The Ministry of Finance of Egypt has published a new guide to help companies understand the latest tax reforms on Saturday, April 26, according to a statement published on the Ministry page.
The document describes that it qualifies under the updated tax code, explains the key responsibilities, highlights the possible sanctions and details the new dispute resolution process. It also presents a section of frequent questions and ideas of prominent business leaders.
The measure is part of a broader effort of Egypt to simplify tax payments for small businesses. Last week, President Abdel Fattah al-Sisi signed three new laws aimed at optimizing tax procedures, relieving the presentation process and providing clearer mechanisms to solve disputes.
The new laws seek to replace a variety of rates imposed by the Government with a single tax on net gains, as part of the broadest efforts to improve the business environment and attract more investments.
What you need to know about tax reforms
The new fiscal system of Egypt for small companies introduces a direct approach based on billing, which means that companies will now be taxed on their total income instead of navigating complicated expenses. The objective is to make tax payments simpler, faster and more transparent.
If your business wins up to EGP 500,000 (USD 9,783.80) per year, you will pay a tax rate or 0.4 percent. For income between EGP 500,000 and just under EGP 1 million (USD 19,708,59), the rate increases slightly to 0.5 percent. Companies that bring between EGP 1 million and EGP 2 million (USD 39,417.18) will be taxed annually at 0.75 percent.
If their income falls between EGP 2 million and EGP 3 million (USD 59,125.77), the tax rate will be 1.0 percent. Those who win between EGP 3 million and EGP 10 million (USD 197.085.89) will face a rate of 1.25 percent, while companies that make between EGP 10 million and EGP 20 (USD 394,171,78) will be taxed at 1.5 percent.
The new system aims to reduce administrative burns for small businesses and create a fairer environment for entrepreneurs throughout the country.
How to qualify for new tax rates
To take advantage of the new tax rates, companies with annual revenues of up to EGP 20 million must follow some important steps. First, they must officially create an account on the website of the Fiscal Authority of Egypt and submit a request to opt for the new system.
It is also essential to keep abreast of the terms of submission of tax declarations and register with the Government’s digital platforms, including electronic invocation and electronic reception systems, which can be found on the website of the Egyptian tax authority.
After registering, companies must use government digital platforms to send the entire paperwork agreement required to the deadlines established by the Ministry of Finance.
