30 September 2024
During September 2024, the Federal Democratic Republic of Ethiopia introduced VAT on the sale of digital services by non-resident providers to local consumers. This was confirmed within VAT Proclamation 1341/2024.
Previously, foreign businesses providing digital services to consumers in Ethiopia did not have to charge VAT on their sales. However, to remove the unfair advantage that this gave non-resident companies over resident providers, the Ethiopian government introduced VAT at 15% on these types of transactions.
Non-resident digital service providers will be required to register for VAT if they exceed an annual threshold of ETB 2 million (approx. £12,200).
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