Egypt’s Tax Digitization Continues

Coskun Antal
December 8, 2020

This blog was last updated on December 8, 2020

Scope of mandatory e-invoice clearance extended

The global trend of Continuous Transaction Controls (CTCs), having spread from Latin America to Europe and more recently to Asia, is now increasingly gaining popularity in Africa. Egypt is modernizing its tax control system, and one of the most important elements of this is implementing the digital processing of invoices.

The electronic invoice project is one of the pillars of the comprehensive digital transformation of the Egyptian tax system. The project’s aim is to create a central solution that enables the Egyptian Tax Authority (ETA) to follow all business transactions between companies (B2B), through the instant exchange of invoice data in electronic format. The e-invoicing platform will enable digital capturing of invoices circulating in the country starting with B2B invoices and later also business to consumer (B2C) invoices.

Legal Background

On 26 March 2020, the Egyptian Minister of Finance published a decree (No:188-2020) announcing the decision to introduce a mandatory clearance e-invoicing framework which means all issued invoices must be digitally transmitted to the tax authority in real-time before being sent to the customer. The decree states that all VAT-registered businesses are obliged to issue an electronic invoice containing the issuer’s electronic signature and a unified code for the goods or service.

On 2 August 2020, the ETA published another decree (No:386-2020), effectively listing 134 companies who are obliged to issue electronic tax invoices for their sold goods or rendered services as of 15 November 2020. This date marked the first phase of a broader roll-out of the e-invoicing obligation that is set to gradually cover the entire national economy. In addition to the first wave of companies that must comply, voluntary adoption of the e-invoicing system is permitted, given that the conditions and controls are met.

A closer look at the e-invoicing flow

E-invoices must be created in JSON or XML format and contain the issuer’s electronic signature and a unified code for the goods or service. After signing, the e-invoice is sent to the ETA’s system to confirm the electronic signature and the content of the invoice. The ETA receives the invoice and issues a single coding for each product (item) in the invoice and stores it in the ETA system.

The ETA approves the invoice and sends a notification to the buyer and the seller who should be registered with the ETA system. The e-invoice is shared through different ways such as web services, SMS, e-mails, or mobile applications. The ETA’s system will store, save, share, audit, analyze and archive the data from the e-tax invoice system. However, companies must also archive their e-invoices in a human readable PDF format ready for inspection by the ETA upon request.

What’s next?

On 20 November 2020, the ETA published yet another new decree (No:518-2020), which lists 347 companies, as a second phase, who are obliged to issue electronic tax invoices for their sold goods or rendered services as of 15 February 2021. Even though it’s not yet formally binding, it was announced through the media that by the end of June 2021 the e-invoicing system will be mandatory for all companies. Taxpayers in Egypt must be prepared for the mandate that will, at some point, require them to implement e-invoicing.

Take Action

Sovos has more than a decade of experience keeping clients up to date with e-invoicing mandates all over the world.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Coskun Antal

Coşkun is Regulatory Specialist at Sovos, based in Istanbul. Coşkun monitors and interprets both the regulations and associated technical specifications issued by tax authorities. He has a Bachelor’s degree in Electrical Engineering from Istanbul Technical University.
Share this post

North America Unclaimed Property
February 10, 2025
Delaware Announces 2025 VDA Invitation Dates

This blog was last updated on February 10, 2025 Mark your calendars – April 11, 2025 and August 15, 2025 are this year’s anticipated release dates for the Delaware’s Secretary of State (SOS) VDA program invitations. In the event that an organization receives an invitation to participate in the Voluntary Disclosure Agreement (VDA) program  , […]

North America Sales & Use Tax
February 6, 2025
The Tariff and Sales Tax Mishmash – Untying the Mess

This blog was last updated on February 12, 2025 Talk of tariffs dominates the current news cycle with some commentators suggesting that tariffs will spell disaster for our economy while others say the exact opposite. We’ve seen the stock market sometimes fluctuate as tariffs are announced but later suspended, leaving us to wonder whether an […]

retailer dtc wine shipping
North America ShipCompliant
February 6, 2025
Retailer DtC Wine Shipping: The Time Has Come

This blog was last updated on February 6, 2025 By Tom Wark, Executive Director, National Association of Wine Retailers We are often reminded by the media and those in the wine industry—as well as by wine enthusiasts—that the three-tier system of alcohol distribution in most states hinders consumer access to the expansive number of wines […]

Montana 1099-DA
North America Tax Information Reporting
February 5, 2025
State Filing Alert: Montana’s New 1099-DA Requirements for Crypto Brokers

This blog was last updated on February 5, 2025 Reporting digital asset transactions on Form 1099-DA just got a little more complicated. For 2025 transactions, crypto brokers that file Form 1099-DA with the IRS will be required to file the 1099-DA with the State of Montana. This makes Montana the first state to introduce a […]

North America ShipCompliant
January 23, 2025
DtC Wine Shipping in 2024: A Year-in-Review

This blog was last updated on January 28, 2025 The direct-to-consumer (DtC) wine shipping channel faced a storm of challenges in 2024, navigating some of the toughest market conditions in over a decade. As inflation tightened wallets and consumer behaviors shifted, the industry recorded its steepest declines in shipment volume and value since the inception […]