On Thursday, June 3rd, the Ministry of Finance imposed a 14% value-added tax (VAT) on all online delivery services provided by restaurants and shops, according to an executive amendment to the VAT Act announced by Minister of Finance Mohamed Maait.
According to the new decision, all restaurants and businesses with more than 500,000 EGP in annual revenues will have to charge and remit VAT on their online delivery services. Restaurants, companies working in the field of food delivery via the Internet and applications, should collect a value tax of 14% for delivery, and supply it.
The Ministry also had recommended a higher VAT of 14%, up from 5%, on snacks, sweets, soaps, and detergents, raising industry-wide concerns of a drop in demand due to the sizable hike. Commercial services will also be subject to a VAT of 14%, but will be exempted from stamp tax. Taxes applied on retail stores inside malls are expected to be reduced to 10%, from 14%.
“The types of restaurants that were determined by the decision were listed, and the other categories to which the exemption does not apply, international restaurants and shops located in airports, commercial malls, archaeological sites, amusement parks, residential places, restaurants, shops, commercial and catering foods. Those restaurants and stores that are part of global or local chains or branches, or benefit from their trademark or trade name, and restaurants or stores in which the price of the service or commodity includes any other amounts such as service fee or others.” said ministry of finance employee, Ebtesam Saad.
“The statement published in the Official Gazette was addressing restaurants that expanded during the covid-19 lockdown, and the statement also addressed the projects that started to grow in the food delivery service or the companies that provide their services through applications or social media sites recently after the quarantine, so the government’s tax system must be reformed to include shops and restaurants that deliver food nowadays ” said Sameh Abdel Azeem, a fax office employee.
تعليقات