The Egyptian government has introduced a series of tax reforms aimed at supporting small and medium enterprises (SMEs) and fostering economic growth. These reforms are outlined in three new laws published on February 12, 2025. Law No. 5 of 2025 offers tax status settlement opportunities, allowing unregistered taxpayers to register without penalties and submit overdue tax returns without incurring late fees. It also provides options for settling tax disputes by paying a portion of the due tax and waives late payment fees for certain cases. Additionally, individuals involved in real estate or unlisted securities disposals can settle their taxes with exemptions from late fees. Law No. 6 of 2025 focuses on SMEs with annual revenues under EGP 20 million, offering tax exemptions, including exemptions on establishment fees, capital gains, and dividend distributions. The law introduces a reduced tax system based on turnover, along with simplified tax filing requirements, including the use of e-invoicing and simplified accounting records. Law No. 7 of 2025 amends the Unified Tax Procedures Law to enhance tax compliance and provide a clearer legal framework. It introduces a cap on late payment penalties, and allows tax offenses to be settled out of court for a reduced compensation amount, thus simplifying the tax process for businesses and individuals. These reforms are part of Egypt’s broader efforts to reduce tax-related barriers for SMEs, promote investment, and drive economic development.
This article explores strategies for maximizing foreign direct investment (FDI) in Egypt, focusing on key sectors such as finance, real estate, tourism, and manufacturing. It highlights Egypt's record-breaking FDI inflows in FY2023/24 and examines the factors driving this growth, including government reforms, improved infrastructure, and incentives for foreign investors. The article also discusses Egypt's shift towards a more market-driven approach, with an emphasis on enhancing private sector participation, streamlining regulations, and fostering a stable investment climate. It concludes with key takeaways on Egypt’s potential as a regional investment hub for sustainable economic growth.
Learn how Mutual Agreement Procedures (MAPs) can help resolve double taxation disputes in Egypt. This article delves into the importance of MAPs in the Egyptian tax landscape, highlighting their role in ensuring fair taxation and attracting foreign investment.
With transfer pricing principles becoming increasingly important as start-ups expand, we explain the salient points and how to meet the challenges
Effective 22 February 2024, Egypt's Unified Tax Procedures Law (UTPL) has undergone some changes, particularly in Article 12, which pertains to transfer pricing compliance by increasing the materiality threshold. Key changes • Easing of Master File and Local File requirements: Previously, any taxpayer engaging in related party transactions exceeding EGP 8 million was obligated to prepare and submit a Master File and Local File. • Increased materiality threshold: The revised law has raised this threshold to EGP 15 million. This means that taxpayers with related party transactions totaling less than EGP 15 million in a taxable year are now exempt from the burdensome task of preparing and submitting these transfer pricing documents. Implications for taxpayers This amendment offers significant relief to small and medium-sized enterprises (SMEs) operating in Egypt. By increasing the materiality threshold, the Egyptian tax authorities have recognized the administrative burden associated with transfer pricing compliance and have sought to streamline the process for taxpayers with relatively low levels of related party transactions. It is important to note that while the threshold for preparing Master Files and Local Files has been increased, taxpayers must still comply with other transfer pricing obligations, such as documentation requirements and transfer pricing analysis.
Breaking down the transfer pricing audit process in Egypt
We plot out how to plan, prepare and navigate the newly established automated audit process
Plotting out the supporting evidence that must be kept on hand for potential queries raised by the Egyptian Tax Authority at times of audit
The rationale and basics of implementing mechanisms for the correct administration of central/intra-group service charges
Our transfer pricing partners break down new guidance on transfer pricing rules issued by Egypt
Looking at key considerations for companies when it comes to transfer pricing risk assessment.
Examining the Egyptian tax authorities’ transfer pricing risk assessment criteria
Our transfer pricing partner looks at key considerations for companies when it comes to transfer pricing risk assessment.
We explain what information local tax teams need to collate for documentation purposes, and how, as audits become more likely and increasingly stringent.