Minister of Finance Ahmed Kouchouk has issued two ministerial decrees introducing new facilitation measures for taxpayers under the Value Added Tax (VAT) system, reinforcing the government’s path toward trust, partnership, and tax certainty with the business community.

 

The first decree amends certain provisions of the Executive Regulations of the VAT Law, while the second decree establishes the accounting basis for assessing VAT on contracting and construction agreements that were concluded and invoiced (via approved consultant certificates, e-invoices, or e-receipts) before the enforcement of Law No. 157 of 2025, and continue to be executed thereafter.

 

Rasha Abdel Aal, Head of the Egyptian Tax Authority, explained that the facilitation measures include broadening the definition of indirect inputs to cover indirect costs incurred by taxpayers related to the sale of taxable goods or services. These now include financial and construction costs, in addition to indirect production and operational costs, sales and distribution expenses, and general and administrative overheads — effectively allowing deduction of VAT on financial and construction input costs.

 

She added that the new amendments also extend the suspension period for VAT payments on disassembled production lines, whether purchased locally or imported as split shipments. The suspension period will now start from the purchase date of the last locally sourced component or the customs release date of the final shipment.

 

Abdel Aal further noted that a new accounting framework has been established for assessing VAT on contracting and construction projects that were contracted before July 18, 2025, the date on which Law No. 157 of 2025 — introducing the latest VAT amendments — came into force, but are still under execution after that date.

 

These measures, she emphasized, reflect the Ministry of Finance’s commitment to simplifying compliance, promoting fairness, and strengthening investor confidence within Egypt’s evolving tax system.