The Egyptian Tax Authority has issued Executive Instructions No. (45) for 2025 on handling exported services. The instructions aim to standardize tax treatment for services provided abroad, following directives from the Minister of Finance. A comprehensive guide in Arabic and English has been released to assist taxpayers.
The Egyptian Tax Authority (ETA) has released Executive Instructions No. (45) for 2025, outlining the mechanism for taxpayers to handle exported services, as stated in a release from the office of ETA head Rasha Abdel Aal. This issuance follows directives from the Minister of Finance, seeking to reinforce tax compliance, streamline procedures, and ensure proper application of Value Added Tax (VAT) Law No. 67 of 2016 and its executive regulations.
Abdel Aal explained that the instructions define an exported service as one provided by a registered entity in Egypt to a recipient outside the country, regardless of whether the provider is a resident or non-resident, provided the service is delivered from within Egypt. They cover controls for remotely provided services and those not requiring the physical presence of the provider or recipient.
A zero tax rate applies when a registered entity in Egypt supplies services to a non-resident client, allowing the provider to retain input tax credit rights through the reverse charge mechanism or the tax system in the recipient's country. The instructions specify exclusions, such as services related to immovable properties in Egypt or those necessitating the physical presence of both provider and recipient within the country.
To support taxpayers, the ETA has produced a comprehensive guidance manual in Arabic and English, detailing the concept of exported services, rules for determining the place of taxation, required documentation, and practical examples of tax treatment. Abdel Aal emphasized the Authority's dedication to improving communication with taxpayers to clarify tax obligations and foster stability in domestic and international transactions. The manual is accessible on the ETA website, with the English version available at the provided link.