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A draft law has been issued with regard to the amendment of some of the articles of income tax law no.91 of 2005. The law has not been issued yet.
Summary of the most important amendments that are not been issued by law and are authorized only.
• Grant the taxpayer an incentive of 15% on any amount paid till 31/12/2012 and 10% till 31/3/2013. The settlement of the amount are payable shall be taken in the following order, the taxes due and delay fine. After 31/12/2012, the order will be back according to the income tax law no. 91 of 2005.
• Amend the tax rates for the nature persons to be as follows:
More than LE 5,000 up to 20,000 10%
More than LE 20,000 up to 40,000 15%
More than LE 40,000 up to 1,000,000 20%
More than LE 1,000,000 up t0 10,000,000 22%
More than LE 10,000,000 25%
• The annual taxable income for the legal persons shall be subject to tax at a rate of 25%.
• Impose tax at a rate of 2.5% without any deduction on the gross revenues from the disposal of the real estate whether registered or not or within or without cities’ boundaries. The amount paid of this tax shall be deducted at the time of applying item [7] of article (19).
• The delay fines as stated in article (110) shall be applied as from the next day following to the expiration periods of the third and fourth paragraphs.
• The exemption of the profits and dividends of the funds is restricted to the investment in securities and the yield of the registered bonds.
• In case of changing the legal form, capital gains that are generated from the revaluation and all forms of mergers and splits shall be subject to tax.
• The projects, companies, establishments and branches that that are established according to the Law of Economic Zones that have special nature are obliged to withhold the tax due and file it to the tax office in the next working day following to the withholding date.
• Subjecting the treasury bills’ and bonds’ yields to the tax at a rate of 20% without any deduction. The yields payer has to withhold the tax due and file it to the tax office in the next working day following to the withholding date.
The withholding tax shall be offset from the tax due on the taxpayer according to the provisions of this article the treasury bills’ and bonds’ yields shall be part of the taxable income and reported in taxpayer’s financial statements. Also the amount of the withholding tax deducted should exceed the tax due.
• Criminalization of non – issuance of delivering the invoice to the buyer or service recipient. Adding a new paragraph concerning the criminalization to the article (135) of Penalties’ section.
• Imposing of a tax at a rate of 10% without any deduction on the profits which generate by the resident natural and legal persons and any permanent establishment by nonresident person which offer the securities for the first time in the secondary market as a result form selling stocks or quotes including acquiring or swap transactions at the time transaction exceeds 33% of capital or voting rights. The acquiring is considered one deal even it is made through several transactions if it is done by the buyer or related partied persons with twelve months. The capital gain is computed of the difference between the shares’ par value and the selling price.
• Cancelling of article (136) from penalties section and development article (87) bis in income tax returns section to avoid the legal procedures in case of violation the provisions of article (136) by the taxpayer. The tax office shall have the right to apply and collect fines(paying additional payments)for the final tax from the taxpayer, in addition to amend the percentages of collection to be: 10% of the tax that not been included by the taxpayer if the difference between the tax reported in the income tax return and the final tax if it is equivalent from 10% to 20% of the amount of the final tax.
20% of the tax that not been included by the taxpayer if the difference between the tax reported in the income tax return and the final tax if it is equivalent from 20% to 50% of the amount of the final tax.
30% of the tax that not been included by the taxpayer if the difference between the tax reported in the income tax return and the final tax it is exceed 50% of the amount of the final tax.
• Cancelling of item (b) of article (138) which is related to the reconciliation with violator tax taxpayer of the cancelled article (136).
• Development of article(147) bis which states to grant every person an exemption from payment all kind of taxes due(income tax & general sales tax) on his income generated whatever his capital , revenues or annual net income for the tax periods preceding the effective date of this law as well as the delay fines, penalties or additional taxes that are related to the mentioned tax due provided that the person has not been registered, filed an income tax return or had not been subjecting to an audit by tax office. Also the taxpayer shall file an income tax return or to be registered or to have a tax file with the Tax office with twelve months from the effective date of this law.
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