Coding of ads on social media for the Egyptian tax authority

In light of the great development witnessed by the digital world and the increasing reliance of companies and individuals on social media platforms for advertising, the Egyptian Tax Authority has taken an important step to regulate this market, which is the application of an advertising coding system. This system aims to ensure the inclusion of digital advertising within the tax system, thereby achieving transparency and fairness among all advertiser

Ad coding is a system created by the Egyptian tax authority to track ads that are posted on social media platforms such as Facebook, Instagram, and TikTok. The system aims to ensure that all digital advertising is registered and subject to tax laws. Simply put, any declaration must be notarized with an electronic invoice and link its costs to a specific tax registration number.

To implement this system, there are clear steps that advertisers must adhere to:

1. Tax registration: individuals and companies who advertise through social media must register with the tax authority to obtain a tax registration number.

2. E-invoice issuance: every advertisement published on social media platforms must be documented with an e-invoice within the Egyptian e-invoice system.

3. Disclosure in the tax return: all advertising costs must be included in the annual or monthly tax return of advertisers, depending on their registration system.

* Digital advertising is subject to VAT at 14%.

* If the ads are made via foreign platforms such as Facebook or Google, these companies are required to deduct the tax from the Egyptian advertisers and transfer it to the tax authority.

Despite the importance of the system, there are several challenges that stand in front of its full implementation:

1. Lack of awareness: many individuals and small businesses are unaware of the required actions.

2. Dealing with international platforms: the application of the system needs significant cooperation with companies such as Facebook and Google, especially with regard to tax collection and transfer to the Egyptian tax authority

3. Difficulty tracking unofficial ads: especially ads made by individuals without tax registration or documentation.

To overcome the challenges, several actions can be performed:

* Awareness: publishing awareness campaigns to educate advertisers about the new tax procedures and their importance.

* International cooperation: enhancing cooperation with major digital platforms to ensure compliance with Egyptian laws

* Simplifying procedures: facilitating the process of tax registration and issuing electronic invoices to encourage individuals and companies to comply.

The ad coding system is an important step in Egypt's march towards the regulation of the digital economy. As efforts continue to promote awareness and develop actions, this system will achieve great success in creating a more regulated and fair digital market. Adherence to this system is not only a legal duty, but also a common responsibility towards achieving a sustainable economic future.