In 2014, the government of Egypt released a series of significant tax changes in recent months that could significantly affect the taxation of foreign investors in the country. These changes include a new tax on dividends, with differing application for resident and non-resident individuals and corporate bodies.
KPMG in Egypt has confirmed that, for corporate bodies, the dividend tax will apply at the rate of 10 percent, with no deductions. A lower tax rate of 5 percent applies where ownership in the distributing entity exceeds 25 percent of the share capital or voting rights, provided the participation is held for minimum 2-year period.
On 16 December 2014, the President of Egypt signed an amendment1 requiring joint stock companies and corporate bodies to settle the corporate tax liability by electronic means. Electronic payments will be made according to the provisions of the executive regulations, which are not yet released.
The changes apply as of 17 December 2014. However, tax authority representatives have indicated that the law will be implemented as of February 2015.
1Law No. 201 for 2014, which amended Income Tax Law No. 91 for 2005.