All you need to know about the Egyptian e-invoice project

Is electronic invoicing mandatory in Egypt?

In Egypt, electronic invoicing has become a mandatory requirement for companies going public.

The Egyptian Tax Authority (ETA) has asked 134 major companies to submit electronic invoices to the ETA’s online portal from November 15, 2020. ETA is responsible for establishing and controlling the electronic invoice approval system. It defines an electronic invoice as a digital document that certifies the sale of goods and the provision of services.

Electronic invoicing is a better way to do business: it is cheaper, faster, less error-prone, integrated directly into the accounting process, and more environmentally friendly than paper and digital invoicing. Commercial and financial transactions have gone through a digital process in recent decades with the introduction of electronic invoicing.

While the benefits of implementing electronic invoicing are equally apparent to governments and businesses, adoption rates are relatively low globally, with the exception of a few countries.

Egypt is currently pushing to expand electronic invoicing. Depending on the turnover of the companies involved, the Egyptian accounting system is followed successively.

In March 2020, the Egyptian Ministry of Finance announced the mandatory use of electronic invoices. The measure aims to promote the digital transformation of countries and businesses, promote tax control, eliminate the informal economy, and combat tax evasion and evasion.

The rollout of the Egyptian e-invoicing project will be implemented in stages according to a phased access plan for taxpayers developed by the Egyptian Tax Authority (ETA).

The first step, taken on November 15, 2020, initially required 134 companies to exchange invoices through a central system controlled by ETA, known as the Electronic Invoicing System.

It is a centralized solution for tracking all business-to-business (B2B) transactions through the instant exchange of invoice data in digital format.

The e-invoicing platform supports digital capture of invoices circulating in the country, starting with business-to-business (B2B) invoices and then business-to-consumer (B2C) invoices. With this in mind, EDICOM has developed a project to enable our clients to fulfill their obligations and exchange invoices through the Egyptian electronic invoice system.

Egyptian billing system features

Egyptian tax authorities have opted for the pre-validation model. This requires the company to send an electronic invoice to ETA in advance for verification. After checking, they can be forwarded to recipients. Electronic invoices must also be electronically signed to ensure the security of the information exchanged. The system also includes issuing and receiving electronic invoices, debits and credits. Acceptable electronic invoice formats are JSON or XML.

Project challenges

One of the biggest challenges of this project was dealing with unforeseen changes, which meant that our client interface had to adapt. We also had to provide electronic invoices to 40 customers operating in Egypt within a very tight time frame. “Until September 2020, there was no request from the Egyptian tax authorities. Nevertheless, we started to produce electronic invoices on November 15 at companies such as Procter & Gamble,” explains Youssef Monkachi, Project Manager at EDICOM. According to the technical and legal requirements set by the tax authorities, EDICOM has become one of the pioneer companies to provide electronic invoicing services in Egypt. In fact, the company has been involved as an e-invoicing technology provider from the early stages of the Egyptian project and has been able to work with other companies and government taxpayers to optimize the e-invoicing system before extending it to other companies. “EDICOM is recognized by the ETA as an expert. We even helped the agency with issues they were uncertain about,” Monkachi added.

The solution implemented: Global Invoicing platform

The global invoicing platform enables companies to send and receive electronic invoices integrated with their ERP systems. The platform can convert any invoice format to Egyptian standards, sign documents electronically and submit them to the government for pre-validation. “The company doesn’t have to worry about the ETA connection format. The client just generates the data he needs in whatever format. We draw and sign the document,” says the project manager. The EDICOM platform sends a notification in the event of cancellation or rejection by the Egyptian tax authorities, always controlling the traceability of invoices. Verified invoices are sent to recipients in a mutually agreed-upon format.

Project development: the keys to success

One of the most important keys to successful project implementation is the responsiveness of the technical team, which benefits from the coordination, coordination, and communication between the project implementation, R&D, and systems departments.

“We developed the ETA specification very quickly, especially the electronic signature module developed in a short period of time,” said Otman Maamori El Azri, the project’s team manager.

Egyptian e-Invoicing

One of the most important keys to successful project implementation is the responsiveness of the technical team, which benefits from the coordination, coordination, and communication between the project implementation, R&D, and systems departments. “We developed the ETA specification very quickly, especially the electronic signature module developed in a short period of time,” said Otman Maamori El Azri, the project’s team manager.

The e-invoicing platform will support digital capture of invoices circulating in the country, starting with business-to-business (B2B) and later business-to-consumer (B2C) invoices. Ministerial Decree No (188) of 2020 was issued to bind tax companies to the electronic invoicing system.

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