On 17 November 2024, the Egyptian Tax Authority (ETA) issued Instruction No. 78 of 2024, which cancels Instructions No. 5 and 6 of 2019. Previously, these instructions mandated that amounts transferred from foreign companies to their commercial agents, legal representatives, and branches operating in Egypt were subject to a 14% Value Added Tax (VAT).

The new instruction is effective immediately from the date of its issuance. However, any VAT or schedule tax collected before the issuance of this instruction must still be remitted to the ETA within the legally mandated timelines.

This update signifies a notable change in the VAT treatment of exported services, potentially applying a 0% VAT rate. This change is expected to ease the tax burden on exported services, fostering a more favorable business environment in Egypt.

Contacts

For further information about this alert, please contact the subject-matter experts below or your usual Deloitte contact:

Business Tax
Rami Qudah
Nauman Ahmed
Ramy George
Aly Abdelmoamen
Bishoy Walaa
Eslam Azzam
Michael Sabet
Reham Selim

International Tax
Giuseppe Campolo
Andrew Samir

Transfer Pricing
Mohamed Serokh
Hesham Lotfy
Arjun Singh 

Indirect Tax
Michael Camburn
Ibrahim Badawy
Amr Mohamed