- The draft VAT refund directive revises eligibility criteria, especially for large-scale investments, redefining “heavy investment” thresholds and potentially distinguishing between local and foreign investors.
- Refund rules for exporters are changed, increasing the refundable amount from 25% to 50% of input expenses, though experts warn this may be less beneficial than before.
- The threshold for mixed transactions is raised from 90% to 95% taxable transactions to qualify for refunds, making it harder for some businesses to claim.
- Certain entities, such as contractors for defense-related housing and capital goods lease financing companies, are now excluded from VAT refunds.
- The draft simplifies some refund processes, expands provisions for privileged entities (like embassies and NGOs), and sets stricter deadlines and requirements for audit reports and tax exception requests.
Source: capitalethiopia.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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