Effective 8 September 2016, the supply of services by a non-resident is generally subject to VAT. A non-resident providing services through an establishment in Egypt, is required to register for VAT if the registration threshold is exceeded.

Effective 27 January 2022, where a non-resident has no establishment in Egypt, and the supplies are made to VAT non-registered resident buyers, then the non-resident supplier is required to register under the simplified vendor registration system.

Until 26 January 2022, such non-resident supplier was required to appoint a tax representative or agent in Egypt to fulfill the VAT obligations.

If the supplies are made to a VAT registered Egyptian resident, then the Egyptian resident is generally responsible for fulfilling the VAT obligation, unless the non-resident is registered under the simplified vendor registration system. Entities registered under the simplified vendor registration system do not have the right to deduct their input VAT. However, the refund the input VAT that is used to perform their activities in Egypt can be claimed.

Digital Supplies

Effective 22 June 2023, a non-resident rendering electronic and digital services (remote services) to a customer in Egypt through a website, electronic distribution platform, social media store, or application, is subject to VAT at the standard rate although a reduced rate of 10% applies for professional and consultancy services.

Remote services are defined as any services where, at the time of the performance of the service, there is no necessary connection between the physical location of the recipient and the place of physical performance, including, but not limited to:

Supplies of digital content, such as e-books, movies, TV shows, music, and online newspaper subscriptions;
Online supplies of games, apps, software, and software maintenance;
Website design or publishing services; and
Legal, accounting, or consultancy services.

A service that requires the physical presence of a customer in a specific location to receive it ("on the spot" services) is not a remote service, even if booked online, such as hotel booking services, physiotherapy services, entry to entertainment or sporting events, restaurant and catering services, and passenger transportation services.

A remote service is considered rendered to a recipient in Egypt if:

The recipient is a non-registered person that has permanent residence in Egypt, based on collected residence information, payment information, and access information;
The recipient is a registered taxpayer in Egypt, unless the service is used predominantly by a permanent establishment of the taxpayer in another country; or
The recipient is a government body or a public or economic authority or any other authority or non-registered entity in Egypt.

When a non-resident vendor makes a supply of remote services to a resident registered taxpayer (i.e., B2B supplies), the resident taxpayer is required to account for and remit VAT using the reverse charge scheme, with no obligation for the non-resident to charge or remit VAT, although the non-resident is required to confirm the resident taxpayer's tax registration number.

When a non-resident vendor makes a supply to a resident non-registered consumer (i.e., B2C supplies), the VAT obligations depend on whether the remote services are sold by:

A non-resident vendor via their own portal or application to the consumer, in which case the vendor has to register for VAT (simplified vendor registration regime); or
An electronic distribution platform (EDP) or by a non-resident vendor through an EDP, in which case the EDP has to register for VAT (simplified vendor registration regime if the EDP is non-resident), although an EDP is not responsible in certain exceptional cases where the EDP has only very limited influence or involvement in the services sold.

Simplified Registration

Non-residents are required to create an account on the tax authority website to register under the simplified registration regime. Non-resident vendors are not required to appoint a fiscal representative however, the existing registered non-resident vendors under the standard regime should apply for simplified registration after their representative applies to be deregistered.

The threshold for simplified registration in respect of remote services is the same as for standard registration (see Sec. 11.), but if the service is a professional and consultancy service subject to the reduced VAT rate, registration is required regardless of turnover.

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