Egypt's Tax Authority prepares comprehensive guide on exported services

Zawya

08-05-2025

Egypt - Rasha Abdel Aal, Head of the Egyptian Tax Authority (ETA), has announced that a comprehensive guide on the tax treatment of exported services is currently under preparation.
The guide aims to provide a unified, accurate, and widely accepted reference for businesses and tax professionals, addressing ongoing ambiguities in the tax system.
Her remarks came during a virtual seminar hosted by Deloitte Egypt, which brought together representatives from companies, tax consultants, and experts to discuss recent tax facility initiatives introduced by the government to support the business environment and simplify procedures.
Abdel Aal explained that earlier directives issued to clarify the taxation of exported services had inadvertently created confusion during implementation, leading to their cancellation—a move broadly welcomed by the professional community. She emphasized the importance of direct engagement with taxpayers as a core strategy to resolve challenges and ensure practical, transparent tax administration.
She noted that the first phase of tax facilities has delivered measurable benefits, including improved voluntary compliance, higher tax revenue, and a significant number of taxpayers filing amended returns to benefit from the new provisions. These measures have also helped settle a large number of outstanding tax disputes and strengthened trust between the Tax Authority and the business community.
VAT refunds, Abdel Aal said, remain a top priority for the Authority and receive direct oversight from the Minister of Finance. As part of the current reforms, the Tax Authority aims to increase the volume of VAT refund cases by three to four times, with recent changes already reducing average processing time to about 22 days. However, she acknowledged that challenges remain and called on taxpayers to submit accurate and complete documentation—now clearly outlined on the Authority's website—to further streamline the refund process.
Abdel Aal reiterated that effective implementation is essential to successful tax policy. From the launch of the tax facility package, the Authority has focused on promoting tax fairness, ease of compliance, and constructive partnership with taxpayers across all provinces.
She also highlighted efforts to support small enterprises with annual revenues of up to EGP 20m through a simplified tax system. This is part of a broader strategy to encourage businesses in the informal sector to integrate into the formal economy. The simplified framework aims to ease both tax and procedural burdens, but participation requires registration in the electronic invoicing and receipt systems.
To support this transition, the Ministry of Finance and the Tax Authority are providing technical assistance and training to help small businesses adopt the system. This includes facilitating electronic signature issuance, offering point-of-sale (POS) devices, and covering associated costs—all aimed at accelerating the digital transformation of commercial operations and enhancing tax compliance.
Abdel Aal also underscored the important role of certified accountants in supporting the tax system. She announced the activation of a pre-ruling system that provides binding guidance on the tax implications of future transactions, helping investors make informed decisions and comply with tax laws with greater certainty.
She further noted that the Authority is addressing issues related to the registration of virtual permanent establishments. Coordination between the General Directorate of International Agreements and the Corporate Tax Department is underway to streamline the registration process. New instructions on registration and profit allocation for virtual permanent establishments—aligned with international standards—are also under consideration.