The vast majority of entrepreneurs turn to e-commerce to launch their entrepreneurial projects. It gives them independence and quick profit at the same time, but they find it difficult to know and understand matters related to the tax aspect, and how to calculate... Sales taxes for online stores in EgyptMost of them lack sufficient knowledge of the tax system imposed on sales and how it works in relation to their e-stores.
If you are interested in launching an online store in Egypt, this article is for you. You will find what you are looking for about everything you need to know about the Egyptian tax system that will be applied to the sales of your free online store, and how to calculate these taxes on your sales in detail.
Are your online store sales in Egypt subject to the tax system?
The increase in electronic commercial activity and the increase in the volume of investments in electronic stores in the Egyptian market, especially after the Corona pandemic, led to the emergence of a complete free commercial sector that is not subject to any tax system. This prompted the Egyptian Tax Authority to ask the owners of these stores to open their tax files in order to give legal legitimacy to their commercial activity inside Egypt.
That is, your online store sales in Egypt are subject to the tax system, most notably value-added tax and income tax
See also: Steps to create a free online store in Egypt
How to calculate sales taxes for online stores in Egypt?
The Egyptian Tax Authority merged the formal economic sector with the informal sectors with the aim of unifying the applied tax system and achieving the principle of tax justice among all sectors. For this purpose, it established a unit specialized in e-commerce
It is important, first of all, to become familiar with the concept of e-commerce taxes, which means the taxes imposed by the Egyptian government on all online commercial activities to count the number of workers in this field, and to determine the value of the amounts they must pay annually.
Tax reports in Egypt are divided into three types:
- Annual revenue value
- Costs and expenses
- Net profit
It counts Taxes on online store sales in Egypt According to annual net profits, not annual revenues, note that The value of the tax imposed is fully borne by the store owner, While that Value added tax is borne by the consumer by imposing it on some goods and services at a rate of 14% It is calculated according to the following equation:
Value added tax = price of the final product x 14%.
See also: How to calculate sales taxes in Egypt in detail (laws and regulations)
The importance of calculating taxes on your online store sales in Egypt
When you understand the concept of taxes and how to calculate these taxes imposed on your online store’s sales in Egypt, this will bring you a number of benefits:
- Creating job opportunities and attracting new consumers
- Eliminate unfair competition
- Protection against fraud, deception and electronic fraud.
See also: The comprehensive guide to creating a free online store in Egypt
How can I legally reduce taxes on my online store in Egypt?
Many e-store owners seek to reduce the taxes imposed on their sales, and in this paragraph we suggest to you the 3 most important cases that will help you reduce what you have to pay on your e-store sales.
- · Owning an e-commerce business with a volume of less than 500 thousand Egyptian pounds.
- · Institutions with non-banking financial services monitored by the Financial Supervision Authority.
- · Institutions working in the field of building and operating houses of worship, educational and training services and scientific research, free services broadcast on radio and television, or library services provided by public libraries.
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After learning about the Egyptian tax system for online stores, do you still have any obstacles regarding designing an online store in Egypt? Answer us in the comments.
