Explainer: All you need to know about Egypt's new tax e-invoice system

Ahram Online , Friday 9 Dec 2022

Minister of Finance Mohamed Maait announced on Thursday extending the registration deadline for a new Egyptian Tax Authority (ETA) electronic invoice system -- initially scheduled for 15 December -- until 30 April 2023.

new tax e-invoice system


The extension comes after many self-employed professionals voiced concerns about the new system.

The finance ministry said it extended the deadline in order to find solutions to difficulties that could emerge during registration and to ensure simpler implementation mechanisms.

The new system obliges all companies registered for value-added tax (VAT) and selling taxable goods or services to register and submit electronic invoices on the ETA’s online portal.

Registering in the new system aims to achieve tax justice, curb tax evasion, and integrate informal economy into mainstream or formal economy, according to the ministry.

Under the new system, any entity, whether company or individual, that sells a product or service must register on the ETA’s e-invoicing website.

Upon completely enforcing the system, the ETA will not accept payment records other than e-invoices. 

The ministry had announced that the new e-invoice system applies to self-employed professionals, such consultants, artists,  lawyers, doctors, and engineers.

Lawyers who voiced concerns that the new regulation argue that they provide a public service under the tutelage of the Ministry of Justice and, therefore, should not be treated as a commercial entity.

The Dentists union also issued a statement this week voicing its concerns about registration under the new system.

Here are the major points to know about Egypt’s new electronic invoices system

  • E-invoice is defined as a digital document which proves the commercial concluded between persons for the sale of goods and services.
  • The document has to meet certain requirements and should be signed electronically, reviewed and verified by the tax authority.  
  • The implementation of the e-invoicing system passes through four phases starting November 2020 and ending  April 2023.
  • The first phase of the electronic invoice system was implemented in Egypt in mid-November 2020 by obligating 134 companies to join the system.
  • Subscribing to the e-invoice system is mandatory to deal with ministries, economic authorities, public sector companies, the public business sector, and all state bodies
  • The government expects that the e-invoicing system will improve the VAT revenue situation, and will help create a database that will identify all commercial and taxable transactions and thus better predict likely tax revenues.
  • E-invoice is a part of the government’s plan on digital transformation to achieve Egypt's vision 2030. 
  • In order to bill a customer, the entity will need to produce electronic invoices that are automatically given a serial number and that are automatically filed as income on that entity’s tax return.
  • At the end of each year, the amount of tax due is based on total revenues minus legitimate deductions for expenses.
  • To register, the taxpayers have to create an account whereby they register their products and services on the Tax Authority’s platform.
  • Using these accounts, they log onto all of their invoices, which the authority verifies before sending a notification to the recipient.
  • The authority will then be able to track each transaction back through the customer’s regular tax filings, which will include the invoice.
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