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