Minister of Finance Ahmed Kouchouk has issued two ministerial decrees introducing new facilitations for taxpayers under the Value Added Tax (VAT) system, aiming to strengthen trust, partnership, and tax certainty between the government and the business community.
The first decree amends certain provisions of the executive regulations of the VAT Law, while the second establishes a new accounting framework for calculating VAT on contracting and construction agreements. This applies to contracts for which a certified payment certificate, e-invoice, or e-receipt was issued before the enforcement of Law No. 157 of 2025, and that continue to be implemented afterward.
Rasha Abdel Aal, Chairperson of the Egyptian Tax Authority (ETA), explained that the amendments broaden the definition of indirect inputs related to the sale of taxable goods or services. These now include financing and construction costs, in addition to indirect production and operating costs, sales and distribution expenses, and general and administrative expenses. This expansion effectively allows taxpayers to deduct VAT paid on financing and construction-related inputs.
Abdel Aal also noted that the suspension period for VAT payment on dismantled production lines—whether purchased locally or imported in separate shipments—has been extended. The suspension will now start from the date of purchasing the final component from the local market or the release of the last shipment from customs.
In addition, a new accounting basis has been introduced to calculate VAT on contracting and construction projects that began before Law No. 157 of 2025 took effect but continue thereafter. The law, enacted on July 18, 2025, introduced the latest amendments to Egypt’s VAT framework.
These decisions form part of the Finance Ministry’s ongoing efforts to simplify tax procedures, enhance clarity in implementation, and promote a transparent, investment-friendly business environment.
