Egypt Tax Alert
Egypt's New Tax Reforms: Boosting Growth and Support for Small and Medium Enterprises
The Egyptian government has introduced a series of tax reforms aimed at supporting small and medium enterprises (SMEs) and fostering economic growth. These reforms are outlined in three new laws published on February 12, 2025. Law No. 5 of 2025 offers tax status settlement opportunities, allowing unregistered taxpayers to register without penalties and submit overdue tax returns without incurring late fees. It also provides options for settling tax disputes by paying a portion of the due tax and waives late payment fees for certain cases. Additionally, individuals involved in real estate or unlisted securities disposals can settle their taxes with exemptions from late fees. Law No. 6 of 2025 focuses on SMEs with annual revenues under EGP 20 million, offering tax exemptions, including exemptions on establishment fees, capital gains, and dividend distributions. The law introduces a reduced tax system based on turnover, along with simplified tax filing requirements, including the use of e-invoicing and simplified accounting records. Law No. 7 of 2025 amends the Unified Tax Procedures Law to enhance tax compliance and provide a clearer legal framework. It introduces a cap on late payment penalties, and allows tax offenses to be settled out of court for a reduced compensation amount, thus simplifying the tax process for businesses and individuals. These reforms are part of Egypt’s broader efforts to reduce tax-related barriers for SMEs, promote investment, and drive economic development.