Announcement of the mandatory use of e-bill
Breaking News: New Deadlines 2022
The e-invoicing obligation in Egypt already started in 2020 and has been extended in phases since then. Since July 2021, all large companies have been obliged to use electronic invoicing, or the B2G e-invoicing obligation applied from that point on. At the beginning of 2022, this obligation will be extended to all companies and Egypt will also introduce a B2B obligation.
VAT for food delivery services
Egypt and the road to electronic invoicing
Currently, the Egyptian Tax Authority is identifying different models to introduce e-invoicing. In May 2019, a statement was published by the Egyptian Ministry of Finance to positively advance this process. On November 15, 2020, Egypt introduced e-invoicing in a test phase for selected, large companies. Later, the process will be extended to all VAT registered companies.
The government expects the e-Invoicing introduction to have many positive economic aspects, such as improving the VAT revenue situation. The introduction is also expected to have a positive impact on the creation of a database that will identify all commercial and taxable transactions and thus better predict likely tax revenues. In this regard, the tax authority defines what requirements must be placed on the e-Invoicing solution in the future.
The test phase now introduced is based on the Italian SdI e-Invoicing model, as the e-Invoices must contain a unique digital signature of the suppliers and a uniform code to identify the goods or services, and must be approved beforehand by the Egyptian tax authority. Egypt has now designated 134 identified companies for the test run, which must adhere to the new e-Invoicing requirements.
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Who is affected by the e-Invoicing mandate?
All companies that are registered for VAT in Egypt and sell taxable goods or provide such services.
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How does e-Invoicing work in Egypt?
Taxpayers first register with the tax authority, where they receive login credentials, API access, and the e-Real certificate. Sales invoices must be reported and validity confirmed by the taxpayer on a daily basis. The confirmation can be done via an authority portal or via a free mobile app.
Egyptian authorities have provided API interfaces and software development kits for companies to submit invoices via XML or JSON. The invoice contains the regular mandatory fields for transmission and the product descriptions must follow the “Global Product Classification System”.
How e-invoicing will proceed in Egypt remains exciting and the fine details of the e-invoicing requirements have yet to be worked out.
UPDATE
Egypt decided this year to fully introduce electronic invoicing. This measure was announced in March 2021 in the form of a mandate. The introduction of the electronic format will take place in steps:
March 2020
November 2020
1. Compliance phase with 134 companies
November 2020
February 2021
2. Compliance phase (new companies)
May 2021
3. Compliance phase (new companies)
May 2021
July 2021
4. Phase: mandatory use of e-billing for all public companies
January 2022
VAT is no longer deductible on paper invoices
January 2022
Since July 2021, public sector companies, economic authorities, and government agencies must follow the e-invoicing mandate, in addition to other affected companies.
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Muzaffer Havcarci
INPOSIA e-Invoicing-Specialist
