Value Added Tax in Egypt.. How will technology companies be held accountable?

Google’s message to its users revealed that the value-added tax (VAT) will be applied to its electronic services in Egypt at a rate of 14%, as of the first of next July.

Egypt intends to apply value-added tax to companies that provide advertising and marketing services.

The companies that will be subject to this tax include “Google”, “Facebook”, “YouTube”, “Netflix” and “Tik Tok”, as well as electronic sales platforms.

Commenting on the imposition of this tax, the executive partner of BDO Khaled and Partners, Muhannad Khaled, said that Egyptian taxes apply what was stipulated in the value-added tax law, explaining that there is no new amendment to the law.

Khaled added, in an interview with Al-Arabiya, that the law requires companies or consumers in Egypt who use a service from abroad to apply value-added tax in various forms.

He pointed out that this procedure includes the category that is not registered for taxation in Egypt, such as people, such as the services provided by Google in terms of improving the site or content services, movies, music and subscriptions.

He said, “The difference here is that this unregistered category will be included to be subject to taxes in Egypt, and the services that are provided include software licenses, website creation, content, films, and music, and there is a system called the reverse commissioning mechanism.”

He pointed out that some large companies such as “Google” and similar companies have been identified, and they will be obligated when dealing with any persons to impose a value-added tax, and these companies will disclose the services they provide to Egyptian consumers, because it is a tax that falls primarily on the consumer.

“There are many small companies in the world that we will start counting over time, and information may be exchanged with tax authorities in other countries to find out about small companies that provide similar services,” according to Khaled.

Regarding the taxes on content makers, Khaled said that they are included in the income tax, which is already applied.

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