Egypt's House of Representatives has approved amendments to the Value Added Tax (VAT) Law (Law No. 67 of 2016), introducing changes affecting healthcare, transit trade, VAT refunds and the treatment of certain goods and services.
The amendments reduce the VAT rate on medical devices from 14% to 5%, extending the preferential rate previously available for machinery and equipment. Supplies, parts and components used for kidney dialysis equipment are also exempted from VAT.
To support Egypt's ambition of becoming a regional logistics hub, VAT will no longer apply to services supplied in connection with goods in transit, aligning the treatment of transit services with the existing exemption for transit goods.
The legislation also extends the maximum suspension period for VAT on imported machinery and equipment pending installation for industrial production from two years to four years. The same treatment will apply to qualifying medical devices used in industrial production.
VAT refund rules have been relaxed by shortening the period for recovering excess input VAT from six consecutive tax periods to four. Small businesses benefiting from the tax incentives regime under Law No. 6 of 2025 will be eligible to claim refunds after three months.
In addition, the amendments subject the leasing of administrative buildings and office units to VAT while allowing input VAT recovery or deduction through the income tax system, depending on the taxpayer's activities. Buildings used for religious, charitable, social, educational and healthcare purposes remain excluded.
The legislation further exempts financial services provided by the National Postal Authority, banks and financial institutions supervised by the Central Bank of Egypt or the Financial Regulatory Authority, ensuring consistent VAT treatment across providers.
Natural gas is removed from the VAT exemption list as part of its transfer to the separate schedule tax regime at a rate of EGP 20 per 1,000 cubic feet. The amendments also bring soap, household detergents and gypsum within the standard 14% VAT rate, allowing manufacturers to recover input VAT.
