Egypt Vat

Egypt VAT (ضريبة القيمة المضافة) Skill v2.0

General reference only. This skill is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for any specific person's facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.

Section 1 — Quick reference

Key return sections

Conservative defaults

Red flag thresholds

Section 2 — Required inputs and refusal catalogue

Required inputs

Before starting any Egypt VAT work, obtain:

1. ETA Tax Registration Number (TRN — رقم التسجيل الضريبي — 9 digits)
2. ETA e-Invoice portal credentials and API key for accessing issued/received e-invoices
3. Monthly bank statements in EGP (all business accounts)
4. ETA e-Invoice XML downloads for all sales and purchases
5. Import customs declarations (بيان جمركي) from Egyptian Customs Authority
6. Prior month VAT return (for carried-forward excess input credit)
7. Details of export transactions with shipping documentation

Refusal catalogue

Refuse and escalate to a licensed Egyptian tax consultant for:

• Partial exemption calculations (businesses with mixed taxable/exempt supplies)
• VAT on real estate and construction (complex rules)
• Special tax regimes (simplified VAT for certain agricultural cooperatives)
• Reverse-charge on imported services — complex cases involving multiple service types
• VAT refund claims for exporters (long process requiring ETA audit)
• Turnover tax (ضريبة المبيعات) on certain categories — replaced by VAT but some transitional issues remain
• VAT on free zones and special economic zones

Section 3 — Supplier pattern library

3.1 Banking and financial services

3.2 Electricity and utilities

3.3 Telecommunications

3.4 Transport and travel

3.5 Logistics and courier

3.6 Retail and office supplies

3.7 Software and digital services

3.8 Professional services

3.9 Insurance

3.10 Healthcare

Section 4 — Worked examples

Example 1 — Standard VAT on service sale

Scenario: Cairo-based IT consulting firm issues e-Invoice to Egyptian corporate client.

Bank statement line (CIB format):

Date        : 15/04/2025
Transaction : Credit Transfer
Description : TECH SOLUTIONS CO — INV-2025-041 — IT CONSULTING SERVICES
Amount      : +EGP 570,000.00
Balance     : EGP 2,570,000.00

Working:

• ETA e-Invoice: net EGP 500,000 + VAT 14% EGP 70,000 = EGP 570,000
• Return entry: Section A — EGP 500,000 | Output VAT: EGP 70,000

Example 2 — Export of services (zero-rated)

Scenario: Egyptian software firm exports SaaS to UK client. Payment in GBP.

Bank statement line (NBE format):

Date        : 20/04/2025
Transaction : Foreign Currency Credit
Description : BRITISH TECH LTD UK — SaaS SUBSCRIPTION APR 2025
Amount      : +EGP 1,250,000.00 (GBP 28,000)

Working:

• Export of services consumed outside Egypt by foreign entity — 0% VAT
• Requires: contract, bank transfer evidence, service agreement showing UK consumption
• Return entry: Section C — EGP 1,250,000 | VAT: EGP 0

Example 3 — Reverse-charge on foreign digital service

Scenario: Company pays for Microsoft Azure (billed from Microsoft Ireland).

Bank statement line (Banque Misr format):

Date        : 05/04/2025
Transaction : Foreign Payment / SWIFT
Description : MICROSOFT IRELAND — AZURE CLOUD SERVICES APR 2025
Amount      : -EGP 112,000.00

Working:

• Foreign digital service to Egyptian business — taxable in Egypt
• Self-assess: EGP 112,000 × 14/114 = EGP 13,754 VAT (or EGP 98,246 net + EGP 13,754 VAT)
• Declare as output VAT AND claim as input — net zero for fully taxable business
• Include in VAT return both output (Section E) and input (Section I)

Example 4 — Fawry payment collection (14% service fee)

Scenario: Company uses Fawry to collect customer payments; Fawry charges a collection fee.

Bank statement line (QNB Alahli format):

Date        : 30/04/2025
Transaction : Debit — Service Fee
Description : FAWRY FOR BANKING TECHNOLOGY — APR 2025 COLLECTION FEE
Amount      : -EGP 57,000.00

Working:

• Fawry e-Invoice: net EGP 50,000 + VAT 14% EGP 7,000 = EGP 57,000
• Input credit: EGP 7,000 — deductible (business service)
• Return entry: Section F — EGP 50,000; Input VAT: EGP 7,000

Example 5 — Import of goods (customs VAT)

Scenario: Importing machinery from Germany. EGP equivalent at import.

Bank statement line (CIB format):

Date        : 08/04/2025
Transaction : Customs Payment
Description : CUSTOMS DUTY + VAT — BAYAN 2025-EG-04-7890 — INDUSTRIAL MACHINERY
Amount      : -EGP 700,000.00

Working:

• Customs declaration: CIF value EGP 4,000,000 + customs duty EGP 1,000,000 = EGP 5,000,000 × 14% = EGP 700,000 VAT
• Pay at customs; claim as input VAT in monthly return (Section H)
• Input credit: EGP 700,000 — full credit if machinery for taxable production

Example 6 — Monthly return summary

Scenario: Trading company — April 2025.

Section 5 — Tier 1 rules (compressed)

Rate assignment:

• 14% standard: most goods and services
• 5%: selected equipment and machinery (check ETA reduced-rate schedule)
• 0%: exports of goods with customs declaration, services exported to non-residents consumed outside Egypt, international transport
• Exempt: financial services, insurance, medical services by licensed practitioners, educational services, residential rent, public transport (ENR, metro)

Input credit:

• Credit allowed on all taxable purchases for taxable business activities
• No credit on exempt purchases (financial services, insurance)
• Reverse-charge on imported services: output and input net to zero for fully taxable businesses
• Import VAT paid at customs: claim as input in same month's return with customs declaration
• e-Invoice requirement: from October 2020 ETA made e-invoice mandatory — invoices without valid ETA UUID have contested input credit eligibility

Filing mechanics:

• File monthly via ETA online portal by last day of following month
• All B2B sales require ETA e-Invoice (UUID-stamped) transmitted to ETA in real time
• Excess input VAT carries forward; refunds available for exporters after ETA audit

Section 6 — Tier 2 catalogue (genuinely data-unknowable items)

Section 7 — Excel working paper

Columns: Date | Supplier/Customer | TRN | ETA Invoice UUID | Net (EGP) | VAT Rate % | VAT (EGP) | In/Out | Zero-rated? | Exempt? | Tier 2 flag | Notes

Tab structure:

1. Output_Sales — all sales by rate
2. Input_Purchases — all purchases with VAT credit
3. Import_Customs — import VAT paid at customs
4. ReverseCharge_Foreign — foreign services
5. VATSummary — monthly return totals
6. Tier2_Items — awaiting client response

Key formula:

Net_VAT = Total_Output_VAT - Total_Input_VAT - Prior_Excess_Credit

Section 8 — Bank statement reading guide

CIB format

Date        : 15/04/2025
Transaction : Credit Transfer
Description : COMPANY NAME — INV-2025-041 — SERVICE DESCRIPTION
Amount      : +EGP 570,000.00
Balance     : EGP 2,570,000.00

NBE (National Bank of Egypt) format

15/04/2025  |  Incoming Transfer  |  COMPANY NAME  |  REF: INV-041  |  +570,000.00 EGP

Key patterns:

• EGP number format: Comma = thousands; period = decimal (EGP 570,000.00)
• Foreign Currency Credit: Foreign payment — check for export zero-rate or reverse-charge
• Customs Payment: Import duty + VAT — claim VAT as input with customs declaration
• SWIFT/Foreign Payment: May trigger reverse-charge on imported services

Section 9 — Onboarding fallback

When client cannot provide ETA e-Invoices for all transactions:

1. Use bank statement amounts as VAT-inclusive totals and back-calculate:
   • Net = Total ÷ 1.14 | VAT = Total − Net
2. Apply conservative defaults: 14% output; 0% input credit without ETA e-Invoice UUID
3. Flag all items without e-Invoice UUID in Tier2_Items tab
4. Issue data request listing missing invoice references
5. Warn client: ETA can disallow input credit for invoices without valid UUID — systemic risk if supplier not e-Invoice registered

Section 10 — Reference material

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

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