Egypt's Mandatory Commercial Books and Electronic Bookkeeping
Who must keep regular books? Since 29 July 2026 every Egyptian trading, industrial, craft or professional taxpayer must, whatever its turnover, unless under a simplified regime.
Executive summary
- Commerce Law No. 17 of 1999 obliges every trader whose capital invested in trade exceeds EGP 20,000 to keep books, in particular the journal and inventory books (article 21); every company is a trader, whatever its purpose (article 10).
- Unified Tax Procedures Law No. 206 of 2020 obliges every commercial, industrial, craft or professional taxpayer to keep these books regularly, manually or electronically (article 38). Since 29 July 2026 the duty no longer depends on turnover exceeding EGP 500,000 (Law No. 150 of 2026).
- A business under the simplified regime of Law No. 6 of 2025 (turnover up to EGP 20 million) is exempt from the tax law's books and keeps simplified records instead; the exemption does not extend to the Commerce Law.
- Retention is five years under both laws, from different starting points, and the Egyptian Tax Authority's (the ETA's) right to assess may outlive it (articles 38 and 44).
- Breach of article 38 carries a fine of EGP 20,000 to 100,000, and failure to retain the books a fine of up to EGP 50,000 (article 71); in an estimated assessment the burden of proof is on the taxpayer (article 40).
Who must keep books
Under the Commerce Law, a trader is anyone carrying on a commercial activity professionally, in their own name and for their own account, and every company in a legal company form "whatever purpose it was formed for" (article 10), so a consulting company is a trader. The law does not apply to small-craft owners (article 16). The duty falls on a trader whose capital invested in trade exceeds EGP 20,000 (article 21).
Under the Tax Procedures Law, Law No. 150 of 2026 replaced the first paragraph of article 38, in force from 29 July 2026, to read:
"Without prejudice to Law No. 6 of 2025 on certain tax incentives and facilitation for businesses whose annual turnover does not exceed EGP twenty million, and having regard to the Companies Law issued by Law No. 159 of 1981 on joint-stock, partnership-limited-by-shares, limited-liability and single-person companies, every taxpayer carrying on a commercial, industrial, craft or professional activity must keep the regular accounting records and books prescribed by the Commerce Law issued by Law No. 17 of 1999, manually or electronically." (article 38, first paragraph)
| Original text (2020) | Replaced text (from 29 July 2026) | |
|---|---|---|
| Who is bound | Whoever's annual turnover exceeds EGP 500,000 | Every taxpayer, regardless of turnover |
| Exception | — | Businesses under Law No. 6 of 2025 |
Electronic record-keeping has been permitted since 2020, unchanged, as has the second paragraph's duty on every taxpayer to keep "electronic accounts showing annual revenues and costs", regulated by ministerial decree; what is new is the removal of the turnover threshold. The rest of Law No. 150 of 2026 is in its own bulletin.
The simplified regime is optional, for a business with up to EGP 20 million annual turnover that applies to use it (article 1, Law No. 6 of 2025). It is exempt from the tax law's books and keeps simplified records instead (article 13), listed in article 3 of Minister of Finance Decision No. 420 of 2025: a fixed-asset register, a raw-material stock register, a sales journal, a purchases journal, a tax summary book, and the electronic invoice or receipt, on paper or electronically. Its Commerce Law duty is unaffected.
Regard to the Companies Law 159 of 1981 applies the general meeting minute book's authentication rules to a joint-stock company's accounting books (article 75): numbered pages stamped by the Real Estate Publicity Authority before use, and retention of supporting documents.
The required books and electronic record-keeping
The Commerce Law names two books. The journal records transactions day by day and the trader's personal drawings as a monthly total; detail may go in subsidiary journals whose totals are entered in the journal at regular intervals, failing which each subsidiary journal counts as an original book (article 22). The inventory book records goods on hand at the year end and a copy of the balance sheet and profit-and-loss account (article 23). Both must be free of erasure, page-numbered, signed and stamped by the commercial register before use and submitted to it annually for certification (article 25).
The executive regulations (Decision No. 286 of 2021) list the books recording transactions as they occur (article 45): the general journal and ledger and their subsidiaries, the inventory book, an item book for wholesalers, an exports book, and supporting documents — "complete, reliable and formally regular", to determine taxable net profit. An individual carrying on a professional or craft activity keeps revenue, expense and receipt books instead, for which computer data meeting conditions set by ministerial decree may substitute (article 46).
Retention period
| Basis | What is retained | Period and start |
|---|---|---|
| Commerce Law, article 26 | Commercial books and their supporting documents | 5 years from the register's endorsement that the book is full or closed |
| Tax Procedures Law, art. 38 | Records, books and copies of invoices | 5 years following the tax period returned |
| Tax Procedures Law, art. 44 | The ETA's right to assess or amend | 5 years from the return's filing deadline |
The ETA's limitation period is interrupted by notice of an assessment, a demand for payment, or referral to the appeal committees (article 44).
The consequence of not keeping books, or keeping them irregularly
Fines. Breach of article 38's first three paragraphs: EGP 20,000 to 100,000; failure to retain the paper or electronic books and records for the required period: up to EGP 50,000 (article 71). Breach of the Commerce Law's books chapter: EGP 100 to 1,000 (article 29).
The return. The ETA bears the burden of proving its grounds for correcting, amending or disregarding a return filed in accordance with the law's conditions (article 39), by reasoned notice to the taxpayer (article 48 of the regulations). Absent a return, or where a ground to disregard it exists, the ETA assesses tax from the information available to it (article 50 of the regulations); in that estimated assessment the burden of proof is on the taxpayer (article 40), and regular books are its means of proof.
Regularity controls in an ERP system
In practice, an ERP system meets the article 45 standard through these controls:
- Entries posted from source documents as transactions occur, never deleted after posting but corrected by a reversing entry; sequential numbering with no gaps; every change logged under its user and date.
- The general journal, general ledger and subsidiary ledgers extractable and consistent for any date, and a physical count at year end recorded in the system and used to adjust stock and asset balances.
- Monthly reconciliation with the electronic invoice and receipt systems, keeping a copy of every invoice issued, sequentially numbered and free of erasure (article 37).
- Data that stays readable for the whole retention period, producible within fifteen days of a written request (article 41).
What this requires
- Reassessing the position now the EGP 500,000 threshold has gone: regular books, or the simplified regime for those who qualify.
- Matching the set of books to article 45 of the regulations, and article 75 for joint-stock companies.
- Configuring the accounting system: no deletion of posted entries, sequential numbering and a change log.
- A retention policy running until the ETA's right lapses for each year, on an archive that stays readable after any system change.
The firm's Accounting & Bookkeeping Department keeps clients' books and checks their regularity, manual or electronic, and configures the accounting system to meet the regularity conditions and retention periods.
Mahmoud Nassef — Chartered Accountant (Egyptian Register), Founder Partner
Member, Egyptian Society of Accountants & Auditors
Member, Egyptian Tax Society
Member, Egyptian Society for Public Finance and Taxation
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Disclaimer: This bulletin is prepared for general information on the legislation in force at the date of its publication. It does not constitute a professional opinion or tax or legal advice on any particular matter, and it should not be relied upon in place of advice based on an examination of the circumstances of each case. Nassef & Partners International accepts no responsibility for any action taken, or refrained from, in reliance on its contents. The positions stated remain subject to subsequent legislation and decisions.