The Egyptian Tax Authority (ETA), chaired by Rasha Abdel Aal, has issued a comprehensive explanatory guide detailing the tax treatment of contracting and construction services under the provisions of Law No. 157 of 2025.
According to Abdel Aal, the new guide aims to enhance tax awareness across the contracting sector—one of the main pillars of Egypt’s national economy—by simplifying tax concepts and procedures for all stakeholders.
Available on the ETA’s official website, the guide provides in-depth explanations of tax obligations for both main and subcontractors. It outlines the correct procedures for issuing and submitting electronic invoices and receipts, clarifies the application of Value Added Tax (VAT) at the standard rate, and illustrates how VAT should be calculated on the total invoice or e-receipt value. The publication is designed to promote legal compliance and voluntary tax adherence within the sector.
The ETA Chairperson further explained that the guide covers the tax treatment of contracts concluded before and after the implementation of the new law, along with provisions relating to inventory, deductions, additions, and advance payments. It also clarifies procedures applicable to government entities, local administration units, and public authorities, particularly for direct supplies to the tax authority. Under these contracts, a 20% VAT withholding rate is applied on invoices issued.
To facilitate practical understanding, the guide includes a section of frequently asked questions (FAQs) and numerical examples demonstrating VAT calculations on e-invoices. These examples are intended to help taxpayers, accountants, and consultancy firms apply the law accurately and efficiently.
Abdel Aal emphasized that this initiative is part of the ETA’s broader efforts to unify tax concepts and offer accessible advisory resources, in line with the directives of Minister of Finance Ahmed Kouchouk to modernize and streamline tax procedures. She highlighted that the authority prioritizes proactive awareness campaigns before implementing new regulations, ensuring transparency and preparedness among all stakeholders.
She reaffirmed that the issuance of this guide reflects the ETA’s commitment to clarity, transparency, and continuous engagement with the tax community. The ETA also plans to release similar sector-specific guides to further simplify the tax system and encourage voluntary compliance across all industries.
