Egypt VAT registration and filing

In Egypt, Value Added Tax (VAT) is levied at a standard rate of 14% on most goods and services. Businesses operating within Egypt are required to register for VAT if their annual taxable turnover exceeds EGP 500,000. Notably, there is no provision for voluntary VAT registration below this threshold.

VAT Registration Process:

  1. Application Submission: Businesses must complete a specific VAT registration form and provide hard copies of the following documents:
  2. Non-Resident Businesses: Foreign entities supplying taxable goods or services in Egypt are also required to register for VAT. Such non-resident businesses must appoint a local Fiscal Representative who will be responsible for the registration, filing, and payment of VAT on their behalf. In the absence of such registration, the resident Egyptian customer is responsible for withholding any VAT due.

VAT Filing and Payment:

  • Frequency: VAT returns must be submitted monthly.
  • Deadline: Returns are due within one month following the end of the reporting period. For example, the VAT return for January is due by the end of February.
  • Payment: The VAT due should be paid at the time of filing the return. Electronic filing of tax returns is mandatory, and businesses are required to pay the VAT amount due through regular bank transfers, subsequently entering the payment details on the Egyptian Tax Authority’s (ETA) website to finalize the e-filing process.

Penalties for 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 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.

Special Considerations for Digital Services:

Non-resident vendors and Electronic Distribution Platforms (EDPs) providing digital or remote services to consumers in Egypt are subject to specific VAT guidelines:

  • B2C Transactions: Non-resident service providers offering services directly via their own portal or application must register and remit VAT under a simplified registration regime. If services are provided through a non-resident EDP, the EDP is responsible for VAT registration and remittance.
  • B2B Transactions: For services rendered to registered Egyptian taxpayers, the local business customer is required to account for and remit VAT using the reverse charge mechanism. In this scenario, the non-resident provider has no obligation to charge or remit VAT.
  • Registration Threshold: The revenue threshold for simplified registration for remote services is EGP 500,000 over any 12-month period. However, professional and consultancy services are required to register regardless of turnover.

For detailed information and assistance, businesses are encouraged to consult the FZCO Accountants Limited or seek professional tax advisory services.