Egypt Clarifies VAT Treatment of Labor Supply Services
- Egypt’s Ministry of Finance has issued Ministerial Decision No. 515 of 2025, which defines the VAT treatment for labor supply services provided by contracting and staffing companies, confirming that these services are subject to VAT.
- The decision specifies that VAT is applicable only to the service fee component—the net consideration for labor provided—while reimbursable expenses and employment-related operational costs are excluded from the taxable amount, as long as they are allowable cost deductions under the VAT Law.
- Excluded costs include salaries, wages, allowances, overtime, medical treatment, and transportation and accommodation expenses necessary for project execution, ensuring clarity for businesses regarding their VAT obligations in labor supply arrangements.
Source Orbitax
- Egypt has issued clarification on the VAT treatment of manpower supply services.
- Manpower supply services are subject to VAT at the standard rate.
- The clarification aims to ensure consistent tax application and compliance.
- Businesses providing or receiving such services must adhere to the updated VAT guidelines.
Source: research.ibfd.org
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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