B2B – B2C Invoice and Egypt
Moving to the next level in the e-invoice system on February 15, 2021, the Egyptian Ministry of Finance and the Egyptian Tax Administration (ETA) continue to modernize the solutions used for tax information management and processing.
The most significant element of this general modernization is the digital processing of invoices. It is a central solution creation activity that enables ETA to follow within the framework of the ETA Reform Program, which is a part of Egypt’s 2030 Digital Transformation vision and improves government services and is one of the main projects. A total of 400 companies have completed their integration processes with e-invoice system so far. From February 15, 2021, it has become a legal obligation for companies registered in the system to issue e-invoices for goods or services.
It is valid for all business transactions (B2B) between companies through instant exchange of invoice data in digital format. E-invoice platform will enable digital issuance of (B2B) and (B2C).
Benefits Expected by the Egyptian Government from the e-invoice System
With the prepared e-invoice platform, taxpayer assessment, VAT declaration management, audit, and compliance processes become simple.
This makes the following general benefits possible:
- Fully digital invoice processing
- Simplifying declaration submission
- Reports and additional information, both at the level of all companies and Egypt’s economic activity
- Enhanced digital taxpayer experience
- Encourage the informal economy to comply with official standards
Specific taxpayer benefits expected in the short term are:
- Verifying invoice items and data for the parties before issuing
- Improving the taxation position of the company by classifying it as a Low-Risk company
- Facilitate intercompany payment methods for VAT
- Improving invoice exchange methods between companies
- Facilitate CPA review to prepare financial statements
Specific taxpayer benefits expected over the long term are:
- Reducing administrative burden, transaction costs, and the need to archive paper invoices
- Reducing control processes with the possibility of remote control
- Tax returns’ facilitation
- Declaration preparation and filing process facilitation
- To effectively support the unification of the informal economy and ensure tax justice
The Egyptian government, which attaches importance to the digitalization of financial transactions, operates legal provisions for companies that do not participate in the e-invoice system. It states that companies that don’t issue e-invoices will refer to prosecutor’s office until mid-April.
Egypt attaches great importance to the digitalization of commercial transactions and tax transactions. These digitalization elements will inevitably contribute to the growth of Egypt.