A year in review: Egypt introduces tax changes and investment incentives in 2017

(Last Updated On: 01/11/2017)

The last year has seen the Egyptian Government focus on economic transformation, resulting in a bundle of decisions and laws supporting initiatives which aim to improve the living standard of Egyptian citizens. Below we provide an overview of the major developments that have taken place in 2017.

VALUE ADDED TAX

On September 2016, the VAT law no. 67/2016 was issued to cancel and replace the General Sales Tax law no. 11/1991. The general VAT rate was set at 13% for the fiscal year which ended 30th of June 2017 and from 1st of July 2017, it has increased to 14%.

INCOME TAX

Based on its willingness to reduce the tax burden on low income taxpayers, the Government has introduced amendments on the Income Tax law no. 91/2005, which were promulgated by law no. 82/2017. Subject to law no. 82/2017, the provision of article no. 8 of law no. 91/2005 in terms of tax brackets should be replaced to be as follows:

Income in EGP Tax rate on bracket
7,200 0%
7,201 to 30,000 10%

(80% discount on due taxes is applied)

30,001 to 45,000 15%

(40% discount on due taxes is applied)

45,001 to 200,000 20%

(5% discount on due taxes is applied)

More than 200,001 22.5%

(no discount on due taxes is applied)

The discount shall be applied on the highest tax bracket under which the taxpayer should pay his income tax.

INVESTMENT INCENTIVES

As part of attracting new investments to the Egyptian market and ensuring fair arrangements for foreign and Egyptian investors, the new Investment law no. 72/2017 was issued on May 2017 to amend and replace the law no. 8/1997. The new Investment law includes a number of incentives aiming to provide a promising climate for investments from different industries and areas of specifications. It is worth to mention that the new law introduces - for the first time ever - the establishment of Technology Zones, which will operate and support the technology related industries. The law’s executive regulations are still under approval and once it is issued, it will explain and provide clear focus on the incentives granted by the law.

Your contact for further queries is:

Samar Abdel Rahman
Country Manager – Egypt
E.: samar.abdel.rahman@eurofast.eu

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