Income tax exemption

Invest in Ethiopia

Tax exemption calculator

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Number of years with corporate income tax exemption:

years

Number of years with corporate income tax exemption:

years

Additional tax incentives for investments in priority regions

Any investor who creates a new business in the following areas benefit from an income tax deduction of 30% for three consecutive years after the expiry of the income tax exemption period.

State of Afar (except in areas within 15 kilometres right and left of the Awash River)

State of Benshagul/Gumuz

State of Gambela Peoples

State of Oromia (Borena and Guji zones)

State of Somali

State of Southern Nations, Nationalities, and Peoples [South Omo zone, Segen (Derashe, Amaro, Konso and Burji) area peoples zone, Benchmaji zone, Sheka zone, Dawro zone, Kaffa zone, Konta and Basketo Special Woredas.

Loss carry forward

Investors can carry forward loss for half of the income tax exemption period after the expiry of the period.

Exemption from import taxes

Capital goods

1. Eligible sectors

Any investor engaged in one of the below mentioned sectors can import free of taxes capital goods and construction materials necessary for the establishment of a new enterprise or the expansion or upgrading of an existing enterprise.

Agriculture Architectural Construction
Education Electricity Engineering
Health Hotel ICT
Import trade Leasing Manufacturing
Technical testing Tourism Training

Source: Regulation 270/2012.

The exemption of motor vehicles from customs duties is determined by a directive issued by the Investment Board.

2. Conditions

Requirements

Exemption period

i) Creation of more than 50 permanent employment opportunities for Ethiopian nationals

ii) Engaged in the manufacturing industry or agriculture

iii) Investment above USD 200,000

Unlimited

i) Creation of more than 50 permanent employment opportunities for Ethiopian nationals

ii) Engaged in an eligible sector (except manufacturing industry and agriculture)

iii) Investment above USD 200,000

5 years

Spare part

Investors (operating in above-mentioned eligible sectors) are allowed to import, within five years from the date of commissioning of the project, spare parts free of taxes up to a value not exceeding 15% of the total value of the capital goods. There is no (time and value) limitation for industrial park developers and manufacturers exporting 100% of their production.

Automatic exemptions are granted to the textile/apparel/leather industry for the importation of required spare parts.

Double tax treaties

On top of Ethiopian tax incentives, foreign firms can also benefit from double taxation agreements