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").
What do we offer?
The partners Key Group and Diseno Consulting are jointly developing the SAP add-on for Egypt, and we have closed a strategic partnership agreement with SAP's gold partner 'Logical Application for Business Solution' (LABS), from Cairo in Egypt.
We provide the Egyptian e-invoicing requirement, an E2E SAP solution, and take a proactive lead in what needs to be done to be ready. Most organizations face challenges with hardware-based Digital signature, and we have built a solution, which is easy and faster to deploy. We are deploying our Digital signature for both HSM devices as well as USB Token.
LABS is our exclusive partner and is fully engaged during R&D and implementation of our e-invoicing SAP add-on for Egypt. KG and LABS have both clients that are selected by the government for the above-mentioned first pilot phase. We will have a proven concept operational for clients that will be part of the next waves.
PowerPoint for features of the SAP add-on and legal background
What is an SAP add-on?
An SAP add-on enhances standard SAP itself.
Add-on components are extra functionalities that do not come with the main SAP product. Different organizations have different requirements. SAP has recognized that and facilitated that additional functionality can be added and that such functionality as a component can be integrated with Standard SAP.
An add-on is permitted by SAP – the code 'ABAP' is written and transported where SAP allows it. That means these add-on components sit above the core and access the same dictionary objects or repository objects and perform the required functionality. It contains custom authorization objects according to SAP standards.
SAP add-on solutions are, therefore, without an external interface or external software and can be implemented with minor or no SAP impact in any other area. An SAP add-on does not change the programming code of SAP. As a result, SAP upgrades do not lead to any problems, and maintenance is straightforward. Additional functionality is added to Standard SAP.
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.