Egypt Business-to-Business Electronic invoicing
Is e-invoicing mandatory in Egypt?
E-invoicing in Egypt has become mandatory for a list of companies.
The Egyptian Tax Authority (ETA) is obliging 134 large businesses to submit electronic invoices to the online portal of ETA as of 15 November 2020. ETA is responsible for the setup and control of the e-invoicing clearance system. It defines e-invoice as a digital document proving transactions of sale of goods and provision of services.
The e-invoicing obligation for Egyptian companies will gradually extend to other taxpayers after January 2021. It is part of the government’s plan for full digitalization of its services.
Four main properties of e-invoices listed by ETA:
1) They have specific components and characteristics,
2) They are prepared and signed electronically,
3) They are sent and received by the taxpayer through the system, and
4) They are reviewed and verified by the tax authority,
This means ETA will first validate and approve the supplier invoices before they are sent to the customers.
How does the new e-invoicing system in Egypt work?
Companies compelled to use the new electronic invoicing system in Egypt will be required to register with the system by contacting ETA. After successful registration, the client information will be provided to transmit invoices and receipts in XML or JSON data format. The system will allow cancellation and rejection of invoices that have been issued incorrectly. Information such as tax identification number, national ID number, name, and domicile of the vendor are required in the purchase invoice. VAT declaration will be automatically filled via invoices.
Each invoice is digitally signed by a HSM (hardware security model) device and receives a unique ID to ensure data security of the transactions between companies. Separate schemes exist for credit note and debit note. Credit and debit notes have to include reference to the original document by providing its unique ID.
For the products supplied, companies will have to use the GS1 coding or an internal coding system linked to the Global Product Classification standards. The barcodes are used to provide standardized product coding for international business communication.
How to implement e-invoicing in ERP system?
Egyptian tax authorities have published an overview of the steps to integrate the taxpayers’ ERP system with the electronic invoicing system.
- Registering digital profile
- Inviting other representatives and registering system
- Getting system credentials for API access during system registration
- Getting and registering eSeal certificate from one of the official Certification Service Providers in Egypt
- Logging in (getting access token)
- Calling system APIs (e.g., to submit documents, retrieve documents, change status)
- (optional) Receiving callbacks on events related to taxpayer