Egypt’s 2025 VAT Law Amendment: Transforming Construction Taxation and Financial Dynamics

In June 2025, Egypt amended the VAT Law, replacing the 5% schedule tax on contracting and construction with a 14% standard VAT, except for places of worship.

This change restructures the financial and legal relationships among contractors, developers, clients, and the state treasury.

The previous fixed, non-deductible tax led to tax duplication and disconnection from the VAT system.

The amendment allows contractors to deduct input tax, provided conditions are met.

Advantages include reduced tax burden through input deduction, elimination of tax duplication, improved accounting discipline, and better cash flow management.

Source: eg.andersen.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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