According to recent reports, Egypt published Law No. 199 in the Official Gazette on 30 September 2020, which amends the Income Tax Law and the Stamp Tax Law in relation to the taxation of distributions and gains on securities, including measures in relation to the Egyptian Stock Exchange (EGX) approved by the Cabinet earlier in the year in response to the COVID-19 pandemic. The main changes made by the law are summarized as follows:

• New dividend withholding tax rules are introduced, including that dividends distributed to individuals and companies are subject to withholding tax at the following rates:
  • 10% when distributed by unlisted companies, including companies established in special economic zones; and
  • 5% when distributed by companies listed on the EGX;
• A withholding tax exemption is provided for stock dividends paid in the form of new shares;
• The tax on net profits realized by a permanent establishment in Egypt is increased from 5% to 10%, with net profits deemed to be distributed and subject to tax within 60 days after an establishment's financial year-end;
• New rules on remitting withholding tax are introduced, including that that tax withheld must be remitted using the designated form by the fifth working day of the month following the month in which tax is withheld;
• New rules are introduced for the taxation of capital gains from the disposal of securities:
  • for non-resident individuals and companies, capital gains realized from the disposal of securities listed on the EGX or from the disposal of treasury bills are exempted from tax, including an exemption for listed securities for the period 17 May to 30 September 2020;
  • for resident individuals and companies, a 10% tax rate is set on gains from the disposal of securities listed on the EGX, although the prior suspension of taxation until 31 December 2021 is maintained;
  • where tax on capital gains is imposed, the tax is included as part of the regular annual income tax return for residents, while non-residents are required to file to a specific form that will be prescribed;
• New rules are introduced regarding stamp tax:
  • stamp tax rates on gross proceeds from the sale of securities representing less than 33% of an entity's total capital are reduced from 0.15% to 0.125% for non-resident sellers/buyers and from 0.15% to 0.05% for resident sellers/buyers (0.3% rate for both the buyer and seller is maintained for disposals of at least 33%, regardless of residence);
  • stamp tax is maintained on sales of listed securities by resident individuals and companies until the end of the capital gains tax exemption (31 December 2021), after which such sales will be exempted from stamp tax; and
  • an exemption from stamp tax is provided on all spot transactions on the EGX.

The changes made by the law are effective from 1 October 2020.