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Food delivery subject to VAT in Egypt

Egypt’s tax authorities say that food sold online is now subject to VAT. Restaurant food deliveries are themselves also subject to VAT, the head of Egypt’s tax service said.

Any food business selling online is obliged to register for VAT if their annual turnover exceeds EGP 500 000. Note also that VAT applies at the standard rate of 14%.

Authorities say that VAT on online food sales and food delivery will create an even playing field across the industry. 

Pivoting to online food sales & delivery

In response to restaurant and retail closures related to Covid, Egypt permitted online food sales.

However, authorities expressed concern that a number of entities began selling online but have not registered with the Egyptian Tax Authority (ETA). 

The head of the ETA thus warned that any businesses with sales exceeding the EGP 500 000 threshold must register for VAT.

Egypt’s online retailers under the microscope

Tax officials in Egypt are monitoring online sales more broadly. Egypt’s tax authorities say they have referred for prosecution a number of businesses that are selling online without registering with the ETA.

Modernising VAT in Egypt

As part of a broader effort to enhance its VAT system, Egypt is rolling out e-invoicing to make compliance more efficient. Authorities say that e-invoicing minimises the administrative burden of VAT compliance and reduces the cost of transactions. 

Egypt’s e-invoicing rollout is following a phased approach. For instance, from 2022, applications for VAT refunds must be submitted electronically.

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