Article 18 Repeal in Egypt: A 2027 Plan to Get Regular Books and Accounting Systems Ready Before 2028
Quick answer: Laws 150 and 151 of 2026 were published in the Official Gazette on 28 July 2026 and took effect on 29 July 2026. They repealed Article 18 of the Income Tax Law, the legal basis for estimated (deemed-profit) assessment, and removed the EGP 500,000 turnover threshold for keeping books, so every taxpayer carrying on a commercial, industrial, craft or professional activity must now keep regular books, manually or electronically. The old Article 18 rules still apply to tax period 2027 and earlier, and treatment based entirely on books and digital systems starts with tax period 2028. That makes 2027 the year to get your accounting system ready, not the year to start thinking about it.
The Article 18 repeal ends an era in which many small Egyptian businesses, including clinics, professional offices and shops, were taxed on estimated net-profit ratios rather than on real books. This guide explains what changed according to the official texts, compares the regular-books route with the simplified tax regime, and then sets out Smart One Group's six-layer framework for preparing your accounting systems and data before tax period 2028, with a clear implementation timeline.
What do the Article 18 repeal and regular books mean?
Estimated assessment means setting tax through profit ratios or estimates applied by the tax administration when there are no reliable books, rather than through the business's actual figures. According to the Egyptian Tax Authority (ETA) statement of 17 September 2026, Article 18 was the legislative cover for net-profit-ratio instructions and estimated, lump-sum assessment.
Regular books are the accounting records and books required by Commerce Law No. 17 of 1999, kept consistently by hand or electronically, with every transaction backed by a source document. Law 150 of 2026 rewrote the first paragraph of Article 38 of the Unified Tax Procedures Law No. 206 of 2020 so that it obliges every taxpayer carrying on a commercial, industrial, craft or professional activity to keep these books, without prejudice to Law 6 of 2025.
The July 2026 package items that matter most to small and medium businesses:
- Article 18 repealed by Article Six of Law 151 of 2026 (Arabic PDF), while the rules issued under it continue to apply to tax period 2027 and earlier.
- The EGP 500,000 threshold is gone: bookkeeping is no longer tied to turnover, per Law 150 of 2026 (Arabic PDF) and the ETA statement.
- An eight-month temporary tax card for completing incorporation and licensing (new Article 27 bis), which the text says cannot be used to issue electronic receipts or invoices.
- A temporary settlement of non-final taxes for earlier periods for businesses with annual turnover up to EGP 10 million, through fixed amounts or turnover percentages, with the right to choose ordinary assessment instead. The details are for your chartered accountant to work through.
Timeline: why 2027 is the preparation year
| Date | Event | What it means for your system |
|---|---|---|
| 12 February 2025 | Law 6 of 2025 published for businesses up to EGP 20 million | A simplified route with fewer records, conditional on the e-systems |
| 28 and 29 July 2026 | Laws 150 and 151 published and in force | Regular bookkeeping no longer depends on turnover |
| 17 September 2026 | ETA statement ending estimated assessment | Audits will rely on digital invoices, receipts and books |
| Tax period 2027 | Last period under the Article 18 rules | Run the new system in parallel all year |
| Tax period 2028 | Treatment based entirely on books and digital systems | Complete books from day one of the period |
The practical rule is simple: tax period 2028 starts with an opening balance, and an opening balance needs a stock count and correct balances at the end of 2027. The real work has to start now.
Regular books or the simplified tax regime?
If your annual turnover does not exceed EGP 20 million, you have two options. The simplified regime under Law 6 of 2025 levies income tax as a percentage of turnover, from 0.4% for businesses below EGP 500,000 up to 1.5% for the EGP 10–20 million band, and you apply online using Form (1/10).
| Criterion | Regular books | Simplified regime (Law 6 of 2025) |
|---|---|---|
| Who it suits | Any business; mandatory if you do not join the simplified regime | Businesses with annual turnover up to EGP 20 million |
| Required records | Full Commerce Law books, manual or electronic | Fixed-asset register, raw-materials stock register, sales and purchases journals, tax summary book, plus the e-invoice or e-receipt |
| Tax base | Actual net profit from the books | A percentage of turnover |
| Deciding condition | Orderly books and valid documents | E-invoice and e-receipt compliance plus on-time returns |
| Leaving | Not applicable | After at least 5 years, using Form (1/11) |
Minister of Finance Decree 420 of 2025 (Arabic) sets out these simplified records and allows them on paper or electronically. In its 7 March 2026 statement the ETA stressed that failing to comply with the e-invoice and e-receipt systems leads to exclusion from the simplified regime. The simplified regime is therefore not an exemption from systems. It means lighter books and stricter digital compliance.
Smart One Group's regular-books readiness framework: six layers
We built this framework from our work on accounting systems, clinic systems and hosting. It applies to businesses on regular books and, with less depth, to those on the simplified regime.
1. Undeletable entries and a full audit trail
Electronic regular books mean a posted entry is never deleted, only reversed, numbering is sequential with no gaps, and every change is logged with the user and time. Ask your system vendor to confirm all three in writing.
2. E-invoice and e-receipt integration with monthly reconciliation
Because audits will rely on digital documents, the sales in your books must match what the ETA system recorded. Integration rules published in the ETA e-receipt SDK include:
- A receipt must be submitted within 24 hours of issuance, unless it is a corrected resubmission.
- An individual buyer's national ID becomes mandatory when the receipt total is EGP 150,000 or more for receipt version 1.2 and newer.
- A single submission is capped at 500 receipts, and a return receipt can be issued up to 540 days after the sales receipt.
- Access tokens are valid for 60 minutes by default, and excessive calls return HTTP 429, so your system must retry after the indicated wait.
3. Sales linked to inventory and fixed assets
The Commerce Law requires an inventory book recording stock at the end of the financial year. Every sale or issue should update stock automatically, and fixed assets need a register with depreciation, so the December 2027 count does not turn into a crisis.
4. Five-year retention: hosting, backups and a readable archive
Article 38 of the Unified Tax Procedures Law requires books, records and documents to be kept for five years. That is a technical obligation before it is an accounting one: a reliable server, daily off-site backups, regular restore tests and an archive that stays readable after a system change. If your system runs on an old server, see our Windows Server 2016 end-of-support plan.
5. Permissions and segregation of duties
The person who issues an invoice should not approve the entry, and the person who approves entries should not change prices. Role-based permissions, two-factor authentication for finance accounts and logging of every sign-in turn electronic books into reliable evidence rather than just files.
6. Reports ready on demand
Your system should produce the general journal, general ledger, sales-versus-ETA reconciliation, inventory report and tax summary in minutes. If you run payroll, connect it to the accounting system as explained in our work regulations and payroll systems guide.
Implementation plan before tax period 2028
- Q4 2026 (assess): choose your route (regular books or simplified regime) with your accountant and map every sales source: POS, invoices, clinic bookings, online store.
- Q1 2027 (select): choose an accounting system or upgrade the current one, check it against the six layers, and set up hosting and backups.
- Q2 2027 (integrate): complete e-invoice and e-receipt integration and goods and services coding, and migrate balances.
- H2 2027 (parallel run): run electronic books for real, reconcile monthly with the ETA system and fix errors early.
- December 2027 to January 2028 (close and launch): physical stock count, year-end close and an approved opening balance for the first period based entirely on books.
Common mistakes to avoid
- Assuming nothing changes until 2028: the bookkeeping obligation has applied since 29 July 2026, and 2028 is when the tax treatment relies on books entirely.
- Relying on editable spreadsheets with no audit trail or backups.
- Issuing invoices from one system and receipts from another with no regular reconciliation.
- Starting a new business on the temporary tax card and expecting to issue e-receipts with it.
Frequently asked questions
When does the Article 18 repeal actually apply?
Law 151 of 2026 took effect on 29 July 2026, but the rules issued under Article 18 continue to apply to tax period 2027 and earlier. Treatment based entirely on books and digital systems starts with tax period 2028.
Do I need regular books if my turnover is below EGP 500,000?
Yes. According to the ETA, the EGP 500,000 threshold has been removed and every taxpayer must keep regular books, unless they have joined the simplified regime under Law 6 of 2025, which sets simplified records.
Do regular books apply to clinics and independent professionals?
The amended Article 38 covers every taxpayer carrying on a professional activity, alongside commercial, industrial and craft activities, so clinics and professional offices should review their systems and records.
Is off-the-shelf accounting software enough, or do I need a custom system?
Off-the-shelf software is enough if it meets all six layers: no deletion, an audit trail, ETA integration, inventory, five-year retention and reporting. A custom system makes more sense when you run several branches or mix sales with bookings and services.
How long must books and documents be kept?
Five years under Article 38 of the Unified Tax Procedures Law. Electronic data must stay readable and exportable for that whole period, even after you change your system or server.
Does the simplified regime exempt me from e-invoices and e-receipts?
No, it is the opposite. On 7 March 2026 the ETA confirmed that complying with both systems is a basic condition for the simplified regime, and that failing to comply leads to exclusion from it.
Note: this guide is technical and operational, not tax advice. Confirm your final decision with your chartered accountant and watch for executive regulations and ministerial decrees that may follow.
Smart One Group can help with custom accounting and clinic systems, hosting and backups and technical support contracts throughout your parallel run. If you would like your current system assessed against the six layers, contact us and we will build your 2027 plan with you step by step.
