VAT registration in Egypt: the threshold, the deadline, the penalty

Executive summary

• The mandatory registration threshold is EGP 500,000 of taxable and exempt sales together, within the fiscal year or part of it, with 30 days to apply once it is reached (article 16 of Law 67 of 2016).
• An importer of taxable goods or services for trading purposes, an exporter, a distribution agent, and a producer or importer of Schedule goods register regardless of turnover.
• A person who misses the deadline is registered by the tax office on its own initiative, without prejudice to criminal liability — missing the deadline is tax evasion, punished by 3 to 5 years' imprisonment and/or a fine of EGP 5,000 to 50,000.
• A non-resident supplier selling to unregistered persons in Egypt without a permanent establishment registers under the simplified supplier registration system, through the ETA's electronic portal.
• Voluntary registration is open to a business below the threshold, on conditions that include a minimum turnover or paid-up capital, and it cannot ask to deregister for 24 months.
• Enterprises under Law 6 of 2025 (annual turnover not exceeding EGP 20 million) file VAT returns quarterly rather than monthly.

The mandatory threshold and how it is measured

Article 16 of VAT Law No. 67 of 2016 requires a person selling taxable goods or services to register with the Egyptian Tax Authority (the ETA) once its taxable and exempt sales together reach EGP 500,000 within a fiscal year or part of it:

"A person whose sales reach that amount [EGP 500,000] after this Law takes effect, in any fiscal year or part of it, must apply to the Authority to register" — article 16.

The obligation does not apply to a natural person who does not otherwise carry on the business of selling goods or performing services, even if an occasional disposal reaches the threshold. The Minister may amend the threshold by decision.

Who must register regardless of turnover

Registration is mandatory regardless of sales volume for every importer for trading purposes, exporter and distribution agent of a taxable good or service (article 16; article 18 of the regulations), and for every producer, provider or importer of a good or service listed in the Schedule annexed to the Law, which article 1 defines as a "taxable person" whatever the volume of its transactions. The registration rules do not apply to anyone — producer, importer, service provider or trader — whose activity is confined to exempt goods or services, nor to a trader confined to goods and services subject to Schedule tax only (article 20 of the regulations).

The consequence of missing the deadline

A business that reaches the threshold and does not apply is registered by the tax office on its own initiative, from whatever data it holds, with notice within 5 working days, without prejudice to criminal liability (third paragraph of article 25 of the Unified Tax Procedures Law No. 206 of 2020, which repealed the third and fourth paragraphs of VAT Law article 16 that had governed notice of registration and registration by operation of law).

Missing the registration deadline is tax evasion under item (1) of article 68 of Law 67 of 2016, an item Law 206 of 2020 left in force. Evasion is punished by 3 to 5 years' imprisonment and a fine of EGP 5,000 to 50,000, or either penalty; the offenders are ordered, jointly, to pay the tax and the additional tax; the penalty is doubled on a repeat offence within 3 years; the case is heard urgently; and the offence is a crime involving moral turpitude (article 67).

A business below the threshold must still register on the ETA's electronic system, against an annual fee the Minister sets, capped at EGP 500, which stops being collected once the threshold is reached (fourth paragraph of article 25 of Law 206 of 2020). The provision calls these businesses "non-taxable persons", so this registration does not oblige them to charge or declare VAT before they reach the threshold.

Non-resident suppliers

A non-resident, unregistered supplier selling taxable goods or services to an unregistered person in Egypt, with no permanent establishment here, registers under the simplified supplier registration system, through the ETA's dedicated electronic portal (article 17 as replaced by Law 3 of 2022; article 21 of the regulations as replaced by Minister of Finance Decree 24 of 2023), and one that does not apply is treated as registered from the date its sales reach the registration threshold (item 5 of article 21). A legal person that sells no taxable goods or services but must account for VAT on imported services must register for the purposes of the reverse-charge scheme. The two periods the law set for these rules to apply, counted from the start of the system in 2023, have run: six months for services, and at most two years for goods.

Voluntary registration and deregistration

A business below the threshold may register voluntarily (article 18), provided its turnover over the 12 months preceding the application is not below EGP 150,000, or its paid-up capital not below EGP 50,000, that it has a fixed place of business, and holds a valid tax card (article 22 of the regulations). It may not ask to deregister before 24 months from registration, unless it has already permanently ceased the activity and proves this to the ETA.

The Head of the ETA may cancel a registration where the registrant has lost a condition of registration, on the request of a registrant under article 18, where registration was contrary to the facts, or on cessation of the activity — in that last case, from the last day of the tax period in which activity ceased (article 21 of the Law, article 25 of the regulations).

Enterprises under Law 6 of 2025

An enterprise with annual turnover not exceeding EGP 20 million that applies to benefit from Law 6 of 2025 follows the same registration rules above, but files its VAT return quarterly, not monthly, and its returns — income tax and VAT alike — are examined after five years have passed from the date it applied to benefit (article 12).

What this requires

• Measure the threshold on taxable and exempt sales together, not the taxable ones alone.
• Apply within 30 days of reaching the threshold, rather than waiting for the fiscal year-end.
• Apply within 30 days of starting the activity, without waiting for any threshold, where registration is required regardless of turnover.
• Register a legal person that accounts for VAT on imported services under the reverse charge, even with no taxable sales.
• Do not seek to cancel a voluntary registration before 24 months unless the activity has permanently ceased and this is proved.
• Notify any change in registration data within 30 days of it (article 28 of Law 206 of 2020).
• Review the position of a lessor of non-residential buildings and units used as an independent seat for managing an activity: that lease left the exemption under Law 149 of 2026 (item 28 of the list of exempt goods and services), save for specified activities, so the lessor must register once its sales reach the threshold — detailed in VAT on commercial leases under Law 149 of 2026.

The firm's Tax Department reviews a business's position against the registration threshold, prepares its registration, amendment and deregistration applications, and tracks their deadlines.

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.