Tax rate by region Egypt

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Understanding SaaS Sales Tax in Egypt: A Comprehensive Guide for Businesses

In Egypt, the standard VAT rate for SaaS and other digital services is 14%. The VAT obligations for non-resident vendors differ depending on whether the remote services are rendered to a registered taxpayer (B2B supplies) or a non-registered consumer (B2C supplies).

 

In the case of B2B supplies, the resident taxpayer is required to account for and remit VAT using the reverse charge scheme, with no obligation for the non-resident to charge or remit VAT.

 

In the case of B2C supplies, the non-resident vendor should collect and file the appropriate VAT to the Egyptian authorities.

 

Companies must keep precise and comprehensive records of all transactions that are subject to VAT. These records should be retained for a minimum period of five years and must be readily accessible for review by the Egyptian Tax Authority (ETA) when required.

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Egypt

Egypt implemented a VAT system in 2016, aiming to modernize its tax framework and enhance revenue generation.

Official government link: Egyptian Tax Authority

14.00%

E-products and services VAT/Sales tax rate

Reduced tax rate product categories

No digital goods or services with reduced tax in Egypt

Exempted product categories

Some educational material may be exempt in Egypt

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

Once the threshold has been exceeded

Online registration possible

Yes

Local representative needed

Not mandatory

Registration procedure

Non-resident digital providers that have exceeded registration threshold in Egypt, must register under a simplified vendor registration regime within 30 days of the month following the month in which the VAT obligations in Egypt have occured. The main action is account creation on the website of Egyptian Tax Authority.

There the following information has to be provided:

Country of tax residence;
National TIN;
Business address;
Name of the person who is responsible to contact with Egyptian Tax Office;
Telephone number and email of contact person;
Website`s URL.
Non-resident digital service providers are not obligated to have a fiscal representative in Egypt.

List of digital and electronic services liable for tax

Digital materials (such as video, music, apps, games, and e-books downloads)
Services related to software (like anti-virus programs and similar)
Services for website creation or publishing
Content licensing
Content based on subscriptions (including online gaming, music, video streaming, and online newspapers)

Penalties

The consequences for not adhering to VAT rules in Egypt can be quite serious and encompass:

– Delayed registration: This can result in a fine that could reach up to EGP 10,000.
– Late submission of returns: This attracts a penalty of 1% of the due tax per month, capped at a maximum of 5%.
– Inadequate record-keeping: This could lead to a fine that varies between EGP 5,000 and EGP 50,000.
– Providing incorrect or deceptive information: The penalties for this can range from 100% to 200% of the unpaid tax.

Registration threshold

EGP 500.000 USD 10.500

Filing interval

Monthly

Filing deadline

End of the month following the tax period in which the transactions occurred

E-invoicing requirements

Yes

Record keeping

Companies must keep precise and comprehensive records of all transactions that are subject to VAT. These records should be retained for a minimum period of five years and must be readily accessible for review by the ETA when required.

How-To Guides: Egypt SaaS VAT

Step: 1 Threshold

On January 12, 2022, Egypt published executive regulations and on March 22, 2023, guidelines clarifying the VAT obligations for non-residents.

 

Effective June 22, 2023, Egypt requires non-residents (including online platforms) providing remote services, including digital services, to consumers (B2C) in Egypt to register for and collect VAT if their sales exceed EGP 500,000 in a 12-month period. However, the registration threshold is not applicable for services subject to a reduced VAT rate (e.g., professional and consultancy services).

Step: 2 Business Registration

Non-resident SaaS providers should use the Simplified Vendor Registration System (SVRS). This is an online process that does not require a physical presence or a local fiscal representative.

Step: 3 TIN/VAT Number

A VAT Registration Number is issued by the Egyptian Tax Authority (ETA) upon successful electronic application.

Step: 1 Standard VAT Rate

The standard VAT rate is 14% for most SaaS and digital services. Professional and consultancy services may be subject to a reduced rate of 10%.

Step: 2 VAT Formula

To calculate your tax amount, use the following formula: 

 

Tax Amount = Net Price x Tax Rate%

Step: 3 Reverse Charge (B2B)

The Reverse Charge Mechanism applies for B2B cross-border sales. If the Egyptian recipient is a VAT-registered business, the non-resident supplier is not required to charge VAT; the buyer self-assesses and remits the tax to the ETA.

Step: 1 Selling B2C

Non-resident suppliers must charge 14% VAT at the point of sale. Residency is determined using two non-conflicting pieces of evidence (e.g., billing address, IP address, or bank details).

Step: 2 Selling B2B

Tax is not charged by the vendor. To qualify for this exemption, the vendor must validate the buyer’s Tax Registration Number (TRN) and Unique Identification Number (UIN) via the ETA portal or API.

Step: 3 Invoice Requirements

Invoices must be issued electronically and include:

  • Supplier Name and VAT ID
  • Sequential Invoice Number
  • Date of Issue
  • Description of Services
  • Total Amount (Net)
  • VAT Rate and Amount,
  • Buyer Details (Name/Address/Tax ID).

Step: 1 Filing Interval

In Egypt, taxes must be filed monthly.

Step: 2 Filing Deadline

Returns must be submitted within 30 days following the end of the tax period (e.g., January return is due by the end of February).

Step: 3 Submission

Returns are filed via the ETA Electronic Portal. Payments are currently accepted in EGP and USD.

Step: 4 Record Keeping

Records, including invoices and evidence of customer location, must be kept for a minimum of 5 years.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Egypt’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

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