Rasha Abdel Aal, Chairperson of the Egyptian Tax Authority (ETA), has announced the release of a comprehensive explanatory guide addressing the tax treatment of contracting and construction services under the provisions of Law No. 157 of 2025.
Abdel Aal explained that the new guide aims to enhance tax awareness within the contracting sector—one of the key pillars of Egypt’s national economy—by simplifying tax concepts and procedures for all stakeholders.
She noted that the guide is available for viewing and download on the ETA’s official website. It provides detailed explanations of tax obligations for both main and subcontractors, outlines the process for issuing and submitting electronic invoices and receipts, and clarifies the correct method for calculating Value Added Tax (VAT) at the standard rate on the total invoice or e-receipt value. The guide is designed to ensure full legal compliance and promote voluntary tax adherence.
The ETA chairperson added that the guide also explains how to handle contracts concluded before and after the law’s implementation, as well as the tax treatment of inventory, and the mechanisms governing deductions, additions, and advance payments. It further details the tax procedures applicable to government entities, local administration units, and public authorities when dealing with direct supplies to the tax authority, which are subject to a 20% withholding rate on VAT due for invoices issued under such contracts.
To support practical understanding, the guide includes a section of frequently asked questions and numerical examples demonstrating VAT calculations on e-invoices. These examples are intended to assist taxpayers, accountants, and consultancy firms in applying the law accurately and efficiently.
Abdel Aal emphasized that this publication forms part of the ETA’s ongoing efforts to unify tax concepts and provide accessible advisory resources, in line with the directives of Minister of Finance Ahmed Kouchouk to streamline and modernize tax procedures. She stressed that the authority prioritizes proactive awareness campaigns before implementing new regulations to ensure transparency and readiness among all parties.
The ETA Chairperson reaffirmed that the release of this guide reflects the authority’s commitment to transparency, clarity, and continuous engagement with the tax community. She added that the ETA will continue to issue similar reference guides for other sectors to support a simplified tax system and foster voluntary compliance across the board.
