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Egypt amends Income and Stamp Tax Laws - Ernst …

Executive summaryThe Egyptian Government has enacted Laws No. 76 and 82 of 2017, introducing certain amendments to the Income Tax Law No. 91 of 2005 and the Stamp Tax Law No. 111 of 1980. This Alert summarizes the key features of the new discussionSuspension of capital gains tax on listed securitiesThe suspension of tax on capital gains resulting from trading in securities listed in the stock exchange is extended for a period of three years ending on 16 May on deferral of capital gains tax from the revaluation of Egyptian entity because of change in legal structureRevaluation of Egyptian entities resulting capital gains arising from changes in the legal structure of corporate entities stipulated in Article (53) of the Income Tax Law No. 91 of 2005 are amended to cancel the following two items:13 July 2017 Global Tax AlertEgypt amends Income and Stamp Tax LawsEY Global Tax Alert LibraryAccess both online and pdf versions of all EY Global Tax into your web Tax Alert Acquisition of 33% or more of the shares or voting rights in terms of number or value of a residential company against shares of the acquired company.

Executive summary The Egyptian Government has enacted Laws No. 76 and 82 of 2017, introducing certain amendments to the Income Tax …

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Transcription of Egypt amends Income and Stamp Tax Laws - Ernst …

1 Executive summaryThe Egyptian Government has enacted Laws No. 76 and 82 of 2017, introducing certain amendments to the Income Tax Law No. 91 of 2005 and the Stamp Tax Law No. 111 of 1980. This Alert summarizes the key features of the new discussionSuspension of capital gains tax on listed securitiesThe suspension of tax on capital gains resulting from trading in securities listed in the stock exchange is extended for a period of three years ending on 16 May on deferral of capital gains tax from the revaluation of Egyptian entity because of change in legal structureRevaluation of Egyptian entities resulting capital gains arising from changes in the legal structure of corporate entities stipulated in Article (53) of the Income Tax Law No. 91 of 2005 are amended to cancel the following two items:13 July 2017 Global Tax AlertEgypt amends Income and Stamp Tax LawsEY Global Tax Alert LibraryAccess both online and pdf versions of all EY Global Tax into your web Tax Alert Acquisition of 33% or more of the shares or voting rights in terms of number or value of a residential company against shares of the acquired company.

2 Acquisition of 33% or more of the assets and liabilities of a residential company by another residential company against shares in the acquired , there will be capital gain tax resulted from share swap transactions or shares against assets & liabilities at a rate of for non-listed shares and no deferral of tax will be valid. However, capital gain tax will be suspended for listed shares until 16 May above shall be applied starting as of 20 June duty on the purchase or sale of securitiesArticle 83 Bis was added to the Stamp Tax Law No. 111 of 1980, and stipulates that: A proportional Stamp duty shall be imposed on the purchase or sale of all securities whether such securities are Egyptian or foreign securities, listed or unlisted without deducting any costs as follows: per thousand to be borne by both seller and buyer and divided between both equally as of 20 June 2017 until 31 May 2018.

3 3 per thousand to be borne by seller and buyer and divided between both equally as of 1 June 2018 until 31 May 2019. per thousand to be borne by both seller and buyer and divided between both equally as of 1 June duty on acquisition and sale of the same transactionArticle 83 Bis 1 was added to the Stamp Tax Law No. 111 of 1980, which stipulates that:A. A proportional Stamp duty shall be levied on both the acquisition and sale of the same transaction per one of the following conditions: If the transaction involves 33% or more of the shares in terms of the value or voting rights in terms of number for a resident company. If the transaction involves 33% or more of the assets of the resident company or its liabilities of transaction by another resident company in return for or against shares in the buy side seller and buyer shall bear the tax burden of three per thousand of the value for the transaction without deducting any If the total of purchases or sales of securities that is already done by a person for one target company, where commencement of the acquisition or of the sale is within two years from the date of issuance of the first purchase; subsequently in this case, the acquisition or sales whichever occurs will be subject to three per thousand to be borne by seller and the same for the buyer where reaching the acquisition or sale limit of 33% or more.

4 This is after taking into consideration deduction for any tax paid previously. This tax shall not be considered as a deductible cost from the corporate tax pool. Misr for Central Clearing, Depository & Registry Company (MCCDR) or any other entity responsible for the settlement of the transactions is liable by withholding related tax and to be deducted and remitted to the tax authority. MCCDR or the responsible party for settlement will be responsible jointly with seller or buyer for such tax along with any related Income tax ratesThe Income tax rates on the Income of natural persons have been amended to reduce the tax burden on low Income amended Income tax rates on the annual personal incomes are: First bracket Incomes up to EGP7,200 (US$400); exempt from tax. Second bracket Incomes from EGP7,201 (US$401) up to EGP30,000 (US$1666); taxed at 10%; applying a discount (80%) of the tax.

5 Third bracket Incomes from EGP30,001 (US$1667) up to EGP45,000 (US$2,500); taxed at 15%; applying a discount (40%) of the tax. Fourth bracket Incomes from EGP45,001 (US$2,500) up to EGP200,000 (US$11,111); taxed at 20%; applying a discount (5%) of the tax. Fifth bracket - Incomes more than EGP200,001 (US$11,111); taxed at Tax Alert3 The discount shall be applied on the highest Income bracket of the taxpayer. The tax due is to be calculated at the rate noted for each bracket, then for those taxpayers whose Income is within the second bracket, the discount rate will be (80%) from the tax due, for those whose Income is in the third bracket, the discount rate will be 40%, and for those whose Income is in the fourth bracket, the discount rate will be (5%). Finally, for those whose Income is in the fifth bracket, no discount is executive regulation of Law no.

6 82/2017 will clarify the methodology of the new rates are applied: For salary taxpayers, starting from 1 July 2017. For commercial, industrial and manufacturing (sole partnership), professional, noncommercial or real estate taxpayers, starting from 1 January additional information with respect to this Alert, please contact the following: Ernst & Young ( Egypt ), Cairo Sherif El-Kilany +202 272 60121 Ahmed El-Sayed +202 272 60265 Hossam Nasr +202 272 60265 Maissa Zidan +202 272 60265 Nesreen Maher +202 272 60265 Ahmed Hegazy +202 272 60265 Hany El-Gamal +202 272 60265 Ahmed Abo El Fotouh +202 272 60260 & Young LLP, Middle East Desk, Houston Gareth Lewis +1 713 750 1163 | Assurance | Tax | Transactions | AdvisoryAbout EYEY is a global leader in assurance, tax, transaction and advisory services.

7 The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit 2017 EYGM Limited. All Rights no. 04185-171 Gbl1508-1600216 NY ED NoneThis material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice.

8 Please refer to your advisors for specific


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