July 8, 2024
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Browse AllInput tax is the tax borne by the taxpayer when purchasing or importing goods (including machinery and equipment) and services, whether directly or indirectly related to the sale of goods or provision of taxable services. The taxpayer is allowed to deduct this tax up to the amount of tax due and carry forward any excess to subsequent tax periods until fully deducted.
In Tax deductions be made in subsequent tax periods, Sometimes, the issuance date of an invoice may be delayed relative to the supply date, but as long as the company is committed to issuing electronic invoices, it may deduct the tax in subsequent tax periods.
If some of the registered sales of goods and services are taxable while others are exempt or subject to a specific tax rate, input tax related to taxable sales is deductible only in proportion to the taxable sales amount relative to the total sales.
When selling new goods that the taxpayer previously used domestically under specific conditions as per regulations, provisions for tax deduction do not apply if the full tax amount due at the time of purchase was not fully deducted.
Input tax deduction is a fundamental part of Egypt’s strategy to boost economic growth and industrial productivity. By stimulating investment and improving the business environment, Egypt aims for sustainable development and strengthens its position as an emerging economy regionally and globally.
In all cases where a tax deduction is legally provided, the deduction is only recognized if the registered taxpayer submits an annual certificate signed by a certified accountant confirming their entitlement to deduction unless tax payment is electronically confirmed by the tax authority.
Egypt’s Value Added Tax Law No. 67 of 2016 is among the most significant tax laws impacting the Egyptian economy. Its principle of input tax deduction must be consistently observed to safeguard business rights (local or import) and maximize tax deduction within legal boundaries, thereby avoiding tax challenges resulting from non-compliance and ensuring optimism and increased liquidity for stakeholders.
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