Recently, the Egyptian government has announced the introduction of B2G electronic invoicing in the country. Eventually, the Tax Authority has set a starting date, November 15, 2020, to obligatorily issue electronic invoices for a group of 134 companies.
The decision coming from the Finance Minister, Dr Mohamed Moait, aims to accelerate the digital transformation in the country, as part of a long term strategy called Egypt Vision 2030. Furthermore, it also expects to improve the financial and tax services and contribute to the mitigation of tax evasion in the country.
Which companies are affected?
The use of B2G electronic invoicing will come into force for certain companies in this first stage, the majority being big companies operating in Egypt. Among the 134 companies, there are well-known enterprises such as Adidas, Huawei, Samsung, Procter and Gamble, Nestle, Philips or LG.
All of these companies will have to adapt their systems to start issuing electronic invoicing to the Tax Authorities from November 15th.
Electronic invoicing requirements
The B2G electronic invoicing will follow the clearance model, as in Italy. This model requires the previous authorization of the Tax Authority to issue invoices to clients. Thereby, authorities obtain real-time information about the taxpayers’ invoicing.
The required format for invoices is JSON or XML. Furthermore, invoices will have to include a digital signature using a physical security device HSM (Hardware Security Model). This device guarantees that crucial cryptographic data (such as keys) are not stored online in the cloud, but inside the HSM to be more secured.
The structure of an electronic invoice
The electronic invoice includes the standard information fields, such as the information about the seller and the buyer, amounts, etc. However, it also has to specify the information about products or articles delivered, which will have to be in line with the GPC (the Global Products Classification) that defines the Global Standards 1 organization (GS1).
Taxpayers will have to map its internal product codes used in the ERP with the GPC and will have to inform the authorities in a maximum of 15 days before using the new code.
You can check all technical requirements to structure the content of electronic invoices here.
The B2G electronic invoicing system is one of the most important projects of digital transformation in the country. After the implementation, Egypt will be on the same level of other developed countries in terms of intern tax management and electronic invoicing.
This first implementation is thought to be a pilot project for the future implementation to all taxpayers.