Value Added Tax (VAT) in Egypt: A Complete Compliance, Filing & 2025 Update Guide

Value Added Tax in Egypt

Value Added Tax (VAT) in Egypt is managed by the Egyptian Tax Authority under Law No. 67 of 2016 with amendments effective from July 2025. It is an indirect tax on the supply and import of goods and services at each stage of the supply chain and allows businesses to claim credit for input tax paid on purchases. The standard rate of VAT in Egypt is 14 percent, and registration will be required when annual taxable supplies exceed EGP 500,000 within a 12-month period. This blog explains the VAT scope, registration, invoicing, filing, input recovery, and key legal updates for compliance.

Background and Scope of VAT in Egypt

The Value Added Tax system in Egypt replaced the General Sales Tax and applies to all goods and services supplied or imported within the country. The Egyptian Tax Authority enforces the law through its online portal and periodic circulars that guide taxpayers. The general VAT rate is 14 percent while some essential goods and public services are zero-rated or exempt to reduce costs for consumers and maintain price stability.

VAT in Egypt functions on a credit mechanism where a business will charge tax on sales and recover input tax paid on purchases used for taxable activities. Exporters enjoy zero-rated treatment that allows refund claims on the input VAT paid. Exemptions apply to banking, educational, and healthcare services as defined in the executive regulations.

VAT Registration Requirements in Egypt

In Egypt, a business or individual must register for Value Added Tax when annual taxable supplies exceed EGP 500,000. Nonresident suppliers providing digital or professional services to Egyptian customers are also required to register under the simplified vendor system. Registration ensures compliance with the Egyptian Tax Authority and allows a business to issue valid tax invoices and recover input VAT on purchases used for taxable activities.

The VAT registration process through the ETA includes the following steps:

• Create an account on the ETA portal to access a range of registration services.

• Fill out a VAT registration form with complete business information.

• Upload identification documents, business licenses, and other supporting files required for verification.

• Receive a tax registration number that allows a business to carry out VAT activities.

• Begin filing VAT returns and issuing invoices that follow the law on all taxable transactions.

VAT Rates and Schedule Taxes in Egypt

In Egypt, the VAT system applies a rate based on the type of goods or services supplied or imported. The rates aim to balance revenue and economic activity and ensure essential goods and exports are treated fairly. A business will need to know the rates to calculate VAT on sales and maintain compliance with the Egyptian Tax Authority.

The current VAT rates in Egypt are as follows:

14 percent – Standard rate

Applied to all other taxable goods, services, and imports that do not fall under a special category.

5 percent – Reduced rate

Applied to specific categories such as capital equipment used by taxable businesses, basic foodstuffs, agricultural supplies, construction of new properties, selected consulting services, and certain oil products.

0 percent – Zero rate

Applied to exports of goods and related services, allowing businesses to claim a full refund of input VAT.

0 percent – Exempt supplies

Some goods and services are VAT-exempt, including financial services, medical supplies, healthcare, public broadcasting, education, domestic energy, basic food items, and the sale or leasing of real estate.

Some professional and consultancy services in Egypt may include schedule taxes at specific rates according to ETA regulations. Certain telecommunications items may carry both the standard VAT and a schedule tax component. The schedule tax is not recoverable as input VAT, so businesses will need to consult ETA-published lists to confirm the correct treatment for each service and ensure compliance with applicable tax rules.

Taxable Supplies and Place of Supply Rules in Egypt

In Egypt, taxable supplies include the sale of goods and the provision of services within the country. Import VAT will be applied when goods enter Egypt and must be paid at customs before the goods are released. Zero-rated treatment applies to exports of goods and qualifying services used outside Egypt when proper documentation is provided. This allows businesses to recover input VAT on related purchases and ensures that exports remain competitive in international markets.

For example, an Egyptian software company providing support to a client in the UAE will apply the zero rate if proof of export exists. A nonresident consultant providing services to an Egyptian company is subject to VAT under the reverse charge mechanism. The local client must report VAT on behalf of the nonresident supplier and keep all supporting documents to claim input VAT if allowed by law.

VAT Invoicing and E-Invoicing Requirements in Egypt

In Egypt, a business registered for Value Added Tax issues a valid tax invoice for every taxable sale or service. The Egyptian Tax Authority operates a national e-invoicing system that improves reporting accuracy and enforces compliance. This system was introduced in stages, starting with B2B e-invoicing for large taxpayers and gradually covering all registered entities through 2022 and 2023. B2C e-receipts followed in 2024 and 2025 to include every consumer transaction. Proper invoicing allows clear VAT reporting and enables a business to recover input tax on its purchases.

Each VAT invoice must include the following:

• Supplier and customer names to identify the parties involved in the transaction.

• VAT registration numbers for both the supplier and the customer.

• Invoice number and date to track and verify transactions.

• Description of the goods or services supplied.

• Taxable amount and the VAT value charged on the transaction.

• ETA validation code for e-invoices to confirm submission and approval.

E-invoicing requirements in Egypt:

• Integration of accounting systems with the ETA electronic portal for automated reporting.

• Real-time submission and approval of e-invoices to maintain compliance.

• E-receipts for B2C transactions to capture all consumer sales.

• Archived digital storage for five years to support audits and future verification.

VAT Return Filing and Payment Deadlines in Egypt

In Egypt, a VAT return must be filed each month on the Egyptian Tax Authority online portal. The filing period ends one month after the close of a tax period. Payment of any VAT due will be made electronically at the time of filing. Timely submission and payment ensure full compliance with tax law and help a business avoid extra charges or disruption in its operations. Keeping accurate accounting records and tracking each taxable transaction will support correct reporting.

Any delay in filing or payment in Egypt will lead to financial penalties. The ETA applies an additional tax of 1.5 percent per month or part of a month on unpaid VAT. Missing the filing deadline will result in a fixed administrative fine. A business will need to track the dates of all filings and use internal checks to ensure every return and payment is completed on time to avoid penalties and interest.

VAT Input Tax Recovery Rules in Egypt

In Egypt, a business can recover VAT paid on purchases that are used to make taxable supplies. Input tax on exempt activities or non-business expenses will not be recoverable. A valid tax invoice and supporting documents are required to confirm the claim and meet the Egyptian Tax Authority requirements. Recovery of input VAT helps a business reduce the total cost of goods and services and maintain accurate records for financial reporting.

Exporters in Egypt receive refunds or can carry forward VAT credits when their output is zero-rated. A business that provides both taxable and exempt supplies must calculate input VAT based on the actual use of each type of supply. The ETA reviews refund claims regularly so maintaining detailed records and verified documentation will help complete the process faster and avoid any delay in credit recovery.

July 2025 VAT Updates in Egypt

In July 2025 Egypt updated a VAT law through Law No. 157 of 2025 issued on 17 July and effective from 18 July. The update will expand the scope of VAT and reclassify a range of activities on the supply of goods and services. A business or a service provider will need to apply the correct VAT on all transactions under the new law.

Key changes under the July 2025 VAT amendments:

• Some construction and consulting services will now fall under the standard 14 percent VAT rate.

• Broader rules on cross-border supplies will capture online and remote activities effectively.

• Updated e-invoicing and filing procedures will apply to large taxpayers to simplify reporting with the Egyptian Tax Authority.

Conclusion

VAT in Egypt operates under Law No. 67 of 2016 with amendments effective from July 2025. The standard rate will remain 14 percent and registration will be required when annual taxable supplies exceed EGP 500,000. A business will need to comply with monthly filing, issue e-invoices, and maintain records to recover input VAT on purchases used for taxable activities. Late filing or underpayment will trigger a 1.5 percent monthly charge on the unpaid VAT plus fixed fines. Companies will need to verify the classification of supplies, apply the correct rates on all transactions, and use the ETA electronic platform to maintain compliance and reduce the risk of audits or penalties.

FAQs

1. Who must register for VAT in Egypt?
    A business or an individual with annual taxable supplies above EGP 500,000 will need to register with the Egyptian Tax Authority.
2. What is the standard VAT rate in Egypt?
    The standard rate is 14 percent and certain goods and services will have reduced or zero rates.
3. Are exports subject to VAT in Egypt?
    Exports of goods and qualifying services will be zero-rated allowing full recovery of input VAT paid on related costs.
4. Is e-invoicing mandatory in Egypt?
    Yes, electronic invoicing and e-receipts will apply to all VAT-registered businesses under ETA’s phased rollout.
5. What is the penalty for late VAT payment in Egypt?
    Late payment will incur a 1.5 percent charge per month or part of a month until the tax is settled plus administrative fines.