Egypt Amended VAT Law: What Businesses Need to Know

Egypt’s amended VAT Law expands the tax base by removing key exemptions and revising rates. Affected sectors must adapt to new compliance and cost structures.

On July 17, 2025, Egypt’s Ministry of Finance announced the issuance of Law No. 157 of 2025 (hereinafter, the “VAT Law”), introducing significant amendments to the country’s value added tax (VAT) framework.  

The amended VAT Law, which came into effect on July 18, 2025, reflects the government’s continued efforts to streamline its tax regime, broaden the VAT base, and align its fiscal policies with evolving economic priorities.  

The amendments revise both the list of VAT-exempt items and the rates applicable to certain goods and services, impacting a range of sectors including energy, media, real estate, and construction. As Egypt pursues greater efficiency in tax collection and public revenue management, businesses operating in the affected industries will need to promptly assess the implications of the updated rules on their operations and compliance obligations. 

Also read: Egypt Introduces Targeted VAT Amendments to Broaden Tax Base

Overview of Egypt’s amended VAT Law 

Egypt’s amended VAT Law introduces targeted changes to the country’s system with the aim of enhancing tax efficiency, increasing revenue mobilization, and reducing distortions across economic sectors.

The updated legislation revises key provisions of the original VAT law by narrowing the scope of exemptions and recalibrating applicable tax rates on selected goods and services. These changes are part of a broader fiscal strategy aimed at expanding the country’s tax base, ensuring a more equitable application of indirect taxation, and aligning VAT policy with Egypt’s medium-term budgetary objectives. 

Nullified VAT exemptions 

One of the most consequential aspects of Egypt’s amended VAT Law is the removal of VAT exemptions that previously applied to several key sectors. These changes are expected to broaden the VAT base and generate additional revenue while shifting certain fiscal burdens onto industries that had benefitted from preferential treatment: 

• Crude oil is now subject to a 10 percent schedule VAT, ending its previous exemption. This change may increase operational costs in the energy sector and impact fuel pricing. 

• News agency services are now taxed at the standard 14 percent VAT rate. The move could raise costs for media outlets, especially those dependent on syndicated content. 

• Advertisement services are also generally taxed at 14 percent. An exception applies to ads related to donations for public medical care, which remain VAT-exempt. This preserves tax relief for charitable and healthcare-related campaigns while taxing most commercial ads. 

New and amended VAT rates 

In addition to removing exemptions, the Egypt’s amended VAT law introduces updated VAT rates and clarifies the taxation of specific activities, particularly in the real estate and construction sectors: 

Trademarks associated with managerial units, often referred to as the commercial components of premises, are now subject to a schedule tax rate of 10 percent. However, the taxable base is defined as 10 percent of the rental or sale value, resulting in an effective VAT burden of just one percent. This provision appears designed to formalize the taxation of intangible real estate assets while minimizing the financial impact on property transactions. The change may encourage greater compliance in the property sector without significantly discouraging activity. 

Building and construction services, including supply and installation contracts, are now explicitly subject to the standard 14 percent VAT rate. This amendment brings clarity to a sector that has often operated in a grey area with regard to indirect tax treatment. Developers, contractors, and clients alike will need to adjust pricing structures and contract terms to account for the new tax obligations. The change may also have a ripple effect on infrastructure projects and housing development costs, especially in large-scale public-private partnerships. 

Implications for businesses and sectors 

The VAT amendments affect a range of industries, including energy, media, real estate, healthcare, and construction. For the energy sector, the new tax on crude oil may raise operating costs and influence downstream pricing. Media and advertising firms face higher service costs, with smaller outlets likely to be more sensitive to the added burden. 

In real estate, the taxation of managerial unit trademarks introduces a minor but new obligation, while construction companies must now factor VAT into supply and installation contracts, potentially affecting project pricing. Although advertising related to public healthcare remains exempt, most commercial activities are now taxable. 

Businesses will need to update their tax compliance systems and review contractual terms to reflect the new obligations. The changes are expected to boost government revenue, though they may also contribute to modest price increases for end consumers. 

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