Egypt amends its rules on VAT for non-resident suppliers in e-commerce transactions

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Egypt amends its rules on VAT for non-resident suppliers in e-commerce transactions

Sponsored by

Saleh, Barsoum & Abdel Aziz – Grant Thornton Egypt logo.png
ecommerce-3562005.jpg

Rabie Morsy, Ahmed Khalifa and Sandra Aziz of Saleh, Barsoum & Abdel Aziz – Grant Thornton Egypt summarise the main changes under a newly issued decree.

On January 11 2023, the Egyptian Minister of Finance issued Decree No. 24 of 2023 (the Decree) amending aspects of Executive Regulation No. 66 of 2017 of VAT Law No. 67 of 2016 covering VAT on e-commerce transactions by introducing a registration-based collection mechanism for non-resident suppliers (NRS).

The Decree covers the following areas.

Electronic distribution platforms

The Decree introduces a new definition in the Egyptian Tax Code for “electronic distribution platforms” such as visible digital “storefronts” in the form of websites, internet portals, e-stores or internet marketplaces through which suppliers connect with clients.

Responsibility for VAT collection

The electronic distribution platform is not responsible for collecting taxes and remitting them to the Egyptian Tax Authority (ETA) if certain conditions are met.

A simplified registration process

NRS of goods or services, via any electronic channel, should register for VAT through the Simplified Registration Regime (SRR) using the electronic portal of the ETA.

If NRS do not register, the ETA will deem the NRS to be registered from the date their sales in Egypt reach the registration threshold.

Imported services

Egypt is considered the place of consumption/benefit of any imported services if provided by:

  • NRS, or their representative;

  • Any electronic means; or

  • A resident person in Egypt but provided from outside Egypt.

If the provision of a service does not require the physical presence of the supplier in a specific place, then Egypt is considered the place of supply in the following cases:

  • The non-registered service recipient is resident in Egypt if proven by details of its address, payment information and digital login;

  • The service recipient is registered in Egypt; or

  • The service recipient is a registered or non-registered Egyptian legal entity.

The reverse-charge mechanism regime on imported services

Law No. 3 of 2022 and its executive regulations introduced the SRR and specified that the obligation to charge VAT on B2C transactions, and the duty of remittance to the ETA, lies with the non-resident supplier.

For B2B transactions, local VAT registered businesses that receive services should apply the reverse-charge mechanism if the non-resident supplier is not registered under the SRR.

Under Law No. 3 of 2022, VAT-exempted businesses (not VAT registered) that receive imported services from non-resident and non-registered suppliers (under the SRR) should register for reverse-charge mechanism purposes, calculate the VAT, and remit it to the ETA within 30 days from the date of receiving the imported services.

Imported goods

VAT on imported goods is due at customs clearance unless VAT was collected by a non-resident registered supplier under the SRR.

However, the Customs Authority may charge additional VAT and other duties on any amounts not previously subjected to VAT.

Input VAT refunds

NRS under the SRR are entitled to a refund of input VAT incurred in Egypt on their purchases if they are related to the provision of their main activities.

more across site & shared bottom lb ros

More from across our site

AI-powered tax agents are likely to be the next big development in tax technology, says Russell Gammon of Tax Systems
FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
A ‘joint understanding’ among G7 countries that ‘defends American interests’ is set to be announced, Scott Bessent claimed
The ‘big four’ firm’s inaugural annual report unveiled a sharp drop in profits for 2024; in other news, Baker McKenzie and Perkins Coie expanded their US tax benches
Representatives from the two countries focused on TP as they met this week to evaluate progress under a previously signed agreement – it is understood
The UK accountancy firm’s transfer pricing lead tells ITR about his expat lifestyle, taking risks, and what makes tax cool
Dolphin Drilling intends to discuss the final liability amount and manner of settlement with HM Revenue and Customs
Gift this article