A country’s tax system, which is an outcome of tax policy, plays a significant role in the overall fiscal policy.
Egypt introduced its first tax law in 1939 which imposed taxes on business and labor gains (i.e. Law No. 14 of 1939) and on agricultural land (i.e. Law No. 113 of 1939).Other tax laws were issued in the subsequent years.
The Egyptian Government has adopted a new income tax law as from June 2005. Now, all companies are equal under the law, new tax holidays and special exemptions were eliminated, and the rules for multinational companies were improved.
Egypt now uses a definition of permanent establishment; new rules for transfer pricing and thin capitalization are in place.