2nd of September, 2015
New Amendments to the Tax Law
By: Lamiaa Youssef and Ahmed Jamal
The President has issued Law 96/2015 that incorporates amendments to the Tax Law 91/2005. The new law significantly changes the tranches of the taxpayers and the tax rate; changes the rules governing tax over distribution of dividends and capital gains tax realized from the sale of shares. The main changes are as follow.
- The tax rate is reduced and the tranches are modified. On the floor of the tax scheme, the individual who earns more than EGP 6’500 per year shall pay 10% taxes. On the cap of the scheme, the individual who earns more than EGP 200’000 per year shall pay 22.5% taxes.
- Taxpayers resident in Egypt may deduct the value of taxes they pay outside Egypt in relation to revenue realized outside Egypt. This revenue includes earnings from industrial or commercial activities, professional activities, intellectual property rights, dividends, and/or capital gains realized from sale of shares or quotas.
- Resident natural persons are again exempt from paying taxes over dividends received from resident juristic persons. They will still pay taxes on revenues from dividends received from non-resident juristic persons.
- In addition, dividends distributed by resident juristic persons to other resident juristic persons will now be exempt from the 10% withholding tax introduced in June 2014. However, dividends distributed by juristic persons to non-resident persons will still be subject to tax.
- Capital gains realized by non-resident natural or juristic persons from the sale of listed shares are still subject to 10% withholding tax. However, the paying entity is not required to deduct and deliver the tax anymore. It is merely required to notify the tax authority at the time the transaction takes place, as well as at the end of the tax year. The tax authority will submit a claim to the taxpayer requesting payment of the tax. If he refuses or fails to deliver, the tax authority will notify EFSA and the entity effecting the transaction.
- The amendments have delayed the activation of the capital gain tax realized from the sale of shares listed in Egypt for two years. The two-year waiver period shall start from 17/5/2015.
- In addition to the above, the temporary tax that was imposed in 2014 is modified. Now, any annual earnings of EGP1’000’000 or more is subject to 5% extra-tax above the tranches referred to above. This extra-tax shall be applicable only for the period of one year. The taxpayer will no longer be able to choose the channel in which such 5% shall be used as was the case in the 2014 amendment.
A copy of the decision (Arabic) can be accessed here.
- The tax rate is reduced and the tranches are modified. On the floor of the tax scheme, the individual who earns more than EGP 6’500 per year shall pay 10% taxes. On the cap of the scheme, the individual who earns more than EGP 200’000 per year shall pay 22.5% taxes.
- Taxpayers resident in Egypt may deduct the value of taxes they pay outside Egypt in relation to revenue realized outside Egypt. This revenue includes earnings from industrial or commercial activities, professional activities, intellectual property rights, dividends, and/or capital gains realized from sale of shares or quotas.
- Resident natural persons are again exempt from paying taxes over dividends received from resident juristic persons. They will still pay taxes on revenues from dividends received from non-resident juristic persons.
- In addition, dividends distributed by resident juristic persons to other resident juristic persons will now be exempt from the 10% withholding tax introduced in June 2014. However, dividends distributed by juristic persons to non-resident persons will still be subject to tax.
- Capital gains realized by non-resident natural or juristic persons from the sale of listed shares are still subject to 10% withholding tax. However, the paying entity is not required to deduct and deliver the tax anymore. It is merely required to notify the tax authority at the time the transaction takes place, as well as at the end of the tax year. The tax authority will submit a claim to the taxpayer requesting payment of the tax. If he refuses or fails to deliver, the tax authority will notify EFSA and the entity effecting the transaction.
- The amendments have delayed the activation of the capital gain tax realized from the sale of shares listed in Egypt for two years. The two-year waiver period shall start from 17/5/2015.
- In addition to the above, the temporary tax that was imposed in 2014 is modified. Now, any annual earnings of EGP1’000’000 or more is subject to 5% extra-tax above the tranches referred to above. This extra-tax shall be applicable only for the period of one year. The taxpayer will no longer be able to choose the channel in which such 5% shall be used as was the case in the 2014 amendment.
A copy of the decision (Arabic) can be accessed here.
New Amendments to the Tax Law
2nd of September, 2015
By: Lamiaa Youssef and Ahmed Jamal
The President has issued Law 96/2015 that incorporates amendments to the Tax Law 91/2005. The new law significantly changes the tranches of the taxpayers and the tax rate; changes the rules governing tax over distribution of dividends and capital gains tax realized from the sale of shares. The main changes are as follow.
- The tax rate is reduced and the tranches are modified. On the floor of the tax scheme, the individual who earns more than EGP 6’500 per year shall pay 10% taxes. On the cap of the scheme, the individual who earns more than EGP 200’000 per year shall pay 22.5% taxes.
- Taxpayers resident in Egypt may deduct the value of taxes they pay outside Egypt in relation to revenue realized outside Egypt. This revenue includes earnings from industrial or commercial activities, professional activities, intellectual property rights, dividends, and/or capital gains realized from sale of shares or quotas.
- Resident natural persons are again exempt from paying taxes over dividends received from resident juristic persons. They will still pay taxes on revenues from dividends received from non-resident juristic persons.
- In addition, dividends distributed by resident juristic persons to other resident juristic persons will now be exempt from the 10% withholding tax introduced in June 2014. However, dividends distributed by juristic persons to non-resident persons will still be subject to tax.
- Capital gains realized by non-resident natural or juristic persons from the sale of listed shares are still subject to 10% withholding tax. However, the paying entity is not required to deduct and deliver the tax anymore. It is merely required to notify the tax authority at the time the transaction takes place, as well as at the end of the tax year. The tax authority will submit a claim to the taxpayer requesting payment of the tax. If he refuses or fails to deliver, the tax authority will notify EFSA and the entity effecting the transaction.
- The amendments have delayed the activation of the capital gain tax realized from the sale of shares listed in Egypt for two years. The two-year waiver period shall start from 17/5/2015.
- In addition to the above, the temporary tax that was imposed in 2014 is modified. Now, any annual earnings of EGP1’000’000 or more is subject to 5% extra-tax above the tranches referred to above. This extra-tax shall be applicable only for the period of one year. The taxpayer will no longer be able to choose the channel in which such 5% shall be used as was the case in the 2014 amendment.
A copy of the decision (Arabic) can be accessed here.
- The tax rate is reduced and the tranches are modified. On the floor of the tax scheme, the individual who earns more than EGP 6’500 per year shall pay 10% taxes. On the cap of the scheme, the individual who earns more than EGP 200’000 per year shall pay 22.5% taxes.
- Taxpayers resident in Egypt may deduct the value of taxes they pay outside Egypt in relation to revenue realized outside Egypt. This revenue includes earnings from industrial or commercial activities, professional activities, intellectual property rights, dividends, and/or capital gains realized from sale of shares or quotas.
- Resident natural persons are again exempt from paying taxes over dividends received from resident juristic persons. They will still pay taxes on revenues from dividends received from non-resident juristic persons.
- In addition, dividends distributed by resident juristic persons to other resident juristic persons will now be exempt from the 10% withholding tax introduced in June 2014. However, dividends distributed by juristic persons to non-resident persons will still be subject to tax.
- Capital gains realized by non-resident natural or juristic persons from the sale of listed shares are still subject to 10% withholding tax. However, the paying entity is not required to deduct and deliver the tax anymore. It is merely required to notify the tax authority at the time the transaction takes place, as well as at the end of the tax year. The tax authority will submit a claim to the taxpayer requesting payment of the tax. If he refuses or fails to deliver, the tax authority will notify EFSA and the entity effecting the transaction.
- The amendments have delayed the activation of the capital gain tax realized from the sale of shares listed in Egypt for two years. The two-year waiver period shall start from 17/5/2015.
- In addition to the above, the temporary tax that was imposed in 2014 is modified. Now, any annual earnings of EGP1’000’000 or more is subject to 5% extra-tax above the tranches referred to above. This extra-tax shall be applicable only for the period of one year. The taxpayer will no longer be able to choose the channel in which such 5% shall be used as was the case in the 2014 amendment.
A copy of the decision (Arabic) can be accessed here.
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