The Ministry of Finance issued the executive regulations of the value-added tax (VAT) law yesterday, and the Deputy Finance Minister, Amr El Monayer, said the ministry will issue more guidance to add further clarification on how certain specific sectors will be treated under the VAT regime. A tax refund is granted on exported goods and services - regardless of the degree of processing, additional taxes and credit due to taxpayers that was retained for six or more periods, capital goods used in producing goods and services that are subject to VAT as long as the initial VAT is not expensed. Contracts signed before implementing VAT for goods and services that were provided in a time period before and after implementing the VAT law have to be amended to include the VAT on the portion of the contract deliver after the law came into effect. Taxpayers are also allowed to deduct VAT paid on production inputs. These deductions are also applicable to VAT-exempt tax agreements with other sectors including international organization, oil and gas and mining agreements, and for diplomatic missions as well, as long as the treatment is reciprocal. Tax rebates will be processed in a maximum of 45 days. The regulations outline how VAT is calculated for used goods, sales on installments, and bartering. VAT exemptions list includes: financial transactions between subsidiaries and parent companies; stock market transactions; work done by companies’ rep offices abroad; and business turning over less than EGP500k p.a.
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