August 2023 – new guidelines of VAT obligations for non-resident providers of digital services
The Egyptian Tax Authority has published English language guidelines on the VAT obligations for foreign providers of digital or electronic services. This includes Electronic Distribution Platforms facilitating marketplaces and digital platforms which render the service on behalf of foreign providers.
The guidelines cover:
- Scope of services subject to VAT
- Use of reverse charge for B2B transactions
- Requirements to determine Egypt as the place of supply
- VAT rates applicable
- VAT registration procedures
- Bookkeeping requirements
- Invoicing obligations
- Simplified returns process
- VAT refunds for any input VAT suffered
June 2023 launch of simplified vendor VAT registration portal for non-residents
Egypt’s Tax Authority is to launch a new simplified registration process and reporting portal for foreign providers of remote digital or electronic services. This will be available from 22 June 2023.
14% VAT on electronic services to consumers
Egypt made providers liable to 14% Value Added Tax collections obligations in September 2016. This was further extended by the Finance Ministry in 2022 to non-resident providers. B2B transactions are excluded. Non-resident providers of digital services may determine if their customer is consuming their services locally by two of the following three facts:
- Billing or postal address
- Bank, credit card, Bank Identification Number or similar address
- IP access address, including SIM card, mobile country code
Digital remote services
The following ‘remote’ services are considered in-scope
- Streaming or downloaded films, TV, music
- Online news
- Website design or publishing services
- Professional legal, accounting and marketing services (10% VAT rate)
Marketplaces and similar intermediaries also share VAT obligations. This includes raising VAT invoices. The liability was extended to digital content creators in 2021.
Simplified VAT returns for digital services
This includes a VAT registration threshold of EGP 500,000 (approx. €27,400 or $31,800). However, there is no threshold in the case of professional and consultancy services.
A simplified VAT registration, without the right to deduct input VAT suffered in available. The tax office should no longer require non-resident to appoint a fiscal representative since 2020.
VAT returns under the simplified returns regime are monthly. The return is due by the end of the following month. VAT may be remitted in Egyptian pounds or US dollars. From 2024, other major currencies may be remitted. There is no facility to apply for input VAT deductions via the return. Instead, non-residents make a separate reclaim application.
Check VAT Calc’s global VAT and GST on digital services tracker to see which other states have implemented indirect taxes on electronic services to consumers.
Africa & Middle East VAT on digital services
|Comments (click for details)||Rate||Date||Threshold||Comments|
|Cameroon||19.5%||Jan 2020||XAF 50 million|
|Egypt||14%||Sep 2016||EGP 500,000|
|Ghana||12.5%||Apr 2022||GHS 200,000|
|Kenya||16%||Sep 2013||-||Registration threshold removed 2023|
|Oman||5%||Apr 2021||OMR 35,000|
|Saudi Arabia||15%||Jan 2018||Nil|
|Senegal||18%||Jan 2023||Nil||Fiscal representative required|
|Sierra Leone||15%||SLE 100,000|
|South Africa||15%||Jun 2014||ZAR 1 million|
|Tanzania||18%||Jul 2022||Nil||Residents since Jul 2015|
|Tunisia||19%||Jan 2020||Nil||Withholding VAT; 3% Royalty Tax|
|Uganda||18%||Jan 2020||UGX 150m|
|United Arab Emirates||5%||Jan 2018||AED 375,000|