Article 49 — Refund of Excess Input Tax Credit

1/ If more than 50% of the value of taxable supplies made by a registered person in an accounting period are Zero-rated supplies, the Tax Authority shall refund any excess input tax credit of the person for the accounting period within One calendar month after the person filed the VAT return for the accounting period. 2/ Sub-Article (3) of this Article shall apply where the following conditions are satisfied: a) a registered person with an annual value of taxable supplies in excess of 100,000,000 Birr has made a creditable acquisition of capital goods, b) the registered person is allowed an input tax credit in respect of the creditable acquisition of the capital goods, and c) the amount of the input tax credit is not fully credited in the accounting period in which the creditable acquisition occurred. 3/ Where the conditions in Sub-Article (2) of this Article are satisfied, the Tax Authority shall refund the uncredited amount to the registered person within one calendar month after the person filed the VAT return for the accounting period in which the capital goods were acquired. 4/ Notwithstanding Article 48, a person whose registration is cancelled under Article 16 or 17 may apply to the Tax Authority, in writing, for a refund of any unapplied excess input tax credit as at the date of cancellation of registration. 5/ An application made by a person under Sub-Article (4) of this Article shall be lodged with the Tax Authority by the due date for filing the person’s tax return for the last accounting period that the person was registered or by such later date as the Tax Authority may allow. 6/ If the Tax Authority is satisfied that a person who has lodged an application in accordance with Sub-Articles (4) and (5) of this Article has an unapplied excess input tax credit at the time the person’s registration is cancelled, the Tax Authority shall refund the excess within 60 days after the person lodged the refund application. 7/ If, at the date on which the cancellation of the registration of a person takes effect, the person has an excess input tax credit in respect of which an application for a refund has not been made in accordance with Sub-Articles (4) and (5) of this Article, the excess credit shall lapse and is no longer refundable to the person.