EGYPT E-INVOICE

The concept of e-invoice, which creates solutions for tax controls, labor and paper savings, is spreading to the different regions of the world. As both governments and businesses are aware of the benefits of e-invoice, the number of countries in the Middle East and North Africa adopting e-invoice systems is increasing. The digital transformation of tax control is spreading accross the world.

The Egyptian Government has been evaluating best practices for CTC regimes forsome time now. Finally, a decree was issued in April 2020 mandating e-invoicing for all businesses registered in the country.

Despite its short history, the Egyptian VAT system follows the latest world trends.Thus Egyptian authorities has implemented mandatory e-invoicing from mid-November 2020.

LEGAL BACKGROUND

The introduction of mandatory electronic invoicing is part of a long-term government strategy called Egypt Vision 2030. It is aimed specifically at the digital transformation of government services.The e-invoice obligation is based on the following two legal processes:

1. Decree No. 188 of the Ministry of Finance of the Arab Republic of Egypt forms the general framework for the mandatory e-invoice for the VAT payment model

2. Decree No. 386 of the Egyptian Tax Administration stipulates e-invoicing for the134 companies operating in Egypt.

According to the legal regulations, issued invoices must be sent to the tax authorities before they are sent to the customer. This means that Egyptian tax authorities will have real-time information on taxpayer bills.

INVOICE DATA STRUCTURE

When it comes to the content of an invoice, most of the required data are the same (e.g. information about the seller/buyer, values).

However, information on supplied products (items) must comply with the Global Product Classification (GPC) defined by the Global Standards 1 (GS1) organization. For GPC, taxpayers need to map internal commodity codes used in SAP.

INTEGRATION PROCESS

Egyptian tax authority has published a guideline describing the steps required to integrate taxpayer ERP users with the e-invoice system. The picture below shows the steps required for integration.The Egyptian regulation states that registered taxpayers must issue an electronicinvoice containing the electronic signature of the issuer and a Unified Code for each good or service provided.

The integration between our customers’ SAP and the Egyptian e-invoice system isbased on various APIs (Application Programming Interfaces). Both APIs and the entire e-invoicing system have been developed by the global IT giant, Microsoft.

File formats for Egyptian invoices needs to be JSON or XML. The issued invoices must be digitally signed.

We help our customers using the SAP System to meet their technological requirements with Melasoft SAP e-Invoice Solution. Melasoft SAP e-Invoice Solution is fully integrated with the Egyptian Tax Administration and can be managed within SAP.

MELASOFT e-Invoice solution provides you;

  • Preparation and analysis for reviewing accounting processes and integration with ETA e-Invoice System

  • Identifying areas requiring change: SAP systems, mandatory data entry (quality and completeness), policies and procedures for those responsible

  • Internal controls

  • Integration of SAP systems with e-Invoice system

  • End user training

Next Steps…

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