September 2022 / Focus Africa
The Egyptian Ministry of Finance (MoF) has introduced new VAT exemptions. Law No. 3 of 2022 amending the VAT Law (Law 67 of 2016) includes the following measures:
- exempting from VAT input supplies of goods and services to businesses established in special economic zones;
- defining the VAT treatment of digital transactions, the VAT obligations for non-resident persons conducting e-commerce transactions with Egypt-based clients and the simplification of their registration for VAT purposes; and
- establishing a VAT refund procedure for goods purchased by non-resident individuals staying in Egypt for a maximum period of 3 months. The minimum amount of purchase per invoice is EGP 1,500. All purchased goods must be exported with the non-resident individuals in order to benefit from the refund.
The amendments to the VAT Law also include an exemption from VAT for the following goods and services:
- manufactured foodstuffs;
- water purification, sanitation and desalination services;
- pharmaceutical products (and their inputs) and input supplies used for the production of paper;
- vaccines, blood and its derivatives, family planning tools, sewage services (charged to water bills); and
- international maritime transport services (not including tourist transport).
Law No. 3 of 2022 was published in the MoF official website and can be accessed here (in Arabic only).
The Egyptian Customs Authority (ECA) has extended the initial 2-month period for storage in port warehouses, the new authorized storage period is set to 4 months for the following goods:
- foodstuffs with expiry dates longer than 2 months; and
- foodstuffs with expiry dates longer than 4 months.
The measure takes effect from 29 August 2022 and is valid for 18 months from that date. In any case, it is not allowed to keep perishable or diminished goods deposited in temporary shops for a period longer than their condition allows.
The ECA has published Commissioner's Circular No. 65 of 2022 on its official website.
African Tax Administration Forum Agreement on Mutual Assistance in Tax Matters Becomes Operational in South Africa
The African Tax Administration Forum Agreement on Mutual Assistance in Tax Matters (the agreement) has been approved by the South African Parliament and became operational on 23 September 2022. The agreement was published in the South African government gazette No. 46959 of 23 September 2022.
The objective of the agreement is for the member states to assist one another in tax matters relating to:
- the exchange of information in tax matters;
- the carrying out of tax examinations abroad;
- the carrying out of simultaneous tax examinations; and
- assisting in the collection of taxes.
The agreement deals, amongst others, with the following:
- Taxes covered;
- Exchange of information;
- Tax examination abroad;
- Simultaneous examinations;
- Assistance in collection;
- Implementation legislation;
- Other international agreements or arrangements;
- Mutual agreement procedures;
- Notification of competent authorities;
- Ratification and entry into force; and
- Accession, signature and withdrawal.
For more information, see here. Further developments will be reported as they occur.
Note: The member countries of the African Tax Administration Forum (ATAF) are Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Chad, Comoros Islands, Côte d'Ivoire, Ivory Coast, Egypt, Eritrea, eSwatini, Gabon, The Gambia, Ghana, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Togo, Uganda, Zambia and Zimbabwe.