VAT on the making charge in Egypt
Egypt does not tax the full value of a gold piece. VAT falls on a making charge the government publishes, not the one the shop charged. The rule, and a worked example.
One of the things that most confuses gold retailers in Egypt is that VAT is not charged on the full value of the piece. The metal itself does not enter the tax base the way most people assume. The tax falls on the making charge.
And more precisely: which making charge?
Not the one the shop charged the customer — one the government publishes, per gram. That distinction matters: a shop downtown may charge 220 per gram and a shop in a village 80, and the tax on both is worked out from the same published figure.
The example
A ten gram ring at 875 with a metal value of 39,497.50, on which the shop charged a making fee of 1,200. Assuming a published making charge of 120 per gram and a rate of 14%:
| Line | Calculation | Result |
|---|---|---|
| Tax base | 10 g × 120 | 1,200.00 |
| Tax | 1,200 × 14% | 168.00 |
| Total | 40,697.50 + 168 | 40,865.50 |
Why a general-purpose system fails here
Most accounting software offers one field called "tax rate" and multiplies it by the line total. That describes one of the six shapes in the world, and it does not describe Egypt at all. What is needed is not a different percentage but a different base — a number that does not come from the invoice, but from a published decision.
And when the figure changes
Published making charges change. When they do, the old value must not be edited — a new row is added with the date it takes effect, so reprinting last year’s invoice still uses the figure that was in force that day. Editing the value in place reprices the whole of history, and that is a mistake nobody finds until an audit.
Questions we are asked
Is gold itself exempt from VAT in Egypt?
The metal does not enter the tax base the way ordinary goods do; the tax falls on the published making charge. The detail moves with ministerial decisions, so the rule in force on the day of sale is the one that applies.
What if my making charge is higher than the published one?
The tax is still worked out from the published figure. The difference stays with the shop as margin and is not part of the tax base.
How do I reprint an old invoice with the right figures?
The system has to have snapshotted the inputs onto the document when it was posted — rate, fineness, making rule and the version of the tax rule — so they are read back rather than recalculated.