The Egyptian Ministry of Finance has recently stated that its draft law about electronic invoicing will have positive economic effects. More VAT taxpayers will be registered, and VAT revenue will increase.
The Egyptian decree states that registered taxpayers must issue an electronic invoice containing the issuer's electronic signature and a Unified Code for each good or service supplied – all of which should be authorized by the Head of the Tax Authority (a clearance model). Failing to do so would be considered tax evasion by the tax authorities. The new Egyptian system should detect mistakes in invoices and proactively inform taxpayers for corrective actions. The tax declaration system requires required information such as the tax identification number, national ID number, name, and domicile of the vendor in the taxpayer's purchase invoice. Such information shall facilitate a more real-time tax audit as an automatic assessment of sales, and purchase invoices will take place.
In cooperation with an experienced international corporation, the Ministry of Finance is currently working on automating the tax declarations system fully. VAT declaration shall be automatically filled via invoices to trigger the first step of electronic invoices. Taxpayers can upload details of their invoices through a simplified, automated accounting tool, an Excel sheet, or type them manually onto the program, the statement noted.
Further details about this new law introduction will be published in the official Egyptian Gazette ("al-Waqā'i'al-Miṣriyyah").
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Written by Richard Cornelisse
Richard advises multinational businesses in improving the efficiency and effectiveness of their Indirect Tax Function and Tax Control Framework.
He started his career as a manager at Arthur Andersen and then became a partner in EY where I led the indirect tax performance team for Netherlands and Belgium. Currently, he is a senior managing director of KEY Group.
Richard has over 20 years’ experience advising clients on international VAT issues. He is specialized in the tax aspects of financial transformations, shared service center migration, and post-merger integration work. Richard is also somewhat of a mentor, giving back to the profession. If you are interested in conversation and discussion, please feel free to contact him.