Egypt’s Law No. 149 of 2026 amends VAT rules covering medical equipment, industrial production, real estate, financial services, natural gas and credit balance refunds.
Egypt has enacted Law No. 149 of 2026, introducing amendments to the Value Added Tax (VAT) Law No. 67 of 2016 covering medical equipment, raw natural materials, real estate transactions, financial services and tax refunds.
The law was issued by Egyptian President Abdel Fattah El-Sisi on 28 July 2026 and published in the Official Gazette. It takes effect on the day following its publication.
VAT rates and medical equipment
The standard VAT rate remains 14%, with 1% of collected tax proceeds allocated to funding social justice programmes.
The law introduces a 5% VAT rate for machinery, equipment and medical devices used to produce a medical product or provide a service. Buses and passenger cars are excluded from this treatment.
Equipment used for medical purposes is classified as a medical device under the amended provision.
VAT is also not due on transit goods or services rendered to them where transportation takes place under the supervision of the Customs Authority.
VAT suspension for industrial producers
The amendments establish a temporary suspension of VAT on medical machinery, equipment and devices imported or purchased locally by factories and production units for industrial production.
The suspension applies for one year from the date of customs release or local purchase. The Tax Authority may extend the period for justified reasons, subject to a maximum cumulative period of three years.
Where an industrial producer demonstrates to the Tax Authority that the equipment has been used in industrial production during the suspension period, the suspended VAT is subject to a full exemption.
Following the exemption, the producer cannot dispose of the equipment for non-exempt purposes for five years. If the equipment is disposed of earlier, the producer must notify the Tax Authority and pay the applicable VAT based on its condition and value at the time of payment, using the tax rate then in force.
If the equipment is not used for industrial production before the suspension period, including approved extensions, expires, the producer must pay the suspended VAT and an additional tax. The additional tax is calculated retrospectively from the date of customs release or purchase until payment.
Credit balance refund rules
The amended law also changes the conditions for VAT credit balance refunds.
Generally, taxpayers may request a refund where a credit balance has remained outstanding for more than four consecutive tax periods.
For small projects subject to Law No. 6 of 2025, with an annual business volume not exceeding EGP 20 million, the period is reduced to more than three months.
Changes to VAT exemptions
Law No. 149 of 2026 replaces several entries in the list of goods and services exempt from VAT.
The revised exemptions include LPG (Butane Gas) and natural materials obtained from mines and quarries in their natural state, while raw petroleum and natural gas are excluded.
The amendments also revise the VAT treatment of real estate transactions. The sale and lease of vacant lands, agricultural lands, buildings and residential units are covered by the exemption.
Non-residential buildings and units used as commercial or administrative headquarters are generally excluded. However, non-residential units used for religious, charitable, social, educational and healthcare activities remain exempt. Other activities may qualify where designated by ministerial decree on public interest and social considerations.
Medical aids and financial services
The updated exemption list covers a range of medical aids and devices, including wheelchairs and their parts, artificial limbs, hearing aids and other devices worn, carried or implanted in the body to compensate for defects or disabilities.
The exemption also covers production inputs for such devices, kidney dialysis machines and related parts and accessories, including dialysers and filters, infant incubators, blood collection bags, family planning methods, serums, vaccines, blood and blood derivatives.
Savings funds and banking services provided by the National Post Authority are also included.
In addition, the amendments exempt non-banking financial services subject to the supervision of either the Central Bank of Egypt (CBE) or the Financial Regulatory Authority (FRA).
Natural gas and other table amendments
The law adds a new entry, Serial No. 17, to Table “First” of the VAT Law. It imposes a specific tax of EGP 20 per 1,000 cubic feet of natural gas.
Sales of medical machinery, equipment and devices covered by the VAT suspension provisions under Article 28 bis are also incorporated into Article 22, Paragraph 2.
The amendments repeal Serial numbers (8) and (10) of Table “First” attached to the VAT Law.
Overall, Law No. 149 of 2026 modifies the VAT framework for several sectors while introducing specific rules for the treatment, exemption and refund of VAT in relation to medical equipment, industrial production and small projects.
