).

Section 7 -- Reverse charge

• Non-resident services reverse charge — Non-resident services: self-assess 15%. Net zero. Proclamation 285/2002 Art. 10. (Proclamation 285/2002 Art. 10)
• Import of goods VAT — Import of goods: VAT at customs. Recoverable if for taxable supplies.

Section 8 -- Deductibility and blocked input

• Blocked input categories — Blocked (Art. 21): entertainment, motor vehicles < 10 seats (unless transport for hire), personal/non-business use, purchases from non-registered suppliers (no valid invoice). (Art. 21)
• Cash register receipt threshold for retail — ETB 500 ETB (Cash register receipts acceptable for retail up to this amount)
• Partial exemption apportionment — Partial exemption: Art. 20(3). Turnover-based apportionment. (Art. 20(3))

Section 9 -- Filing, deadlines, and penalties

• Filing frequency and deadline — Monthly. Last day of following month.
• Late filing penalty — ETB 5,000/month ETB per month
• Late payment penalty — 2%/month % per month
• Failure to register penalty — 100% of tax due %
• Understatement penalty — 10% %

Section 10 -- Edge cases, test suite, and escalation

EC1 -- Cloud SaaS. Reverse charge 15%. Net zero.

EC2 -- Unregistered supplier. No input recovery.

EC3 -- Coffee export. Zero-rated. Input recoverable.

EC4 -- Threshold crossed. Must register for VAT.

EC5 -- Construction + WHT. 2% WHT is income tax, not VAT. VAT still 15%.

EC6 -- Investment incentive. Capital goods import may be exempt. Escalate.

EC7 -- Business gifts. Deemed supply. Output 15% on market value.

Test 1 -- ETB 100K sale. Output ETB 15K.

Test 2 -- ETB 50K purchase + ETB 7.5K VAT. Recoverable.

Test 3 -- UK consulting ETB 200K. Output 30K, input 30K. Net zero.

Test 4 -- Flower export ETB 5M. Zero-rated.

Test 5 -- Entertainment ETB 30K + VAT 4.5K. Blocked.

Test 6 -- Unregistered purchase ETB 10K. No input.

Test 7 -- Below threshold ETB 1.5M. Not required to register. Category B tax.

Test 8 -- Sedan ETB 2M + VAT 300K. Blocked.

Out of scope: CIT 30% (mining 25%), PAYE 0%-35%, pension 7%+7%.

Prohibitions

• NEVER allow input recovery without valid VAT invoice from registered supplier
• NEVER reference Turnover Tax -- it is abolished
• NEVER allow recovery on blocked categories
• NEVER compute numbers -- engine handles arithmetic

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional before filing or acting upon.

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