Cairo –The Egyptian Ministry of Finance (MoF) has drafted a new bill that will replace the current income tax law in consultation with the Federation of Egyptian Industries’ (FEI) tax and customs committee, head of the committee Mohamed El Bahi told Enterprise.
Under the proposed bill, all subsidiaries of foreign companies operating in Egypt will be subject to taxes, El Bahi added.
In addition, the draft law will also raise the maximum limit of exemption on personal income tax to EGP 24,000 per annum from EGP 8,000 per annum, he noted.
Annual Incomes above EGP 24,000 and 45,000 per year will be subject to a 10% tax, while incomes between EGP 45,000 and EGP 80,000 per year will be subject to a 15% tax and annual incomes between EGP 80,000 and EGP 200,000 will be taxed at 20%.
As for annual incomes above EGP 200,000, a 22.5% tax will be applied.
Moreover, all online transactions will be brought under the new law which sets a legal definition for e-commerce.
According to the draft law which has been submitted for review to the minister of finance Mohamed Maait before being submitted to the parliament, online receipts and phone messages would be used as proof of expenses and allowable un-receipted expenses will be at 2% of the company’s total revenues.
The proposed law, if approved, would also extend the authorisation of the tax dispute resolution committees to settle disputes dated between 31 December 2018 and until the end of 2019.
All cases dated before October 2018 or involving small amounts would be dropped, unless investors submits a request to keep the dispute open within six months once the law is approved for disputes worth EGP 100,000 or less and within one year for disputes above EGP 100,000.
They would either go for dispute settlement or pay a percentage of the disputed amount as follows: 10% of disputes involving amounts worth EGP 100,000, 25% of disputes ranging between EGP 100,000 and EGP 500,00, and 40% of disputes above EGP 500,000.