Finance Minister Ahmed Kouchouk said the second package of tax incentives includes measures to prevent double taxation, notably by exempting dividend distributions for Egyptian companies affiliated with holding companies resident in Egypt.
The package also allows private-sector companies contributing to strategic projects to deduct interest on external loans from their taxable base. Additional measures include replacing capital gains tax with a stamp duty to stimulate investment and trading on the Egyptian Exchange, as well as offering tax incentives to encourage the listing of large and influential companies on the stock market for a three-year period.
Kouchouk made the remarks during a meeting with real estate developers, noting that the incentives are designed to ease tax burdens by simplifying procedures and fostering an environment of trust and certainty with the tax community.
He said the second reform package comprises 25 measures aimed at responding to the needs of compliant taxpayers and encouraging voluntary tax compliance.
The minister explained that the incentives cover a wide range of sectors, including real estate development. Addressing developers, he said: “We look forward to receiving your ideas on facilitating, simplifying, standardising and digitalising tax procedures. The real estate sector is a key driver of economic activity, and we are working with you to promote real estate exports.”
Kouchouk stressed the importance of establishing a joint high-level committee for the real estate development sector to review challenges and work towards practical solutions.
He also announced plans to launch a mobile application dedicated to real estate transactions, enabling notification and simplified payment of due taxes. He confirmed that the tax rate on real estate transactions for individuals will remain fixed at 2.5% of the unit’s sale value, regardless of the number of transactions, with no additional administrative burdens.
Kouchouk added that institutional reforms are under way to accelerate and simplify value-added tax refunds, improving liquidity for business partners.
The second package also includes incentives to encourage the voluntary closure of tax files for the 2023 and 2024 tax years under fixed and proportional tax systems, building on progress achieved in the previous year. In addition, the VAT rate on medical devices will be reduced from 14% to 5%.
Addressing concerns related to property tax, Kouchouk reassured developers that a separate incentive package is being approved to ease burdens on citizens. The proposed measures include allowing the cancellation of property tax during times of crisis, raising the exemption threshold for private residences to EGP 4m, enabling electronic payment of property tax, waiving late-payment penalties in specific cases, capping penalties at no more than the original tax due, and reforming and simplifying the appeals mechanism.
