International VAT Guides – Egypt

VAT rates in Egypt 

How much is VAT in Egypt? 

The Egypt VAT system is developed in alignment with international best practices. The Ministry of Finance, in collaboration with the Egyptian Tax Authority, has implemented a special VAT regime for non-resident providers of digital and remote services. 

The Ministerial Decree, which amended the VAT Law and introduced a special VAT framework for non-resident providers of digital services, came into effect in 2023. Non-resident providers of digital services are obligated to register for VAT when they surpass the annual threshold. 

VAT amendments regulate VAT on remote services(e.g., electronic and digital services) performed/used, or imported to Egypt. 

VAT threshold in Egypt

The VAT Egypt Act and Ministerial Decree no. 160 are the two main pillars defining the specific requirements and rules for non-resident digital service providers. The rules for VAT threshold in Egypt for non-resident digital services providers are the same as for the domestic providers of remote services. 

VAT registration threshold for resident businesses: EGP 500,000

VAT registration threshold for non-resident businesses: EGP 500,000

VAT registration threshold for foreign providers of digital services: EGP 500, 000

VAT registration threshold for non-resident providers of remote services, such as consultancy or other professional services, is zero. They are obliged to register from the very first transaction with local customers. 

VAT Taxable Activities in Egypt

Types of taxable activities that mandate VAT registration:

• Supply of goods and services for consideration;
• Supply of remote services 
• Supply of consultancy and professional services by non-resident providers
• Exports;
• Imports of goods and services; 
• Supply of warehousing services

Tax Representative in Egypt 

In most cases, non-resident service providers don’t need the services of a local tax agent for VAT compliance duties under the Simplified Vendor Registration Regime.

Tax registration

Non-resident providers of digital services or digital platform operators that facilitate the supply of digital services by third parties are mandated to register for VAT under the simplified vendor registration regime when they surpass the monetary threshold or when they want to do it on a voluntary basis. 

VAT on Electronically Supplied Services in Egypt 

Digital Services

Non-resident providers of digital services are mandated to register for VAT when they surpass the monetary threshold. The threshold is EGP 500,000 and is based on turnover over any 12 consecutive months. 

Online vendors or digital platform operators should register only through the simplified vendor registration regime if they provide remote services to local customers. 

Simplified vendor registration regime, covers only B2C transactions. Non-resident remote service providers are mandated to charge, collect, and remit only VAT for B2C transactions. 

When it comes to B2B supplies of electronic services, the domestic taxable persons should collect and report tax under the reverse charge mechanism. 

How much is VAT in Egypt for Electronically Supplied Services?

VAT rate Egypt for remote services is 14%. There are cases when a reduced rate at 10% shally apply instead.

Taxable Digital Services in Egypt

The following types of digital services could be taxable under the remote services VAT amendment rules:

• Audio and video streaming services 
• SaaS services
• E-books and publications 
• Intermediation between third parties offering goods or services and those seeking them.

Marketplace and Digital Platform Operators’ Rules

The non-resident operator of a digital platform that facilitates the supply of remote services is accountable for VAT collection on behalf of third-party users registered on its platform. 

Invoicing Rules

Non-resident providers of remote services or digital platform operators are obliged to issue an invoice or sales receipt for each B2C transaction made. The sales receipt must contain at least the elements prescribed in the VAT amendment. There is no obligation to issue e-invoices or to comply with the digital reporting requirements for these types of transactions. 

The invoice must contain at least the following information: 

The pdf invoice should at least contain the following:

General information 

• Date of invoice issuance 
• Date and time of supply
• Unique invoice number from a consecutive series

Seller information

• Company name
• Full address(head office)
• Billing address if different from company address
•  VAT number

Fiscal Information

• Tax amount for each type of goods or services supplied
• The Tax Rate
• Total tax  amount 
• Invoice Total tax exclusive
• Rate of any discount
• Total invoice amount

Foreign Currency Invoice in Egypt  

In most cases, issuing an invoice in a foreign currency is permitted. Simplified VAT returns and tax remittances can also be made in a foreign currency. 

VAT Returns in Egypt

Simplified Return

Non-resident providers of remote services should register under the simplified vendor registration regime. They should also submit a simplified VAT return, following the VAT return template prepared exclusively for this category of vendors. 

A simplified VAT return doesn’t allow foreign providers of digital services to claim input tax credits. They, however, have a possibility to reclaim their tax credits under the refund procedure. 

Simplified VAT Return

Penalties for late reporting and omitted declarations 

Penalties for VAT Non-Compliance:

• Late Payment: A penalty of 1.5% per month is levied on the outstanding VAT amount.
• Late Filing: Penalties range from EGP 3,000 to EGP 50,000 for the late submission of VAT returns. If a return is not submitted within 60 days of the due date, the penalty increases, ranging from EGP 50,000 to EGP 2,000,000.

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