Egypt's Ministry of Finance has published a list of the 20 most frequently asked questions about the newly enacted tax relief laws, aiming to raise taxpayer awareness, streamline compliance, and encourage integration of the informal economy into the formal tax system. The English-language Q&A, released exclusively through Amwal Al Ghad Magazine, covers a wide range of issues, including exemptions for unregistered taxpayers, dispute settlement mechanisms, proportional tax rates for small businesses, and penalty waivers. 1- Are taxpayers, unregistered with the Egyptian Tax Authority, liable for previous years? No, they are not held liable for tax on previous periods. For the purposes of the Income Tax Law, Value Added Tax (VAT), Stamp Duty, and Development Fee, the official start date of business activity is considered to be February 13, 2025. However, certain conditions must be met to qualify for this exemption. 2- What are the conditions for exemption from tax liability for taxpayers unregistered with the Egyptian Tax Authority? To qualify for the exemption, unregistered taxpayers must meet the following conditions: 1. Submit an income tax registration application within three months from 13 February 2025. 2. Submit a VAT registration application within three months as of February 13, 2025, in accordance with the legally prescribed registration requirements. 3. No action must have been taken by the Tax Authority against the applicant before February 13, 2025. 4. All required documents must be submitted for registration across all electronic platforms, in line with the applicable implementation phases. 3- Can tax declarations that were not submitted for previous tax periods still be filed? Yes, taxpayers may submit all declarations and documents specified in Article 12 of the Unified Tax Procedures Law No. 206 of 2020 for the tax periods from 2020 to 2024, provided the original filing deadlines were before February 13, 2025. These can be filed without incurring any penalties or financial sanctions, provided they are submitted between February 13, 2025 and August 12, 2025. 4- Can amended tax declarations be submitted for previous periods? Yes, amended tax declarations may be submitted for the 2020 to 2024 tax periods without incurring any late payment penalties or additional tax for the period between the original and amended submissions. This applies in cases of omissions, errors, or missing information in the original declarations, provided the amended filings are submitted between February 13, 2025 and August 12, 2025. 5- What are the new mechanisms for resolving tax disputes related to estimated audits? The new mechanisms include resolving old disputes for years prior to 2020 by paying a tax equal to 30 per cent of the tax stated in the tax declaration for the year in dispute, in addition to settling any outstanding tax due. In cases where there is no tax on the "year of dispute" declaration, or if no declaration was submitted for the year in dispute, or if the declaration results in tax losses, the dispute can be resolved by paying a tax equal to 40 per cent based on the most recent agreement between the Tax Authority and the taxpayer, along with settling any tax due according to the last agreement. 6- Is it permissible to pay the tax resulting from the settlement of estimated audit disputes in installments? Yes, it is permissible to pay the tax in installments over one year, in four quarterly payments, without incurring any late payment fees or additional tax. 7- What is the new mechanism for resolving tax disputes related to the auditing of books and accounts? Old disputes for years prior to 2020 can be settled by waiving the dispute and paying the due tax, in return for a full waiver (100%) of late payment fees, additional tax, and other additional charges. 8- How can an individual who has made a real estate transaction or dealt in unlisted securities benefit from Law No. 5 of 2025? If they have not been taxed on their transactions in the five years preceding the law's implementation, they can submit a request for taxation and pay the tax due. If they have already been taxed and have a dispute, they can waive the dispute and settle the tax. In return, 100% of the late payment fees will be waived. 9- Does the Egyptian Tax Authority have the right, after the implementation of Law No. 5 of 2025, to tax individuals who have made real estate transactions or dealt in unlisted securities more than five years ago? No, the Tax Authority does not have the right to tax individuals for transactions that took place more than five years ago. 10- What tax incentives and concessions have been granted to businesses with annual revenues not exceeding EGP20 million? Exemptions include the state revenue development fee, stamp duty, notarisation and registration fees for company, credit facility agreements, mortgages related to their operations, and land registration contracts. Additionally, businesses are exempt from capital gains tax on the disposal of fixed assets, machinery, or production equipment, as well as from dividend tax. There is also an exemption from the withholding tax system or advance payments. Furthermore, a simplified proportional income tax is applied, calculated based on annual revenues, alongside the streamlining and simplification of tax obligations and procedures for this category of businesses. 11- What is the proportional tax due for these projects? 1. 4 per cent of turnover for projects with annual turnover of less than EGP 500,000. 2. 5 per cent of turnover for projects with annual turnover of EGP 500,000 and less than EGP 2 million. 3. 75 per cent of turnover for projects with annual turnover of EGP 2 million up to less than EGP 3 million. 4. 1 per cent of turnover for projects with annual turnover of EGP 3 million up to less than EGP 10 million. 5. 5 per cent of turnover for projects with annual turnover of EGP 10 million up to less than EGP 20 million. 12- What are the conditions for benefiting from the incentives and concessions granted to businesses with annual revenues not exceeding EGP 20 million? To qualify for these incentives and concessions, businesses must: 1. Submit an application under Law No. 6 of 2025, which provides specific incentives and concessions for businesses with annual revenues not exceeding EGP 20 million. 2. Comply with the statutory deadlines for filing tax declarations. 3. Enroll in the electronic systems—namely the e-invoicing and e-receipt platforms—in line with the applicable enforcement phases, and issue electronic invoices or receipts accordingly. 13- What are the tax obligations for these businesses? 1. Submit the annual income tax declaration between January 1 and March 31 for natural persons, and by April 30 for legal persons. 2. Submit four quarterly VAT declarations instead of monthly declarations. 3. Submit one annual payroll tax reconciliation statement instead of twelve-monthly payment declarations and four quarterly statements. 4. The first tax audit will be conducted after five years. 14- Which businesses are eligible to benefit from these incentives and concessions? Businesses with annual revenues not exceeding EGP 20 million, whether operating in commercial, industrial, or professional sectors, including e-commerce, content creation, and other types of activities and enterprises. 15- Which activities are not subject to the provisions of this law? The provisions of this law do not apply to the following activities: 1. Professional consultancy services where at least 90 per cent of the annual turnover is generated from providing advice to one or two individuals. The Minister of Finance may grant exemptions for certain activities under this provision. 2. Projects that engage in any act or behaviour aimed at unlawfully benefiting from the provisions of this law, including the unjustified division or fragmentation of an existing activity. The burden of proof rests with the Tax Authority. 16- Can businesses withdraw their request to benefit from this law? No, businesses subject to this law cannot withdraw their request to benefit from its provisions until five years have passed from the day after the submission of the application. 17- Are businesses enrolled in the simplified tax system eligible to continue benefiting from the established incentives if their annual revenues exceed EGP 20 million in any given year? Yes, in the following case: If a business's annual turnover exceeds EGP 20 million in any year within the five-year period by no more than 20 per cent, it can continue to benefit from the provisions of this law at a tax rate of 1.5 per cent of annual turnover. However, if the project exceeds the 20 per cent threshold or does so more than once within the five-year period, it will lose the benefits of this law from the following year. 18- Is it permissible to pay the late payment interest only up to the amount of the tax due, and waive the portion exceeding the principal tax amount? Yes, pursuant to the provisions of Law No. 7 of 2025. 19- Is it permissible to settle the penalty for failing to submit a nil tax declaration within a period not exceeding 60 days? Yes, in the following case: A settlement may be concluded by paying a compensation of no less than EGP 1,500 and no more than EGP 6,000, provided that this occurs prior to the initiation of criminal proceedings. 20- Is it permissible to settle the penalty for failure to apply the tax withholding system? Yes, a settlement may be concluded by paying a compensation equivalent to 12.5 per cent of the amounts that were not withheld, deducted, collected, or remitted under the tax withholding mechanism, in addition to the original amounts and the applicable late payment interest. Attribution: Amwal Al Ghad English
