Egypt VAT exemptions

Sun 22nd May 2016

As Egypt prepares to introduce VAT following the approval of a revised Bill by the Cabinet last week, the tax authorities have clarified some of the supplies which will enjoy a nil rate or exemption.

The new Egyptian Value Added Tax will be introduced at a rate of 10%, as is the existing Sales Tax.

Basic foodstuffs will be nil rated. These include milk, other dairy products and related food supplements. Restaurant services to non-tourist customers (i.e. outlets without a tourist license) will be nil rated. Many commodities will be nil rated or exempt. These will include crude oil, gas, public water supplies and paper.

Financial services (banking and insurance) will be exempt. This follows the EU model for VAT – although countries, such as China, have recently imposed VAT on financial services. Education, cultural and religious services will be exempted.