Egypt’s Ministry of Finance launches the second package of tax incentives aimed at boosting compliance, streamlining VAT refunds, resolving tax disputes, and supporting investment structures. Discover key measures, implications for businesses, and recommended next steps from Grant Thornton Egypt.
Egypt’s 2025 VAT amendments introduce major changes to construction contracts, commodity tax schedules, and exemption rules. This analysis explains the revised 14% VAT treatment, new input deduction opportunities, updated taxes on alcohol, tobacco, and petroleum, and key compliance steps businesses must take under the latest laws and executive regulations.
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.
New tax incentives, reduced penalties, and a simplified tax system: Egypt's latest tax reform offers a more favorable business environment. Learn more about the key benefits for businesses of all sizes.
Explore the concept of beneficial ownership in Egypt’s tax law and its alignment with international practices. Understand the OECD’s definition, its implications for tax treaties, and the importance for multinationals operating in Egypt.
Our tax experts break down the key changes under Egypt's newly issued VAT reforms for non-resident suppliers for e-commerce transactions
The STTR is an important plank in the narrative of how the Two-Pillar Project leans towards emerging and developing markets. Its introduction was a significant step towards creating a more equitable global tax system by ensuring these countries receive their fair share of tax revenues from cross-border economic activities.
In 2023, the OECD/G20’s Inclusive Framework released a series of documents addressing the tax challenges of a digital economy, dubbed BEPS 2.0. One of these was the STTR, a key component under Pillar Two that primarily targets cross-border payments between related parties, which are often structured to minimize the overall tax burden on multinationals.
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
