Egypt: President signed Law No. 3 amending some provisions of Value Added Tax Law

On 26 January 2022, the President signed Law No. 3 of 2022 amending some provisions of the Value Added Tax Law promulgated by Law No. 67 of 2016 and the Stamp Tax Law promulgated by Law No. 111 of 1980, and it was published in the official gazette. The law will come into force the day after its publication. The changes introduced a 0% VAT rate on goods and services exported by projects operating in special economic zones, as well as on imports made by these projects from abroad or from other parts of Egypt outside the zones. A simplified VAT registration system was established for non-resident suppliers lacking a permanent establishment in Egypt. Alongside this, reverse charge and registration requirements were introduced for non-registered persons importing VAT-subject services. However, non-resident suppliers registered under the simplified system are exempt from reverse charge obligations and VAT collection by customs. Additional provisions include a temporary one-year VAT suspension, extendable by another year, for industrial machinery and equipment purchased locally or imported. This suspension converts to a VAT exemption if the machinery is used for industrial purposes during the suspension period and for the subsequent five years. Expanded VAT exemptions now cover sanitation services, non-touristic marine transportation, air transportation, and specific food imports. Penalties for non-evasion VAT violations have been revised, ranging from EGP 1'000 to EGP 10'000, with stricter penalties for repeated offences. Advertising services are now subject to a 14% VAT, replacing the former 20% stamp duty, although certain advertisements for government and public authorities remain exempt.