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Egypt Amends Tax Laws for New Capital Gain, Stamp Tax and Personal Tax Rules

The Egyptian Government has approved Tax Laws 76 and 82 of 2017, which amend the Capital Gains Rules, the Stamp Duty and the Personal Income Tax:

  • Prior to the amendment, Capital Gains for Egyptian residents who transferred listed securities were exempt from tax until May 16, 2017;  the amendment extended this exemption another 3 years to May 16, 2020.  
  • The amendments also introduced new Capital Gain rules when an entity experiences a change in legal form - such as a corporate merger, spin-off, or change of entity type (corporate to partnership or vice versa).   The Capital Gain arising from a revaluation at the change event can be deferred provided that a proper tax value of assets and liabilities is established.
  • The amendments also introduced a new Stamp Tax that applies to the purchase or sale of any type of security - whether listed or unlisted and without deducting any costs. The rates for the new Stamp Duty on security transfers are:
    • between June 20, 2017 and May 31, 2018 - 0.25% of the value of the securities
    • between June 1, 2018 and May 31, 2019  - 0.30% of the value of the securities
    • after June 1, 2019 - 0.35% of the value of the securities
  • Also amended were the personal income tax rates to reduce the tax burden on low-income persons.  The amendments increased Bracket 1 from 6,500 to 7,200 EGP.  The new brackets will apply to salaried taxpayers as of 1/1/2017;  to professional and non-salaried taxpayers as of 7/1/2017:
    • Bracket 1:  income up to 7,200 EGP  ($400 USD) = exempt  
    • Bracket 2:  income from 7,201 to 30,000 EGP ($1, 666 USD) = 10% tax (with an 80% discount)
    • Bracket 3:  income from 30,001 to 45,000 EGP ($2,500 USD) = 15% tax (with a 40% discount)
    • Bracket 4:  income from 45,001 to 200,000 EGP ($11,111 USD) = 20% tax (with a 5% discount)
    • Bracket 5:  income over 200,001 EGP = 22.5% tax (with 0% discount)  

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