To encourage private investment and promote the inflow of foreign capital and technology into Ethiopia, the following incentives are granted by the Ethiopian Investment code to both domestic and foreign investors engaged in areas eligible for investment incentives.
1.Customs Import Duty
One hundred 100% exemption from the payment of import customs duties and other taxes levied on imports is granted to an investor to import all investment capital goods such as plant machinery and equipment, construction materials as well as spare parts worth up to 15% of the value of the imported investment of capital goods provided that goods are not produced locally in comparable quantity, quality and price. Exemptions from customs duties or other taxes levied on imports are granted for raw materials nece3ssory for the production of export goods.
2.Exemption From Payment Of Export Customs Duties
Ethiopian products and services destined for export are exempted from the payment of any export tax and other taxes levied on exports.
3.Income Tax Holidays
Any income derived from an approved new manufacturing and agro-industry investment or investment made in agriculture shall be exempted from the payment of income tax. For the period ranging from 2-6 years profit tax holiday is granted subject to council of ministers regulation issued on the bases investment proclamation No 280/2002. Moreover, the council of Ministers may also award profit tax holiday for greater than seven years. The period of exemption from profit tax begins from the date of the commencement of production or provision of services as the case may be.
4.Loss carried forward
Business enterprises that suffer losses during the tax holiday period can carry forward such losses for half of the income tax exemption period following the expiry of the exemption period.
5.Guarantees to investors
·Repatriation of capital and profits
·Guarantee against Exportation
·Ethiopian is a member of the world Bank-affiliated Multilateral Investment Guarantee Agency( MI GA)which issues guarantees against non- commercial risks to enterprises that invest in signatory courtiers Ethiopia his also signed the world Bank treaty” the International convention on settlement of investment disputes between states and Nationals of other states ( ICSID)
Any pertinent information about investment in Ethiopia, tax in Ethiopia, can be available from an Ethiopian Investment Lawyer, Ethiopian Tax lawyer, Ethiopian, Ethiopian Employment Layer, Ethiopian Labour Relationships Lawyer, Ethiopian Immigration lawyer.
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