Fundamental Amendments to the Income Tax Law to Prevent Double Taxation

Cairo – Nadeh Imam: Rasha Abdel Gawal, head of the Egyptian Tax Authority, confirmed that, within the framework of full coordination between the Ministry of Finance, the Tax Authority, and the Financial Regulatory Authority, a package of benefits and incentives for securities market activities was approved to activate the stock market and support the economy. This comes in light of the second package of tax facilitations and the directives of Finance Minister Ahmed Kojok, aimed at supporting, incentivizing, and encouraging compliant taxpayers and fostering investment.

She explained that a series of amendments were made to Income Tax Law No. 91 of 2005 and Stamp Duty Law No. 111 of 1980. These amendments targeted the elimination of double taxation related to dividend distributions, provided a cash incentive for companies that list their shares on the stock exchange based on a set of criteria, and stipulated that capital gains arising from the disposal of listed securities would be exempt from income tax, subject only to the proportional stamp duty prescribed under Stamp Duty Law No. 111 of 1980.

For greater transparency and fairness, Rasha Abdel Gawal stated that transactions involving the sale of unlisted securities were excluded from stamp duty, with income tax being the sole applicable levy, thereby definitively eliminating double taxation. She further noted that the activity of “market makers” was exempted from stamp duty, recognizing the role this activity plays in supporting the Egyptian Stock Exchange and increasing trading volumes.