Google Will Charge 14% VAT in Egypt Starting in July. This is because the Ministry of Finance has decided that non-resident service providers must pay value-added tax.
Changes in VAT law for e-commerce transactions in Egypt
An official thought that this tax would bring in more than US$64 million in the first year. And then slowly go up in the years to come.
Saeed Fouad, the advisor to the head of the Egyptian Tax Authority. Said that Google will start collecting value-added tax on the electronic services it gives to people in Egypt. Who’re not registered for taxation? This is because the Ministry of Finance recently changed the executive regulations of the value-added tax law. To charge non-resident companies or people a 14 percent value-added tax.
He also said that the tax is put on services or goods given to people in Egypt. Who is not registered with the tax system?
During the fiscal year 2023/2024, which starts in early July. Egypt wants to get LE1.5 trillion ($49.5 billion) in tax money.
Egypt’s Plan to Increase Tax Revenue Through E-Commerce Taxation
Fouad told CNN Arabic in an exclusive interview that the VAT law says that companies outside the country have to pay a VAT of 14% on the services or goods they give to people inside the country.
Egypt’s Participation in the International Tax Agreement
Egypt has signed a deal with the Organisation for Economic Cooperation and Development.
Egypt is one of the 136 countries that have signed on to the Organisation for Economic Cooperation and Development deal.
The deal requires multinational companies to pay their fair share of taxes in all the countries where they do business and make money.
VAT On E-Commerce and Services Expected to Increase Tax Revenue in Egypt
An official statement says that the agreement helps make sure that about $125 billion in profits from large technology companies. Are sent to other countries. According to certain rules. This way, each country gets its fair share of the tax on profits. And multinational companies also have to pay a minimum tax rate of 15%. Google Will Charge 14% VAT in Egypt Starting July
Fouad said that e-Platforms offer marketing services, paid viewing, trade, accounting, tax, and legal consulting. Or e-games are required to receive a VAT from their subscribers and send it to Egypt.
Some services, like booking a hotel room or a flight ticket. Don’t have to pay value-added tax because the service provider already pays it in Egypt.
Foreign Currency Payment for VAT Allowed by the Ministry of Finance
Egypt’s general budget predicts that the value-added tax will bring in LE575.4 billion ($18.6 billion). In the new fiscal year 2023/2024. This is an increase of 20.5% over the current fiscal year.
Fouad predicted that the value-added tax on services and e-commerce will bring in LE 2 billion ($64.8 million). During the next fiscal year. This is based on the assumption that these revenues will double every year. Because more people are using e-commerce since the coronavirus pandemic.
