Bloggers Earnings in Egypt: Tax Registration and Compliance

The digital content industry, including bloggers’ earnings in Egypt, can be a platform for expressing ideas and opinions and, at the same time, can serve as a significant source of income. In Egypt, bloggers’ profits are increasing day by day, and this phenomenon has surpassed the stage of a mere hobby to become a promising future profession. Simply put, with a growing audience, significant revenue can be generated.

Whether considered a hobby or a profession, tax authorities have classified it as a business as of September 25, 2020. Content creators like YouTubers and bloggers are required to register for taxation and pay taxes once certain income thresholds are met. In this article, we will discuss the taxation of YouTubers and bloggers, provide an overview of e-commerce and its types, and discuss how taxes are calculated based on bloggers’ earnings in Egypt, as well as the process of filing tax returns.

What is E-Commerce?

E-commerce is the process of trading goods and services in various forms, conducted through online platforms, social media, websites, mobile applications, and computer software. Nowadays, the world is clearly shifting towards digital platforms, making everything accessible with just a click of a button.

Types of E-Commerce:

E-commerce in Egypt appears in two main forms:

Goods Provision:

This involves trading tangible goods, regardless of their nature or purpose, domestically or internationally, as well as all digital products and programs. Buying and selling occur through online stores, social media platforms, mobile or computer applications.

Service Provision:

There are various types of services offered through e-commerce, encompassing non-physical items, whether domestic or imported. Services are divided into three categories:

Online Services: These are the most comprehensive services in e-commerce, including professional services traded through online platforms, software, mobile apps, and computers. Among these services are medical consultations, legal advice, accounting services, tax consultations, engineering consultations, online marketing, website design, and various design services. Therefore, most fields can offer their services online, expanding their business activities and increasing profit rates.

Freelancer:

The term “freelancer” has recently become popular, especially during the COVID-19 pandemic. Many people turned to work from home without the need for gatherings in company offices, and individuals needed a guaranteed source of income away from the challenges faced by most institutions. In this case, services are traded by an independent person who conducts their activity without any relationship of subordination with an employer, typically through the internet.

E-Learning:

Remote learning is one of the types of education that has received significant attention. It is one of the easiest and most prominent forms of e-commerce. Buyers only need to register through websites, educational platforms, or mobile apps to start their educational journey, whether it’s school education, university education, or courses in any field of work.

There are various and diverse types of e-commerce, prompting the Tax Authority to impose taxes on e-commerce in Egypt based on the nature of the business activity.

How Bloggers and YouTubers Earn Their Profits:

Blogger:

Bloggers earn revenue by creating visual or written content on their blog, which they use for funding or commerce. Some bloggers generate content by showcasing products for companies in exchange for payment, while others offer consultations through their blog. This naturally increases bloggers’ earnings in Egypt.

YouTuber:

YouTubers earn their income by providing visual content (videos) on YouTube. Their revenue depends on the number of views, interactions, and similar metrics.

The Egyptian tax authority has decided to impose taxes on digital content creators to achieve tax equality and fairness.

Before YouTubers or bloggers are subject to tax payment, all revenues generated from various content creation activities are calculated. These activities include revenues from the site used, sponsored advertisements for goods and services, or the sale of proprietary products. Costs and necessary expenses are then deducted.

In case there are no records showing expenses, 10% of the total earnings of bloggers and YouTubers in Egypt are deducted. Then, the tax payment process can begin.

Income Tax:

Income tax is a direct tax imposed on individuals or entities (companies) based on the income generated from content creation activities, whether for providing services or engaging in commercial, industrial, or other activities, according to the Income Tax Law of 2005.

The Tax Amount Payable by Individuals is Divided as Follows:

• 0% rate if the estimated net income reaches 40,000 Egyptian pounds.
• 10% rate if the estimated net income reaches 55,000 Egyptian pounds.
• 15% rate if the estimated net income reaches 70,000 Egyptian pounds.
• 20% rate if the estimated net income reaches 200,000 Egyptian pounds.
• 22.5% rate if the estimated net income reaches 400,000 Egyptian pounds.
• 25% rate if the estimated net income reaches 1,200,000 Egyptian pounds.
• 27.5% rate if the estimated net income exceeds 1,200,000 Egyptian pounds.

Bloggers and YouTubers (individuals) are required to submit annual tax returns during the period from January 1st to the end of March each year. Companies are required to submit returns from January 1st to the end of April each year, or within the four months following the end of the fiscal year.

The Egyptian Tax Authority issued a decision calling upon visual and written content creators (bloggers and YouTubers) to visit the nearest tax office to open a tax file, disclose their profits, and register for Value Added Tax (VAT) if their revenues reach 500,000 Egyptian pounds or more. Let’s delve into the details of this tax:

Value Added Tax (VAT):

VAT is an indirect tax imposed on goods traded by content creators during trading stages or service provision, excluding goods and services exempt from tax. It is calculated as an additional value on top of the agreed-upon price, borne by the funder or client.

Monthly tax invoices must be issued within a month of the previous month’s transactions. Registered individuals or entities must submit a zero-return if no sales are made or if they provide exempt services.

How Is a Tax File Registered?

To register a tax file, you need to visit the nearest tax registry office and provide the required documents. These documents include:

• A copy of your national ID card.
• A lease or ownership contract.
• Recent utility bills.

If there is a minor involved, the tax file will be opened in their name under the guardianship of their legal guardian. The guardian must provide the required documents along with the minor’s birth certificate.

Who Is Required to Open a Tax File Among E-commerce Owners in Egypt?

Opening a tax file to pay online sales taxes is mandatory for all funders engaging in any commercial activity with the aim of making a profit. The Director of the Registered Taxpayers Department at the Tax Authority mentioned that all individuals engaging in commercial activities – whether through social media platforms or websites – must register with the tax authority to submit the annual tax return for online companies.

What If a Blogger or YouTuber Doesn’t Register a Tax File?

Not filing a tax return is not to be taken lightly, with no room for leniency. If content creators fail to register themselves with the tax authority and do not submit tax returns, they are subject to legal action and may face imprisonment for a period of no less than six months and not exceeding five years, and a fine equivalent to the tax that was not paid according to this law, or one of these two penalties.

What Are the Advantages of Registering with the Egyptian Tax Authority?

There are several advantages to registering with the tax authority, and they can be summarized as follows:

• Building Your Career: Registering with the tax authority adds credibility to your career as a YouTuber or blogger in Egypt and enables you to earn income consistently.
• Social Insurance Benefits: You can benefit from social insurance advantages such as health insurance and pensions, considering content creation as your primary job.
• Ease of Banking: Registered individuals find it easier to deal with banks and access loans.
• Legal Foreign Money Transactions: You can legally withdraw and use funds received from outside Egypt.
• Commercial Register Extraction: You can easily obtain a commercial register.
• Participation in Government Tenders: Registered individuals can participate in government tenders and auctions.
• Incentives and Awards: Tax invoices enable you to benefit from incentives and monetary awards.

Digital content creation has a significant impact on our society. Despite being a double-edged sword that can benefit or harm its audience depending on the nature and credibility of the content, it serves as a means to increase bloggers’ earnings in Egypt and for YouTubers as a legitimate source of income.

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