Ceasing your tax residency in Ethiopia can be a significant step if you're planning to move abroad or adjust your tax obligations. Here's a detailed guide to help you navigate the process seamlessly.
Step 1: Determine Eligibility
Before proceeding, ensure you meet the criteria for ceasing tax residency. This typically involves proving that you no longer have a permanent home in Ethiopia, and that you have established a permanent home in another country.
Step 2: Notify the Ethiopian Revenue and Customs Authority (ERCA)
Submit a formal notification to the ERCA, informing them of your intent to cease tax residency. This notification should include details of your departure, new residence, and reasons for the change.
Step 3: Settle Outstanding Tax Obligations
Ensure all your tax obligations in Ethiopia are settled. This includes paying any outstanding taxes, filing all required tax returns, and clearing any tax audits or assessments.
Step 4: Provide Supporting Documentation
Gather and submit all necessary documents to support your claim. This may include proof of residence in another country, termination of lease or sale of property in Ethiopia, and any other relevant documentation.
Step 5: Obtain a Tax Clearance Certificate
Request a Tax Clearance Certificate from the ERCA. This certificate serves as proof that you have settled all your tax obligations and is often required by other countries when establishing tax residency.
Step 6: Update Personal Records
Update your personal records with various institutions such as banks, employers, and other relevant entities to reflect your change in tax residency.
Legal References
- Income Tax Proclamation No. 286/2002
- Council of Ministers Income Tax Regulations No. 78/2002
- Ethiopian Revenue and Customs Authority Directives
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