Egyptian authorities have initiated official procedures to collect taxes on profit-oriented electronic activities, particularly concerning marketing companies and content creators known as "bloggers and YouTubers." This comes after numerous demands and significant public debate surrounding the substantial earnings of bloggers through social media platforms.
On Saturday, Head of the Egyptian Tax Authority, Reda Abdel Kader, stated that the Ministry of Finance is making every effort to achieve tax justice by accurately identifying the tax community, especially regarding transactions conducted through electronic platforms, in order to include the informal economy in the official system and to uphold the rights of the state treasury.
He highlighted the role of the e-commerce unit in the authority in tracking, monitoring, and registering companies that conduct business through websites. Abdel Kader noted that e-commerce is a modern form of marketing and selling that has been propelled by changes in communication technology, and its reliance has expanded globally unprecedentedly due to the COVID-19 pandemic.
Abdel Kader explained that there are three types of companies engaging in e-commerce: the first type considers e-commerce merely a means of selling or distribution; the second type consists of companies created primarily for selling and distributing their products and services through electronic means; while the third type includes companies that operate as digital platforms for showcasing sellers' products and facilitating comparison for buyers.
Regarding the tax status of companies engaged in e-commerce, Abdel Kader clarified that all companies conducting commercial or non-commercial activities (freelance professions) are subject to income tax according to the law and must register and declare their revenues from the start date of their activities.
Regarding value-added tax (VAT), he mentioned that according to VAT law, companies selling general goods or providing general services with an annual turnover of 500,000 Egyptian pounds must register for VAT and collect and remit VAT to the relevant authority. He noted that individuals and companies providing professional and consultancy services must register from the start date of their activities, collecting and remitting VAT at a rate of 10%. Additionally, companies engaged in selling goods or providing services as listed in the VAT schedule must register from the start date of their activities and collect and remit VAT corresponding to the sold goods or provided services as stipulated by law.
The Head of the Egyptian Tax Authority added that individuals engaged in content creation (bloggers and YouTubers) should approach the tax authority to open a tax file for income tax at the relevant income office, as well as register with the relevant VAT office if their revenues reach 500,000 Egyptian pounds within 12 months of starting their activities.
Abdel Kader encouraged anyone with inquiries regarding e-commerce to contact the Integrated Communications Center or visit the e-commerce unit at the Egyptian Tax Authority's headquarters.
