Taxes explain the reasons for imposing a tax on restaurants that deliver orders via the Internet


12:18 PM

Thursday 10 June 2021

Books – Mustafa Eid:

Reda Abdel Qader, head of the Egyptian Tax Authority, said in a statement to the authority today, Thursday, that the decision to subject foods manufactured or sold by restaurants and shops that provide their services through the delivery of orders through their websites to value added tax is a clear embodiment of tax justice and support for fair competition in society. tax.

And Dr. Mohamed Maait, Minister of Finance, had recently issued a new Decision No. 285 of 2021, which includes subjecting food that is sold or manufactured through restaurants and stores that provide a delivery service for orders received through their websites to value added tax.

The new decision comes to add this type of restaurants and shops to their counterparts that offer foods that are excluded from obtaining legal exemption from value-added tax, by a previous decision of the Minister of Finance No. 82 of 2017, which includes 5 other categories.

Reda Abdel Qader stated that recently, due to the conditions of the spread of the Corona virus, the state took measures regarding closing restaurants and shops and allowing sales through websites via delivery service, which led to the emergence of new entities that use electronic applications to sell food, and these entities are not registered with the Tax Authority.

He added that this is due to the existence of a general text related to exempting food in general for restaurants and non-tourist shops, except for some of the categories stipulated by the Minister of Finance Resolution No. 82 of 2017.

Abdel Qader pointed out that after the issuance of the Ministry of Finance Decision No. 285 of 2021, restaurants or stores that provide food through websites and are not registered with the Tax Authority, and their annual turnover amounted to more than 500,000 pounds, are obliged to register for value added tax and must abide by the provisions of the law.

He stressed that the decision to subject shops and restaurants that provide their services through applications and websites and which provide delivery service to value added tax was necessary to achieve tax justice.

As for the delivery service, the head of the Tax Authority clarified that it is a taxable revenue, and the tax-registered shipping company must collect the tax on the delivery service and supply it to the authority within its monthly returns, stressing that unregistered companies must go to registration if the volume of their transactions reaches the registration limit.

He stressed the tax administration’s endeavor to establish the rules of tax justice and achieve the interest of the Egyptian society and economy with the strong support of the political leadership and the Minister of Finance, which contributes to increasing tax revenues from various economic activities and re-pumping them in the form of services to all citizens.

Abdel Qader said that the Minister of Finance does not hesitate to achieve that justice by tracking the economic activities that impose different circumstances in order to achieve fair competition between similar activities that pay their taxes and new activities that were not covered by the legal legislation at the time of its issuance.

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