KPMG in Egypt provides an overview of recently released executive regulations for the country’s new value-added tax (VAT) law, which replaces the current sales tax law.
On 7 March 2017, Egypt’s Ministry of Finance released the executive regulations for interpreting the new VAT law. The law imposes VAT on all commodities and services, including local or imported commodities and services listed in a table attached to the tax law.
According to the executive regulations, services that are not subject to VAT include:
The executive regulations specify that the documents required to verify exported services include a signed service contract, tax invoice and bank transfer from abroad to Egypt.
The executive regulations specify that a cost allocation to subsidiaries for a taxable service rendered by their holding/parent companies or received by their holding/parent companies from others in exchange for payment is considered as private use and subject to VAT.
The executive regulations also cover: