Laws enacted in Egypt on 28 July 2026 contain a legislative package designed to simplify the tax system and reduce taxpayers’ administrative costs and compliance burdens. As part of this package, which applies as from 29 July, various changes are made to the VAT rules, including the following:
Businesses operating in Egypt should assess how the revised rates, exemptions and refund rules affect their VAT positions, contracts and compliance processes. Early review can help identify refund opportunities and reduce the risk of applying outdated VAT treatment.
Mostafa Makram
BDO in Egypt
- The 5% reduced VAT rate applies to machinery and medical equipment used in the production of goods. VAT may be suspended for one year (and extended in certain circumstances) if the medical devices are used in industrial production.
- A VAT credit balance may be refunded after four consecutive tax periods (down from six months).
- Natural gas is removed from the exemption list and is now subject to VAT at a rate of EGP 20 per thousand cubic feet.
- The leasing of headquarters premises is subject to tax at the standard 14% rate, rather than being exempt.
- Financial services provided by the National Postal Authority are exempt from VAT, and this exemption now covers non-banking financial services under the supervisory authority of the Central Bank.
BDO Perspective
Businesses operating in Egypt should assess how the revised rates, exemptions and refund rules affect their VAT positions, contracts and compliance processes. Early review can help identify refund opportunities and reduce the risk of applying outdated VAT treatment.Mostafa Makram
BDO in Egypt