Egypt – VAT Executive Regulations introduced - KPMG Global
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Egypt – VAT executive regulations introduced

Egypt – VAT executive regulations introduced

KPMG in Egypt provides an overview of recently released executive regulations for the country’s new value-added tax (VAT) law, which replaces the current sales tax law.


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Details of the new VAT now available

On 7 March 2017, Egypt’s Ministry of Finance released the executive regulations for interpreting the new VAT law. The law imposes VAT on all commodities and services, including local or imported commodities and services listed in a table attached to the tax law.

Non-taxable services

According to the executive regulations, services that are not subject to VAT include:

  • public services rendered by government entities
  • lending operations carried out between holding/parent companies and their subsidiaries, or between each other
  • trading in shares and other securities.

Exported services

The executive regulations specify that the documents required to verify exported services include a signed service contract, tax invoice and bank transfer from abroad to Egypt.

Group cost allocations

The executive regulations specify that a cost allocation to subsidiaries for a taxable service rendered by their holding/parent companies or received by their holding/parent companies from others in exchange for payment is considered as private use and subject to VAT.

Other VAT rules

The executive regulations also cover:

  • the details of the books that a registered person should keep 
  • the conditions for nominating an agent/representative in Egypt for a non-resident or a non-registrant
  • VAT on services of a continuous nature (e.g. contracting services for construction and buildings), which arises on issuance of the related invoice.
  • the tax forms that must be filed and their related deadlines
  • the details of certain activities that are subject to Egypt’s schedule tax and other activities that are VAT-exempt.

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