Ministry Of Finance Issues a Circular on Collecting and Supplying (Table) Tax Enforced Under VAT Law

In attempt to facilitate and simplify procedures of VAT collecting, Ministry of Finance issues circular no. 113/2018 on procedures of collecting and supplying (table) tax, effected under VAT Law issued by virtue of Law no. 167/2016. This comes within the framework of applying provisions of the cooperation protocol recently signed by the Ministries of Finance, Justice and the Egyptian Bar Association (EBA).

The circular states that the Ministry of Finance requests authorities in charge of collecting the said tax under the signed protocol to apply the latter's provisions and to promptly adopt all necessary measures to collect tax proceeds and supply them to the Egyptian Tax Authority (ETA) via a check or any electronic payment means.

Under the recent cooperation protocol, taxes shall be levied in same values set in last year's signed protocol. Namely: 20 EGP for either civil or penal law cases filed before partial courts, and a tax of similar value in case of the appearance of lawyers with their respective agents during the prosecution's investigations in all police records, either misdemeanor or violations.

In addition, 40 EGP worth of taxes shall be levied for law cases filed before courts of first instance and such of equivalent ranks; 60 EGP for law cases filed before courts of appeal and such of equivalent ranks; and a similar value tax in case of lawyers' appearance with their agents before dispute settlement committees.

All collected taxes for such categories are deemed irrevocable. 200 EGP shall be collected for appeals submitted to Court of Cassation, the Supreme Administrative Court, the Supreme Constitutional Court and Commercial Arbitration, elaborates the circular.

With respect to practices performed by lawyers other than lawsuit filing - namely, providing consultations, drafting and revising contract and agreements, appearing before arbitral tribunals and investment dispute settlement committees - the circular states that VAT shall be calculated as per the submitted certified invoices or receipts in accordance to provisions of VAT Law and its executive regulation.

The circular stresses commitment of the Egyptian Tax Authority (VAT) to record proceeds of schedule tax under taxes payable by lawyers for any of their taxable services. ETA shall have the right to revise any data submitted by registries of court clerks to verify the authenticity of tax calculation and payment in accordance to provisions of the signed protocol.

Under the signed protocol, the Ministry of Justices shall be in charge of collecting schedule taxes via registries of court clerks and different prosecutions nationwide, through lawyers upon submitting statement of claims and appeals for registration.

Accordingly, registries of court clerks shall provide lawyers with receipts against paid amounts, send them to ETA via checks or any electronic payment means. The said registries shall also send a list of lawyers' names coupled with their tax registration numbers, law case numbers and other relevant data, not later than the first week of each month, to the sector of executive affairs at the Egyptian Tax Authority (VAT) located at Mahmodia Tower, Saqr Qurish, Autostrad St., AlMaadi.

As noted in the circular, taxes are not levied on services performed by lawyers affiliated to law firms and are registered at ETA, in case that such services are in favor of the lawyers' respective firms. Nevertheless, said lawyers shall abide by protocol provisions for each service they perform independent of their respective firms.

Schedule tax shall be paid for the period as of 15 April 2018 up till effective date of the new signed protocol. Lawyers shall submit tax returns to relevant tax directorates (income and value added) as per categories set in the said protocol, states the circular.

The circular requests financial officials at the Ministry of Justice and its affiliated entities, financial directors at the governorates, financial auditors and account managers and their representatives at those entities, to strictly abide by instructions and to properly implement and monitor all items provided therein.