Key Facts about Egypt's Electronic Invoicing System
The Egyptian government has announced that it will start using electronic invoicing, in order to improve fiscal control and reduce tax evasion. The measure was announced in March by the Ministry of Finance through decree Nº.188, and it is part of the government's wider goal to boost digital transformation in the country.
The electronic invoice will initially be implemented for businesses (B2B), with the goal of expanding to cover businesses to consumers (B2C) in the future. It is estimated that the electronic invoice will be fully implemented for all companies by April 2023.
The implementation of Egyptian electronic invoicing is being conducted through phases following the gradual incorporation calendar published by the Egyptian Tax Authority (ETA).
B2B e-Invoicing in Egypt
The Egyptian Ministry of Finance announced in March 2020 its roadmap for introducing mandatory business-to-business e-invoicing in the country, through Resolution 188. This resolution will require businesses to use electronic invoicing for all transactions.
Adherence to the system is gradual, depending on the number of invoices issued by taxpayers. The government will announce which companies must subscribe to the system on a mandatory basis through the publication of official decrees.
All companies operating in Egypt registered for VAT purposes must comply with this obligation.
Egyptian e-Invoice Compliance Timeline
- March 2020: Announcement of mandatory use of e-invoice
- November 2020: 1st compliance phase with 134 companies
- February 2021: 2nd compliance phase. (new companies TBA)
- May 2021: 3rd compliance phase. (new companies TBA)
- July 2021: 4th phase mandatory use of e-invoicing for all public sector companies.
- January 2022: VAT will no longer be deductible from paper invoices
- April 2023: All companies must issue electronic invoices
e-Invoicing Requirements in Egypt
- Be registered in the Egyptian invoicing system and obtain a digital certificate.
- Invoices must be electronically signed before delivery to the tax authority.
- The invoice format is JSON or XML.
- All invoices must include a unique UUID (Unique ID) code.
- The products must be coded according to the GPC classification of the GS1 standard.
Features of the Egyptian Invoicing System
The Egyptian tax authority has opted for a clearance model. Companies must first send electronic invoices to the tax administration for their validation. Once validated, they can be delivered to recipients. Electronic invoices must also be electronically signed to ensure the security of the information exchanged. In Latin America, the most advanced region in terms of electronic invoicing in the world, this type of system is widespread and allows for greater tax control.
The system considers the emission and reception of e-invoices, debit notes, and credit notes.
Objectives of Electronic Invoicing in Egypt
- Promote digital transformation in government and businesses.
- Eliminate the underground economy.
- Fight tax evasion.
- Improve tax control.
- Offer equal opportunities to Egyptian companies.
B2C e-Invoicing in Egypt
The Egyptian government launched a pilot project in April 2022 to implement an electronic receipt system for businesses. This is part of Egypt's plan to automate its tax management system.
The e-Receipt process involves implementing a B2C exchange flow that allows businesses to generate a ticket for their customers. The e-Receipt must contain all relevant information, including a QR code validated by the ETA. Companies have a maximum of 24 hours from the issuance of the ticket to send the e-receipt to the ETA.
The e-receipt system also follows a gradual adherence schedule, which started in July 2022, with the inclusion of 153 taxpayers.
B2B Implementation Timeline
- July 2022: The first 153 businesses were required to generate e-Receipts.
- October 2022: ETA announced that 400 additional businesses must comply with e-Receipt legislation.
- January 15th, 2023: 2000 additional Egyptian businesses will be announced by the ETA and must start issuing e-Receipts.
EDICOM's platform can automatically generate electronic receipts. The platform integrates with ERPs in order to extract the necessary information and send it to the ETA for validation. At the same time, EDICOM receives notifications from the ETA and integrates them back into ERPs.
EDICOM – Your e-Invoicing Partner in Egypt
EDICOM is one of the first companies to offer electronic invoicing services in Egypt that comply with the tax authority’s technical and legal requirements.
EDICOM has participated in the Egyptian government’s e-Invoicing mandate since the initial phases as an e-invoice service provider. EDICOM, private companies and the Egyptian government have exchanged feedback used to optimize the e-invoicing system before its mass adoption by all Egyptian taxpayers.
With the fully integrated Global e-Invoicing Platform, you can send and receive electronic invoices automatically. The platform transforms any invoice format into the Egyptian standard, signing the document electronically and sending it to the government for prior validation. In the event of cancellation or rejection by the Egyptian government, the EDICOM platform will send you a notification, allowing for constant traceability of your invoices. The validated invoices are sent to the recipient according to the format agreed upon between the parties.
Sustainable Development Strategy (SDS): Egypt Vision 2030
The government’s new invoicing system aligns with the strategies of its sustainable development plan, Egypt Vision 2030. The plan is a set of initiatives which would have Egypt ranked among the top 30 countries in terms of GDP, quality of life, human development, competitiveness, and anti-corruption by 2030.
The implementation of electronic invoicing is a step toward the digital transformation that the country is pursuing.