Egypt

Corporate - Significant developments

Last reviewed - 29 June 2022

Recent updates/changes have been announced by the Egyptian government to several articles in the Egyptian income tax law derived with an intention to stimulate the economy post the COVID-19 pandemic.

Such changes mainly cover the withholding tax (WHT) imposed on the dividend distributions made by an Egyptian company, capital gains tax (CGT) realised upon disposing Egyptian listed shares on the Egyptian Exchange (EGX), along with the stamp tax imposed, as explained below.

In addition to the above, the unified tax procedures law has been issued, which mainly covers the procedures for the filing of different taxes, registration for tax purposes, and the penalties for non-compliance, as well as other tax topics.

In addition, a recent decree has been published abolishing the 20% stamp tax that has been imposed on the advertisements and adding a 14% VAT instead.

Dividends distributed by a listed Egyptian company

  • A flat rate of 5% WHT is to be imposed on dividend distributions from shares listed on the EGX, whether to resident or non-resident shareholders.
  • Please note that the company’s shares should be registered and also traded on the EGX in order to be considered as listed shares.

Dividends distributed by a non-listed Egyptian company

  • A flat rate of 10% WHT is to be imposed on dividend distributions from an Egyptian unlisted company, whether to resident or non-resident shareholders.

CGT imposed on the gains realised from the disposal of shares/securities listed on the EGX

  • Capital gains realised by resident shareholders should be subject to CGT at the rate of 10%.
  • On the other hand, capital gains realised by non-resident shareholders should permanently be exempt from CGT, including the T-bonds.

Stamp tax imposed on the proceeds realised upon disposing shares / securities listed on the EGX

  • Resident investors trading in or holding shares listed on the EGX (i.e. whether buyers or sellers) should be exempt from stamp tax starting 1 January 2022 (abolishing the 0.05% that has been applied on the transactions involving less than 33% of the shares).
  • As for non-resident investors, the stamp tax should be 0.125% for the transactions involving less than 33% of the shares.
  • In addition, spot EGX transactions should be totally exempt from stamp tax.
  • T-bonds are not subject to stamp tax.

Stamp tax imposed on the proceeds realised upon disposing unlisted shares / securities 

  • Resident investors trading in or holding shares unlisted on the EGX should be subject to 0.05% stamp tax on the total proceeds realised without deducting any costs (for the transactions involving less than 33%). 
  • As for non-resident investors, the stamp tax should be 0.125% imposed on the total proceeds realised upon disposing unlisted shares (for the transactions involving less than 33%).
  • T-bills are not subject to stamp tax.