Indirect tax - Egypt

VAT is the principal indirect tax.
The VAT rates:

• 14% standard VAT rate that applies to taxable goods and services.
• Tabled items are certain goods and services that are subject to a special rate i.e. schedule rates. These items include professional services, petroleum products, and construction work.
• Exemptions covering 58 items of goods and services listed in the exemption list attached to the VAT Law. These include basic food products, transmission and distribution of electricity; banking services and insurance services. In addition, certain Egyptian state bodies and entities are exempted from VAT.
• Exports of goods or services, and goods or services provided to companies located in the free zones and special economic zones are zero-rated.
• Cars, air conditioning equipment and mobile telecommunication services are subject to both general rate 14% in addition to schedule rates.

While resident providers of taxable goods or services must register for VAT purposes if their annual turnover is at least EGP 500,000, voluntary registration is possible below this limit. 

However, there is no registration limit for importers of taxable goods or services, exporters, manufacturers, distributors and suppliers of goods and services that are subject to schedule rates.

Yes – for simplified registration purposes (B2C transactions).

Law 3 of 2022 and its regulation addresses the registration process for non-resident suppliers (NRS) of goods or services. 

For Business to Customers (non-registered) service supplies, non-resident suppliers should register for VAT through the Simplified Registration Regime (“SRR”), using the electronic portal of the ETA.

Law 3 of 2022 states that a non-resident supplier of taxable goods or services should register for VAT through the Simplified Registration Regime (SRR), using the electronic portal of ETA, unless the non-resident has a permanent establishment in Egypt, it should follow the regular registration regime through the PE. 

VAT returns should be submitted on a monthly basis, notwithstanding that for service providers that are exporters, importers or service providers that supply service or goods once or twice a year, the head of the ETA is to grant them an exception to submit VAT returns only for the months that include transactions only upon their request.  

Yes – the penalties should be as follows:

• If the registered entity submitted the return within 60 days from the deadline date, the penalty amount should be within the range of EGP 3,000 and EGP 50,000; and 
• If the registered entity submitted the return after 60 days from the original deadline date the penalty should be within the range of EGP 50,000 and EGP 2,000,000
• 1.5% additional tax of the tax due amount for each month or part of the month for late payments. 
  In case of both late payment and late submission both, it should be considered as a tax evasion (Penalties of tax evasion should be 100% or 150% or 175% of the due amounts).

As the monthly VAT returns are submitted through the ETA’s electronic portal, an excel sheet for the sales and purchases should be uploaded in order to submit the returns, or alternatively the sales and purchases invoices. 

Yes.

No.

The Taxpayer should record their sales of goods and services using the e-invoice and such invoice should include serial number, date, the taxpayer’s registration number, address, description of the goods or services, VAT rate, VAT amount, goods or services codes, etc.

To-date, the electronic VAT audit is available for registered businesses on the ETA’s new portal. Requirements for electronic audit differ based on the business activity.

The digital filing requirements are also available by uploading the sales and purchases excel sheets for the purpose of submitting the VAT return electronically. To- date, there is no real time VAT integration between the e-invoicing and e-filing (i.e. no automatic generation of the VAT return from the e-invoicing system).