What withholding is
Under Egypt's withholding and collection system, companies designated by the Tax Authority deduct a percentage from certain payments to suppliers and contractors and pay it to the Authority on the supplier's behalf. The supplier later offsets the withheld amount against its own tax.
The percentage depends on the type of transaction — for example supplies, services or contracting — and is set by the Authority. Check the current categories and rates before you configure them.
On every supplier bill
Withholding is easiest to get right at the moment you record the bill, not at quarter end.
- 01Make sure each supplier record has a valid tax registration number.
- 02Classify the bill by transaction type so the right percentage applies.
- 03Calculate the amount to withhold and pay the supplier the net amount.
- 04Record the withheld amount as a liability to the Tax Authority until it is paid.
Filing Form 41
Every quarter you file Form 41 with the Tax Authority, listing the amounts withheld from each supplier with their tax registration numbers, and pay the total. Suppliers rely on these filings to claim their credit, so errors in tax numbers or amounts come back as supplier complaints.
- 01Reconcile the withholding liability account with the quarter's bills before filing.
- 02Check that every supplier on the form has a tax number and the right transaction type.
- 03File and pay within the period set by the Authority and keep the submission receipt.
This guide is general information, not tax or legal advice. Rates, limits and deadlines change; confirm current figures with your accountant or the relevant authority.