As Egypt’s aim to move towards digital transformation and the desire of developing the taxation system, the Egyptian Minister of Finance had enacted a decree on 26th of March 2020, introducing the electronic tax invoice system (E-invoice System) and obligated all the natural persons and/or juridical persons to register in the Egyptian tax system to issue electronic invoices that include their electronic signature and the unified code for the provided product or service.
The E-invoice System is considered a central system to enable the Egyptian Tax Authority (ETA) to follow-up on all commercial transactions between all registered companies and taxpayers; in order to improve fiscal control and reduce tax evasion. The E-invoice System is covering the business to business (B2B) companies, with the aim of expansion to cover businesses to consumers (B2C) in the future.
Through the application of the E-invoice System, the paper-based invoices shall no longer be accepted by ETA and shall no longer be used as a proof for costs and expenses incurred by the registered companies and taxpayers.
Purpose and benefits of the E-Invoice System
In light to improve fiscal control and reducing the tax evasion, the ETA proposed the E-invoice System’s project for main following objective and benefits:
- Digital transformation of commercial transactions and dealing with the latest technical methods in verifying the provided information and data;
- Eliminate the parallel or the underground and informal economic markets;
- Achieving the principle of equity of opportunities and justice among taxpayers in the Egyptian market;
- Detecting the fictitious transactions;
- Facilitating and accelerating tax and invoice submitting procedures;
- Facilitating the process of submitting the tax returns.