Egypt

Corporate - Significant developments

Last reviewed - 13 December 2021

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.

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%; however, such tax is put on hold till the end of 2021 and should be applicable starting 1 January 2022). This suspension of tax is not extended to the gains realised from the listed government bonds by resident shareholders.
  • 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 subject to 0.05% stamp tax on the total proceeds realised without deducting any costs. This is a reduced rate from the 0.15% that was applicable until 16 May 2020 for transactions that don’t involve sale of shares exceeding 33% of an Egyptian company’s shares. This tax may be abolished by the end of December 2021.
  • As for non-resident investors, the stamp tax should be reduced from the above mentioned 0.15% (which was applicable until 16 May 2020) to 0.125%.
  • 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 not exceeding 33%). This tax may be abolished by the end of 2021.
  • 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 not exceeding 33%).
  • T-bills are not subject to stamp tax.