Egypt has introduced legislative amendments to exempt capital gains on listed securities from income tax, subjecting them solely to a proportional stamp duty, the head of the Egyptian Tax Authority announced.
The move aims to enhance the competitiveness of the stock market and attract further investments. Rasha Abdel Aal, head of the Egyptian Tax Authority, stated that the changes to Income Tax Law No. 91 of 2005 and Stamp Duty Law No. 111 of 1980 also introduce cash incentives for companies that list their shares on the Egyptian Exchange in accordance with specific criteria.
The amendments address several tax files related to the stock market, primarily resolving double taxation on dividend distributions. Conversely, transactions involving unlisted securities will be excluded from stamp duty and subject only to income tax to achieve tax justice and completely eliminate double taxation.
Abdel Aal added that the amendments exempt “market maker” activities from stamp duty, citing their important role in increasing trading volumes and enhancing liquidity within the Egyptian Exchange.
Furthermore, a clear and simplified mechanism has been introduced to determine the acquisition cost of unlisted securities. This aims to facilitate the calculation of capital gains tax resulting from their disposal, simplify tax accounting procedures, and provide greater clarity for investors.
The measures form part of a second package of tax facilities. Abdel Aal noted that the Ministry of Finance, the Egyptian Tax Authority, and the Financial Regulatory Authority are coordinating to implement these policies following directives from Finance Minister Ahmed Kouchouk to encourage investment and support compliant taxpayers.
