Egypt’s House of Representatives has given final approval to a new set of amendments to the country’s Value Added Tax law, introducing several tax changes aimed at supporting healthcare, improving tax fairness, and encouraging local production.
One of the most notable measures is the reduction of VAT on medical devices to 5%, compared with the standard 14% rate. The move is designed to ease pressure on the healthcare sector and bring the tax treatment of medical equipment closer to that applied to machinery and industrial equipment.
Medical Devices Receive Preferential Tax Treatment
Under the approved amendments, medical devices will benefit from a special 5% VAT rate. The law also removes VAT from key supplies used in kidney dialysis, including machines, filters, parts, and related equipment. This exemption is expected to reduce costs for essential medical services and support patients who depend on regular dialysis treatment.
The legislation also expands VAT payment suspension rules for machinery, equipment, and medical devices used in production. The suspension period has been extended from two years to four years, giving businesses more time before tax payments become due while equipment is installed and put into operation.
This measure applies to devices used in manufacturing prosthetics, medicines, medical solutions, and blood plasma, reflecting the government’s broader goal of strengthening Egypt’s healthcare-related industries.
New Rules Target Production, Services, and Natural Gas
The amendments also introduce changes beyond the healthcare sector. VAT will no longer apply to services carried out on transit goods, matching the existing exemption for the goods themselves. This step is intended to support Egypt’s ambition to become a stronger regional logistics and trade hub.
Tax refund rules have also been adjusted. Businesses will now be able to recover credit balances after four consecutive tax periods instead of six. Smaller enterprises covered by Law No. 6 of 2025, with annual turnover not exceeding EGP 20m, will be allowed to request refunds after only three months.
At the same time, administrative building and unit leases will now fall under the standard VAT rate, although exemptions remain in place for properties used for religious, charitable, social, educational, and healthcare purposes.
The law also changes the treatment of natural gas by removing it from the VAT exemption list. Instead, it will be subject to a schedule tax of EGP 20 per thousand cubic feet.
In another production-related measure, the amendments grant tax deduction rights on sales of locally produced machinery, equipment, and medical devices. The goal is to place domestic manufacturers on a more equal footing with imported goods that already receive tax advantages.
The new law will come into force one day after its publication in Egypt’s Official Gazette.
