Rasha Abdel Aal, Chairperson of the Egyptian Tax Authority, announced the release of a comprehensive explanatory guide on the tax treatment of contracting and construction services under Law No. 157 of 2025. The guide aims to boost tax awareness in the contracting sector—a key pillar of Egypt's economy—by simplifying tax concepts and procedures. It is available for viewing and download on the ETA's official website.
The guide offers detailed explanations of tax obligations for both main and subcontractors, outlines the process for issuing and submitting electronic invoices and receipts, and clarifies the correct method for calculating Value Added Tax (VAT) at the standard rate on the total invoice or e-receipt value. It is designed to ensure full legal compliance and promote voluntary tax adherence.
It also explains handling contracts concluded before and after the law's implementation, the tax treatment of inventory, and mechanisms for deductions, additions, and advance payments. The guide covers tax procedures applicable to government entities, local administration units, and public authorities when dealing with direct supplies to the tax authority, which are subject to a 20% withholding rate on VAT due for invoices issued under such contracts.
To support practical understanding, it includes a section of frequently asked questions and numerical examples demonstrating VAT calculations on e-invoices. These are intended to assist taxpayers, accountants, and consultancy firms in applying the law accurately and efficiently. Abdel Aal stated that this publication is part of the ETA's ongoing efforts to unify tax concepts and provide accessible advisory resources, in line with Minister of Finance Ahmed Kouchouk's directives to streamline and modernize tax procedures. The authority prioritizes proactive awareness campaigns before implementing new regulations to ensure transparency and readiness.
The release reflects the ETA's commitment to transparency, clarity, and continuous engagement with the tax community. It will continue issuing similar reference guides for other sectors to support a simplified tax system and foster voluntary compliance.