Amendments to Stamp Tax and Income Tax Laws

Written By - Amr Hareedy, Associate

As a part of the governmental efforts to improve the investment climate in Egypt. Law N. 199 of 2020 has been published in the official gazette on 30th September 2020 (the “Law”) to amend certain articles of reducing stamped duty tax and capital gains tax.

Stamp Tax
The Law stipulated the reduction of the Stamp Taxes on selling or purchasing securities after being subject to a 0.15% to be reduced to 0.125% for the non-resident sellers and 0.05% for the resident sellers.

Capital Gains Tax
Also, the Law postponed imposing the Capital Gains Tax until the end of 2021, to be reinstated after at a flat rate of 10% and at a rate of 5% in case the securities were listed on the stock exchange.

Taxes on Dividends
The Law determined the taxes on the dividend distributions by unlisted companies to be 10% withholding tax, while dividends made by listed companies are subject to a 5% rate regardless of whether the recipient holds more than 25% of the subsidiary’s shares or not as was previously required.