Egypt Announces Implementation of Stock Market Tax by 2022

The Official Gazette published Ministry of Finance Decision No. 428 of 2021 regarding the issuance of a guide to tax treatment rules for capital gains resulting from the disposal of securities, shares, treasury bills and stamp tax on dealing in securities.

The guide stipulates the start of applying a tax of about 10% on a separate base that includes the net profits of trading in the stock market, from January.

After reviewing the Income Tax Law promulgated by Law No. 91 of 2005, and the Executive Regulations of the Income Tax Law, the Minister of Finance decided that determining the tax treatment of capital gains resulting from the disposal of securities, shares, quotas, treasury bills and stamp tax on dealing in securities in accordance with For the rules and instructions contained in the accompanying guide.

The three-year period ends in which the market parties reached an agreement that was translated into a legislative amendment that included postponing the tax on capital gains from securities listed on the stock exchange until the end of 2021, with reducing the stamp tax on sales of securities of all kinds.

In 2017, the government approved the imposition of a gradual stamp tax on stock exchange transactions, starting at 1.25 per thousand on the seller and buyer in the first year of implementation, then 1.5 per thousand in the second year, to reach 1.75 per thousand in the third year of implementation, but the government stopped work the third tranche in July 2019 to continue at 1.5 per thousand during the third year.

With this amendment, the stamp tax was reduced to 0.5 per thousand borne by the resident seller, 0.5 per thousand borne by the resident buyer, and on foreign transactions to 1.25 per thousand instead of 1.5 per thousand borne by the non-resident seller, and the same borne by the non-resident buyer.

The amendments also abolished the imposition of stamp tax on same-day purchase and sale of securities.