VAT Refund Directive 24-2008 (English)

Directive No.
24/2008
A directive issued to prescribe the manner in which Value

added tax Paid by organizations enjoying special tax Privileges
in Procuring goods and services for their official use may be
refunded.
When as in a directive issued by it on 23rd day of January , ref. no

›S3/16/28/890 in accordance with the Power vested in it by article 8(4) of
the value added tax Proclamation No 285/2001 the Ministry of Finance and
Economic Development has, based on the Principle of reciprocity exempted
from Value Added tax, goods and services Procured locally by Diplomatic
and Consular missions and by international organizations having similar
status,.
Where as implementation problems have in sued from allowing goods

and services Procured locally to be exempt from value added tax from the
outset which made it necessary for initial exemption to be replaced by
refund system.
The following directive is here by issued to Provide for a system by

which value added tax paid by organizations enjoying special tax privileges
in procuring goods and services locally may be refunded.
1. Short title
This directive may be cited as # Directive No. 24/2008, A directive
issued to prescribe the manner in which value Added tax (VAT) paid
by organizations enjoying Special tax privileges in Procuring goods
and services for their official use may be refunded$
2. Definitions
In this directive:-
2.1 # Tax Authority $ means Federal In land Revenue Authority.
2.2 # Organizations with special privileges$ means Embassies,

Consular offices, International and Regional organizations and
Governmental aid agencies
2.3 # Refundable Tax $ means Value added tax paid by
organizations with special Privileges on goods and services
Procured locally by such organizations for their official use .
2.4 # For official use$ means for use by organizations with special
privileges in the discharge of their official duty, but does not
include goods and services procured for Personal use of their
staff.
2.5 #Accounting period$ means each month, with the months of

Nehasie and Puageme in Ethiopian calendar being consolidated
in to a single month and treated as such.
2.6 # Tax Receipt $ means a VAT invoice issued to Organizations

with Special privileges where such Organizations Procure
goods and services for their official uses from suppliers
Registered for VAT, to prove that, VAT has been paid on that
transaction.
2.7 #Tax$ means value Added Tax.
3. Scope of Application of Refundable Tax
3.1 Refund may be effected in accordance with this directive in

respect only of Value added tax paid by organizations with
special privileges on goods and services Procured locally by
such organizations for their official use.
3.2 Not with standing the provision of sub Article 1 of Article 3

above:-
a/ Refund shall not be allowed where the amount of tax paid

in a single invoice does not exceeds Br.100
b/ In respect of the tax payable on the cost of
Telecommunications Services (Telephone, Fax, internet
etc), The Telecommunication Corporation, up on receipt of
list of telephone, Fax and internet addresses subscribed by
Organizations with special Privileges for their official use;
shall cause the services rendered to these addresses to be
initially exempt from the tax.
C/ Goods and Services Procured locally, by Governmental

and Non-Governmental organizations and other
organizations engaged in humanitarian activities, to be
used in relief operations in response to appeal for
emergency assistance by Disaster Prevention and
Preparedness Commission shall be exempt from the tax
initially.
4. Procedure for Submitting Application for tax refund.
4.1 Each Organization with special Privileges shall on monthly

basis fill in the tax refund application form available to
Organizations with special privileges the refundable tax
corresponding to the tax paid on its procurements in the month
concerned, and submit the completed form to the tax authority
soon after the beginning of the succeeding month.
4.2 The claim for tax refund to be submitted using the tax refund
application form shall have to be aggregated and supported by
documents evidencing payment of tax.
4.3 The document evidencing payment of tax to be Presented in

support of tax refund claim shall show that the payment was
effected from the account of Organizations with special
privileges (NR account) by payment order made by NR check
issued in the name of the Organization.
4.4 The completed tax refund application form submitted by

Organizations with special privileges shall have to be certified
by signature of the Head of the secretariat of the organization
concerned or by a staff member of that organization represented
for this purpose. The documents in use and the specimen of
signatures have to be recognized and certified by the Protocol
Directorate of the Ministry of Foreign Affairs before hand and
forwarded to the tax authority.
4.5 Each supporting documents evidencing payment of tax which

organizations with Special Privileges are required to submit
along with the completed tax refund application form have to
be complete and indicate the date on which if was prepared and
issued in accordance with the requirements of the relevant tax
law.
4.6 If the Organization with Special Privileges claiming refund

wishes to retain the original tax invoice for urgent business of
its duty, the original tax invoice shall be returned to that
Organization after it was collated with a copy there of which
shall in this case be required to submit and a stamp was affixed
thereto.
4.7 When the tax refund claim is related to a construction work the
Organization with Special Privileges is executing, a letter from
the Ministry of Finance Authorizing the construction work to be
exempt from tax and a statement showing the final account of
the completed capital project has to be submitted along with.
a/ The document of contract of construction work signed

between the Organization and the Contractor and ,
b/ The document evidencing the final payment made to the

Contractor by the Organization with Special Privileges at
the request of the Contractor.
4.8 The claim for tax refund by an Organization with special

Privileges shall have to be submitted with in one year from the
date of procurement as shown in the tax invoice. No claim for
tax refund submitted after one year shall be accepted.
5. Verification of claims for tax refund and procedure of
payment.
5.1 The tax authority has the responsibility to:-

a. To verify that the claim for tax refund is proper and valid
by thoroughly examining the completed application form
and supporting documents submitted there with by
Organizations with special Privileges
b. Make sure that the supplies issuing the tax invoice have
actually registered for the tax, and declare and pay in due
time the tax they collect on their sale.
5.2 Having ascertained that the requirements listed under Article

4.1-4.5 above are satisfied the tax authority shall cause the tax
paid by Organizations with special privileges to be refunded
from the budgetary provision made for tax refund with in one
month from the date of submission of the claim.
5.3 Tax refund shall be effected by means of check to be prepared

in Ethiopian Birr in the name of the Organization claiming
refund or by causing the refundable amount to be credited to
the bank account of the organization with special privileges.
6. Entry in to force
This directive shall be effective as of ------------------2008
Addis Ababa --------------- date 2008
Sufian Ahmed
Minister of Finance and Economic
Development

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Directive No.

A directive issued to prescribe the manner in which Value

When as in a directive issued by it on 23rd day of January , ref. no

Where as implementation problems have in sued from allowing goods

The following directive is here by issued to Provide for a system by

2.2 # Organizations with special privileges$ means Embassies,

2.5 #Accounting period$ means each month, with the months of

2.6 # Tax Receipt $ means a VAT invoice issued to Organizations

2.7 #Tax$ means value Added Tax.

3. Scope of Application of Refundable Tax

3.1 Refund may be effected in accordance with this directive in

3.2 Not with standing the provision of sub Article 1 of Article 3

a/ Refund shall not be allowed where the amount of tax paid

C/ Goods and Services Procured locally, by Governmental

4. Procedure for Submitting Application for tax refund.

4.1 Each Organization with special Privileges shall on monthly

4.3 The document evidencing payment of tax to be Presented in

4.4 The completed tax refund application form submitted by

4.5 Each supporting documents evidencing payment of tax which

4.6 If the Organization with Special Privileges claiming refund

a/ The document of contract of construction work signed

b/ The document evidencing the final payment made to the

4.8 The claim for tax refund by an Organization with special

5.1 The tax authority has the responsibility to:-

5.2 Having ascertained that the requirements listed under Article

5.3 Tax refund shall be effected by means of check to be prepared

Addis Ababa --------------- date 2008

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