- New VAT Regulations: On June 22, 2023, Egypt implemented new VAT regulations that affect foreign businesses providing digital and remote services to Egyptian customers, aiming to enhance compliance and streamline taxation for non-resident vendors.
- Ministerial Decree No. 160 of 2023: This decree requires foreign vendors offering remote services to Egyptian residents to comply with VAT obligations, including real-time validation through the Egyptian Tax Authority (ETA) portal.
- VAT Guidelines for Transactions: For B2B transactions, the Egyptian buyer is responsible for VAT under the Reverse Charge Scheme, while in B2C transactions, VAT obligations differ: vendors using their own platforms must register and remit VAT, whereas those using electronic distribution platforms (EDPs) have this responsibility shifted to the EDP.
- Simplified Registration for Vendors: Vendors operating their own platforms or using non-resident EDPs can use a simplified vendor registration regime, allowing for online VAT registration with minimal information required by the ETA.
- Compliance Importance: Adhering to the new VAT regulations is crucial for foreign vendors to avoid fines or legal issues, as emphasized by the ETA. This initiative marks a significant move for Egypt in regulating foreign digital business activities and aligning with international tax standards.
Source Comarch
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