Egypt to exempt tax to support industry, stimulate economic growth in “value-added” amendments

CAIRO - 13 December 2021: The amendments to some provisions of the value-added tax law come within the framework of the state’s commitment to upgrading the tax system, advancing economic development, stimulating investment, enhancing tax commitment, and raising the efficiency of tax collection, without imposing additional burdens on citizens, according to the Egyptian government.

It added in a statement that the amendments aim to address some of the problems that have emerged during the practical application of the provisions of this law.

According to the statement issued Monday, the Unified Tax Procedures Law canceled a number of provisions stipulated in the Value Added Tax Law, in addition to the conflict of some provisions contained in the two laws.

It added that the proposed amendments to the value-added tax law, which is currently being discussed in the House of Representatives, include granting goods or services exported by projects of economic zones of a special nature abroad,or imported to it, with the same tax treatment for goods or services exported abroad by the projects of regions, cities and duty-free shops, to be subject to tax at a “zero” rate; in order to encourage investment in economic zones of a special nature, the goods or services imported for these projects should not be charged with value added tax.

The government pointed to the adoption of some provisions of e-commerce transactions to tax through the application of a simplified registration and collection system, instead of the current system based on the appointment of a legal representative, in line with international standards and the requirements of foreign companies, and consistent with e-commerce applications.

It pointed out that every non-resident and non-registered person with the Tax Authority, who sells goods or performs taxable services to a person who is not registered inside the country, and who does not conduct an activity through a permanent establishment in Egypt, is required to apply for registration under the simplified supplier registration system determined by the executive regulations.

It added that the list of goods and services exempted from value-added tax included: mill products except for imported fine or fermented flour imported from abroad, agricultural products sold in their natural states, including seeds, seeds and seedlings, vegetables and fruits manufactured locally except for juices, pulses, grains and salt, manufactured spices, and freight services on what is imported, and exceeding the tax due on these services that were not collected before the effective date of this law, besides other goods and products.