Electronic Invoice
Electronic Invoice
The Egyptian Tax Authority (ETA) and the Ministry of Finance (MoF) worked together to update the software they use to handle and process tax data. The electronic invoice is considered one of the most crucial aspects of this total transformation.
What is the Electronic Invoice?
An electronic invoice is a system that uses modern technological tools to process procedures regarding invoice issuing, whether paper or manual, and convert them into electronic digital copies to provide speed and accuracy in exchanging data and tax information, increasing efficiency and minimizing error handling, and keeping commercial records between companies, exporters, and importers.
It is worth noting that the electronic invoice aims at providing a single solution enabling ETA to collect tax payments electronically and track all business-to-business transactions (B2B) via the direct transmission of invoice data in digital format.
Note:
Not all digital invoices are electronic invoices, such as:
- PDF invoices, which are delivered as attachments in emails. Since PDF invoices are not supplied in a structured manner, they cannot be processed automatically.
- Paper invoices even if they are converted to digital format, since they were not issued electronically in the first place.
Stages of Applying the Electronic Invoice to Financiers
The implementation of the electronic invoice system has been divided into several stages:
1st Stage
It included approximately 134 major financiers starting mid-November 2020 following Resolution 386 of 2020.
2nd Stage
It included 347 major financiers starting mid-February 2021 following Resolution 518 of 2020.
3rd Stage
It included all remaining major financiers starting mid-May 2021 following Resolution 85 of 2021.
4th Stage
It included all Mediterranean financiers in Cairo Governorate starting mid-September 2021 following Resolution 195 of 2021.
5th Stage
It included 3737 investment companies and joint-stock companies in the Cairo region that complied with the resolution from mid-December following Resolution 443 of 2021.
6th Stage
It included joint-stock and investment companies starting mid-February 2022 following Resolution 619 of 2022.
Conditions Required for the Electronic Invoice Issuance
ETA has set several conditions for accepting electronic invoices, including:
- The financier is obliged to make a tax invoice for every good or service it provides.
- The financier should keep the original invoice and provide a copy of the invoice to the buyer of the item.
- The financier retains the principal of the invoices he releases for five consecutive years.
- The financier is obliged to record the data of that invoice in his tax file.
- Data must be recorded on the electronic invoice, such as serial number, date of editing, buyer’s name, number, address, item category, and data.
- The tax service’s category must be registered, and the value tax due must be indicated.
What are the Benefits of the Electronic Invoice Program?
There are many benefits for the electronic invoice program, including:
- Facilitating the automation of time-consuming and error-prone procedures like data input, matching, and approvals, freeing up employees for more worthwhile projects.
- Eliminating paperwork and manual chores may reduce your day’s sales, particularly by several days.
- Securing file transmission, digital signatures, and secure networks.
- Enabling you to access and analyze line-level data, helping you expand your company by making more informed financial and procurement choices.
- Guaranteeing that your ERP system receives only transactional data. Fewer
- Recording transaction history and the whole document route saves you time by eliminating the need to track them manually.
- Reducing paper use and CO2 emissions, decreasing operational expenses, increasing profitability, and establishing a trustworthy brand image.
How to Register for an Electronic Invoice?
You can register an electronic invoice by:
- Emailing the ETA where you apply to create an electronic file, attaching the following:
- A copy of the identity of the authorized person.
- A copy of the tax registration card and tax card.
- A copy of a letter of authorization from the company for a legal representative.
- Personal email and phone number.
- Obtaining your electronic signature through one of the companies authorized to do so.
- In case the financier does not use any ERP program and the number of invoices does not exceed 200 invoices, the financier submits a request to the head of the tax commission to issue invoices, and then the department sends a representative to ensure that the program does not exist and the number of invoices. In case of any change, the delegate or the authority will be notified or offered to the financier for legal accountability.
- Registering through the ERP program and linking it to the electronic invoice program.
And now, we have shown all about the electronic invoice in Egypt. If you want to know more, click here or seek advice from AHG, the best audit firm in Egypt.