Digital economy
The ETA established an e-commerce unit in Egypt to regulate the digital economy inside the country.
Electronic goods
Any individual or juridical person practising the activity of selling goods (subject to general rate only or combining general rate and exempted goods together) through websites or social media platforms to independent sellers, and have attained the registration threshold, shall be required to register with the VAT tax authorities.
However, if their revenues are related to commissions, exported goods or goods subject to schedule tax, then they are obligated to register for VAT once they start their businesses.
Electronic services
This means services provided through the Internet or any social media platforms, freelance services and e-learning.
Freelancers usually practise professional services that are subject to 10% schedule tax, which makes it necessary for them to register for VAT once they start their businesses. However, if the freelance activities, for example, are related to design or selling mobile and computer software that are subject to 14% general rate and have attained the registration threshold, they are required to register with the VAT tax authorities.
E-learning services are exempted from VAT, unless the service providers do not work under educational institutions, therefore they shall be treated as freelancers providing professional services subject to 10% and obliged to register for VAT once they start their businesses.
In light of the Egyptian government’s continual efforts in the digitalisation journey, the ETA has implemented a simplified VAT registration and compliance framework for non resident vendors and electronic distribution platforms (EDPs) selling remote services to consumers in Egypt. Accordingly, the ETA issued the VAT guidelines for remote services provided by non residents by MOF decree no. 160 for 2023.
The guidelines are addressed to non resident service providers and digital product vendors.
All non-resident service providers and digital products vendors are required to register according to the guidelines within three months from the date of the ministerial decree (22 March 2023).
If sales exceed EGP 500k annually, the service providers should register under the new simplified vendor registration system.
Non resident service providers and EDPs shall register for VAT online, without having to establish a physical presence in Egypt.
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