New amendments to the Income Tax Law

The Egyptian government has issued Law No. (30) of 2023, which introduces significant changes to the Egyptian Income Tax Law (Law No. 91) by amending various articles, introducing new definitions, and implementing additional taxes. These amendments have far-reaching implications for individual and corporate taxpayers.

Key highlights of the amendments

Payroll Tax: 

• Increase in annual personal exemption: Effective from July 2023, the annual personal exemption for individual taxpayers will be raised to EGP 15,000.
• Revised progressive tax brackets: The progressive tax brackets have been modified, with the introduction of a new bracket of 27.5% on annual net income exceeding EGP 1,200,000 starting from July 2023.
• Obligatory notification for secondary employers: Secondary employers are now required to officially notify both the Egyptian Tax Authority and the original employer about any temporary employees, providing details of the gross income paid and the related remitted tax (10%).

Corporate Tax:

• Dividends tax: A dividends tax rate of 10% will apply to dividends distributed by civil companies to natural resident persons, without deducting any expenses.
• Withholding tax on investment funds: Residents earning profits, interests, and dividends from investment funds established under Egypt's Capital Market Law will be subject to withholding tax. Juridical persons will face a 15% withholding tax rate, while natural persons will face a 5% rate.
• Exemption for share exchanges: Transactions involving the swapping of shares between a listed company and an unlisted company will not be liable to Capital Gains Tax (CGT).
• Reporting obligation for non-resident persons: Non-resident individuals are now required to assess and remit capital gains tax resulting from the disposal of non-listed shares within 60 days of the transaction, following the executive regulations.
• CGT amnesty for listed shares: Amnesty grants are provided for any unpaid CGT due on the disposal of listed shares between January 2022 and 16 July 2023.

Conclusion

The new amendments are expected to drive positive changes in Egypt's tax landscape. These changes will be aiming to increase tax revenue, simplify the tax calculation for taxpayers, provide a more level playing field for taxpayers, and improve tax administration. As the new amendments will impact both individual taxpayers and businesses, it is important for affected parties to understand the implications of these amendments and ensure compliance with the revised tax regulations.