Egypt VAT System – Complete Guide

📘 What is VAT in Egypt?

Egypt introduced its Value-Added Tax (VAT) system in 2016, replacing the older General Sales Tax (GST). The VAT is governed by Law No. 67 of 2016 and is overseen by the Egyptian Tax Authority (ETA) under the Ministry of Finance.

VAT in Egypt applies to most goods and services sold or consumed in the country, as well as imported items. It is designed as a multi-stage consumption tax, levied at each point of sale with credit for input tax.

📊 VAT Rates in Egypt

As of 2025, Egypt applies the following VAT rates:

🔹 Standard Rate: 14%

Applies to most goods and services including imports.

🟡 Reduced Rate: 5%

• Machinery used for industrial production
• Selected capital goods

🟢 Zero-Rated Supplies:

• Exported goods and services
• International transport services
• Supplies to diplomatic missions and international organizations (under conditions)

🚫 VAT-Exempt Supplies:

• Banking and insurance services
• Education and health services
• Basic food products
• Real estate sales and leasing (residential)

🏢 VAT Registration in Egypt

✅ Who Must Register?

• Businesses with annual taxable turnover exceeding EGP 500,000
• Importers and exporters regardless of turnover
• Foreign service providers supplying to Egyptian customers

📝 Registration Process:

1. Apply to the Egyptian Tax Authority (ETA)
2. Submit business license, tax card, and incorporation documents
3. Obtain VAT registration certificate and tax ID

💡 Foreign companies may need a tax representative in Egypt to handle filings.

🧾 VAT Invoice Requirements

All VAT-registered businesses in Egypt must issue a tax invoice with the following mandatory details:

• Seller and buyer name, address, and tax ID
• Invoice number and date
• Description of goods or services
• Quantity, unit price, and taxable value
• VAT rate and amount
• Total invoice value

Since 2020, large taxpayers are required to use Egypt’s e-invoicing system, gradually expanding to include more companies.

📅 VAT Filing & Payment in Egypt

⏳ Filing Frequency:

• VAT returns are filed monthly
• Returns are due by the end of the following month

📤 Filing Process:

• File online via the ETA’s electronic portal
• Submit sales and purchase details
• Calculate net VAT payable
• Pay VAT electronically

Failure to file or late payment may result in penalties and interest charges.

🌍 VAT on Imports & Digital Services

• Imports: VAT is charged at customs at the time of import clearance
• Foreign digital service providers (e.g., online platforms, SaaS, streaming) serving customers in Egypt may be required to register and collect VAT, depending on evolving legislation

🛑 Egypt is planning to expand VAT coverage to foreign e-commerce and digital providers in line with global trends.

🧮 VAT Calculation Example

Scenario: A business in Egypt sells furniture worth EGP 100,000.

• Output VAT (14%) = EGP 14,000
• Total invoice value = EGP 114,000
• If input VAT = EGP 4,000
• Net VAT payable = EGP 10,000

🚫 Common VAT Exemptions

Egypt exempts several sectors and transactions from VAT:

• Education and health services
• Banking, insurance, and financial services
• Residential property sales or leases
• Basic food staples
• Cultural services and religious activities

⚠️ Input VAT related to exempt supplies cannot be claimed as a deduction.

✅ Compliance Tips for Businesses

• ✔️ Keep detailed and organized tax invoices
• ✔️ Submit monthly VAT returns on time
• ✔️ Use Egypt’s e-invoicing system if applicable
• ✔️ Maintain records for a minimum of 5 years
• ✔️ Monitor threshold changes and digital economy regulations

📌 Conclusion

Egypt’s VAT system continues to modernize with e-invoicing and digital compliance, creating a more transparent tax environment. With a standard rate of 14%, businesses must stay up to date with invoicing, filing, and reporting obligations to avoid penalties and ensure smooth operations.

👉 Use our Egypt VAT Calculator at gstcal.org to calculate taxes accurately and stay compliant.