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Research by Country/Region January 17, 2018  
EGYPT: CUSTOMS, TAXES, and DOCUMENTATION REQUIREMENTS: IT PRODUCTS and SERVICES IMPORTS

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A. Is this country a member of the Information Technology Agreement?

B. Customs documentation requirements for IT products

C. Software: duties and taxes, updates, licenses, electronically delivered

D. IT services: tax treatment and other regulations

E. Refurbished, used, or repaired computer equipment imports

A. IS THIS COUNTRY A MEMBER OF THE INFORMATION TECHNOLOGY AGREEMENT?
YES. The ITA is a staged reduction of customs duties on information technology products. Egypt just joined the agreement and will begin reductions in 2003, reaching zero tariffs by January 2005. Egypt's tariff reduction offer has not yet been posted to the World Trade Organization's website.
Signatories to the Information Technology Agreement (ITA) have eliminated their import duties on a wide range of information technology products, including software and computer hardware. For more information on the ITA, and exact tariff elimination schedules of signatories, click here.
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B. CUSTOMS DOCUMENTATION REQUIREMENTS FOR IT PRODUCTS

What are the documentation requirements for the physical import of software? For other information technology products?
In order to import software or any other information technology products, the following documents are required:
- original commercial invoice certified by the exporter
- original commercial invoice legalized by a U.S. Chamber of Commerce in the U.S., and an Egyptian Embassy/Consulate in the United States
- commercial agreement where the name of the buyer and the seller are listed, total cost and unit cost
- certificate of origin legalized by a U.S. Chamber of Commerce in the U.S., and an Egyptian Embassy/Consulate in the U.S.
- insurance certificate 10% higher than the commercial invoice
- packing list
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C. SOFTWARE: DUTIES and TAXES, UPDATES, LICENSES, ELECTRONICALLY DELIVERED

DUTIES AND TAXES ON SOFTWARE IMPORTS

Are duties assessed on the intellectual property of the software or on the medium on which is it presented?
Customs duties are primarily formulated as a percentage of the original cost regardless of the manufacturer, the content, or the medium. Customs duties on software are 5%.

Are taxes assessed on the intellectual property of the software or on the medium on which is it presented?
Taxes are assessed on the total shown on the original commercial invoice. There is a 10% sales tax, 3% services tax, and 1% commercial profits tax.

Is customized software treated differently than packaged software?
Customized software and packaged software are treated the same.
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IMPORTS OF SOFTWARE UPDATES

What are the customs duties and tax implications for software sold with updates when the full sales price, including cost of updates, is shown on the original commercial invoice? Are duties and taxes paid on that amount? What happens when the updates are sent at a later date? Are duties/taxes applied again? If so, based on what value? How should information presented on the commercial invoice for the original and subsequent shipments to avoid paying duties/taxes more than once on a single sale?
When the updates are sent at a later date, duties/taxes are applied again based on the value shown on the commercial invoice. In most cases, updates are sent through the Internet.
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SOFTWARE LICENSES: CUSTOMS CLASSIFICATION, IMPORT DUTIES, TAXES, OTHER

Are software licenses classified in Harmonized System 4907?
The Customs Authority does not necessarily use HS codes for software licenses.

Are import duties/taxes applied? If so, on what cost/price base are they levied?
Software licenses are not dutied or taxed, whether they arrive in the total package, or separately by mail.

Are withholding or other additional taxes applied on software licenses? If yes, how?
N/A

If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink-wrapped software imported from the United States, would that agreement be binding on consumers in your market? If so, would U.S. or local laws pertain?
If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink wrappped software imported from the U.S., we cannot say that the agreement would be binding 100% on consumers in the market. Currently, piracy rates in Egypt run as high as 80%. In May 2002, the Egyptian government passed a long-awaited, comprehensive IPR Law No. 82, that needs to be strongly implemented.
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SOFTWARE DELIVERED OVER THE INTERNET/ELECTRONICALLY DELIVERED SOFTWARE

Are taxes applied to software delivered to the end-user over the Internet? If so, on what value?
No, software delivered to the end-user over the Internet is not taxed.

Would the situation be different if this software were instead delivered to a distributor who has a license to produce (replicate) and sell the software?
If the software were instead delivered to a distributor who has a license to produce (replicate) and sell the software, he can replicate and sell but he has to pay local taxes.

What are the documentation requirements for the electronically delivered import of digitized products (i.e. software, movie downloads) over the Internet or other networks?
The downloading of digitized products over the Internet has not yet been regulated in Egypt.

Must an electronically delivered software import be accompanied by a physical shipment of the same product?
No.
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D. IT SERVICES: TAX TREATMENT AND OTHER REGULATIONS

Are services (i.e. training, set-up, etc) relating to the sale of software taxed? If so, at what rate and based on what value?
Yes, services related to the sale of software are locally taxed. It is based on 3% of the amount shown on the invoice in addition to 10% sales tax.

Are U.S. IT solution providers permitted to send personnel into the country to set up hardware/software-related systems?
U.S. information technology solution providers are permitted to send personnel into the country to set up hardware/software related systems.

Are special visa, work permits, and/or professional certification by an accredited body required?
The standard Egyptian visa is required and is obtainable at any Egyptian embassy/consulate in the U.S., or at Egyptian ports of entry. The tourist visa is valid for one month and is renewable for up to 3 months. In case the U.S. personnel needs to work in Egypt for longer periods, it is the importer's responsibility to request the work permit from the Egyptian Ministry of Interior.
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E. REFURBISHED, USED, OR REPAIRED COMPUTER EQUIPMENT IMPORTS

1. REFURBISHED COMPUTER EQUIPMENT
Is the import of refurbished computer hardware, parts, and accessories (including toner cartridges) permitted?
The importation of refurbished equipment is not allowed.
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2. USED COMPUTER EQUIPMENT
Is the import of used computer hardware, parts, and accessories (including toner cartridges) permitted?
Answers are the same as for refurbished hardware. See section E.1. above.
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3. REPAIRED COMPUTER EQUIPMENT
Are duties and taxes assessed on the re-import of repaired computer equipment?
No, there are no duties or taxes assessed on the re-import of repaired computer equipment. When shipped outside the country for repair, the computer equipment must be declared through a repair customs application where the serial and part numbers are listed. In case this document has not been proccessed, the importer must pay the previously mentioned taxes.

How should the commercial invoice appear?
The invoice should show the repair done and the cost.
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RESPONSE INFORMATION

This response was prepared by the U.S. Department of Commerce/Commercial Service in Cairo, Egypt, in February and May 2003. For further clarification please contact:
Hend El-Sineity
Commercial Specialist
U.S. Embassy, Cairo
Special Notes: The above information is intended to serve only as unofficial guidance. In seeking to obtain government rulings in specific cases, it will often be necessary to refer to special laws, separate regulations and announcements, and case-by-case decisions by the government. Beyond the general guidelines shown above, legal counsel should be retained at an early stage of consummation of a major procurement contract, and before entering into any legal commitments.

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