Egypt: New e-Invoice System Explained

Egypt: New e-Invoice System Explained
  • This article details all you need to know about Egypt’s newly implemented e-invoice system

A critical essence of Egypt’s new invoice system is to ensure that all companies register Value Added Tax, VAT hence Egypt: New e-Invoice System Explained.

Beyond the aforementioned, the new tax system will also ensure that all companies in Egypt selling taxable goods or services register and submit electronic invoices on the Egyptian Tax Authority, ETA’s online portal.

To kick-start the process, companies are expected to register on the new portal with an initial deadline date of December 15th 2022 now extended to April 30th 2023.

As explained by the tax administration, an extension from the earlier date became expedient due to the frequent complaint from concerned taxpayers majorly championed by Self-Employed professionals in Egypt.

Also, the extension time is expected to afford the Finance Ministry ample time to provide solutions to earlier glitches experienced by concerned taxpayers during registration to make the platform more seamless to navigate.

Rationale For Egypt’s New E-Invoice System

Egypt’s e-invoice was conceived to cleanse the tax system from tax injustice, nip tax evasion on the board and capture the informal sector into the already existing mainstream and formal sector.

The cleansing is expected to happen through the creation of a database that will identify all commercial and taxable transactions with an exact prediction of the likely tax revenues.

This system is expected to capture professionals like consultants, artists, lawyers, engineers and doctors.

It is important to note that the e-invoice is defined as a digital document which proves the end of a commercial transaction between parties involved in the sale of goods and services.

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Egypt: New e-Invoice System Explained and Major Highlights

In summary, it is important to note the following major talking points of the new Egypt e-invoice feature:

  • For registration purposes, an account must be created by the taxpayer that encompasses the registration of services on the Tax Authority’s platform.
  • To activate the registered account for usage companies must log onto all of their invoices verified by the authorities before sending out notification to the recipient.
  • The aforementioned allows the authority to track each transaction back through the customer’s regular tax filings, which will include the invoice.
  • Implementation for the e-invoicing will be done in four stages which started in November 2022 and are expected to end by April 2023.
  • The first stage in November is expected to ensure a whooping 134 companies are captured.
  • Before the document is finalized, a major requirement is that it has to be reviewed, signed and verified electronically by the Egyptian tax authority.
  • For affected companies to bill a customer as stipulated by e-invoice, the company is expected to automatically generate an invoice with an automatically given serial number entered as income on the tax return.
  • The e-invoice is expected to consolidate the government’s drive for digital transformation in line with Egypt’s Vision 2030.
  • Companies that want to deal with government ministries, public sector companies, economic authorities, state bodies etc must subscribe to the e-invoice system.
  • The amount payable as tax by the end of the year is derived based on the total revenue minus legitimate deductions for expenses.

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