Egypt has introduced wide-ranging income tax amendments covering capital gains, dividends, interest deductibility, bad debts, EGX listings and small enterprises under Law No. 151 of 2026, effective from 29 July 2026.
Egypt has amended its income tax framework through Law No. 151 of 2026, introducing changes to capital gains, dividend taxation, interest deductibility, bad debt recognition, stock exchange listings and tax treatment for small enterprises.
The law was published on 28 July 2026 and took effect on 29 July 2026, the day after its publication in the Official Gazette. It amends provisions of the Income Tax Law issued under Law No. 91 of 2005.
Capital gains and real estate
The law retains the 2.5% tax on the gross value of specified real estate and land disposals, without deductions, except for properties in villages. The tax applies to various forms of disposal, including sales, bequests, donations and gifts, subject to the stated exemptions.
The disposer must pay the tax within 60 days of the transaction. Delay interest under Article 110 starts from the day after this period expires.
Non-residents disposing of unlisted shares or securities must also calculate and pay capital gains tax within 60 days of the transaction. Gains from disposing of Treasury Bills by non-residents are exempt.
The law also provides an exemption for certain disposals made as an in-kind share in the capital of joint-stock companies, where the relevant shares are not disposed of for at least five years.
Dividend taxation
The withholding tax on dividends remains 10%, with a reduced rate of 5% applying to dividends from EGX-listed shares.
A new exemption replaces the previous 90% participation exemption. Dividends received by a parent or holding company from a resident or non-resident subsidiary are fully exempt where the parent owns at least 25% of the subsidiary’s capital or voting rights and has held, or commits to hold, the participation for at least 2 years.
Dividend withholding tax must generally be withheld and remitted within 5 business days of the month following the month of collection.
Interest deductibility
The law tightens the general thin capitalisation limit by reducing the debt-to-equity ratio from 3:1 to 2:1. Accordingly, interest on debt exceeding twice the average equity is not deductible for the purposes specified under the law.
A higher 4:1 ratio is available to legal entities using unrelated-party borrowing to finance designated national infrastructure projects, subject to conditions including a minimum 25% contribution by the entity to the project’s total investment.
Banks, insurance companies and specified financing companies remain outside these debt-to-equity restrictions.
The law also provides a tax exemption for certain interest on loans or credit facilities obtained from unrelated parties to finance national infrastructure projects, subject to conditions including a loan term of at least five years and the company’s participation representing at least 25% of total investment.
EGX listing incentive
Companies listing shares on the Egyptian Exchange (EGX) can receive a 15% income tax deduction for three years from the date of listing.
The incentive applies where the offering meets specified thresholds, including a minimum fair market value of 50 billion EGP and either an offering representing at least 20% of the company’s capital or offered shares valued at least 10 billion EGP.
The incentive is available once during the company’s lifetime and generally cannot be combined with other tax incentives. The Minister of Finance may extend it for an equivalent period in coordination with the Financial Regulatory Authority (FRA).
Small enterprise tax treatment
The amendments introduce simplified turnover-based treatment for enterprises with annual turnover of no more than 10 million EGP for specified non-final tax liabilities covering tax periods beginning in 2022 and ending before March 2025.
For enterprises with turnover between 1 million EGP and 10 million EGP, the applicable rates range from 0.5% to 1% of turnover, depending on the turnover bracket.
Enterprises with turnover of up to 1 million EGP are subject to fixed annual amounts ranging from 250 EGP to 5,000 EGP, depending on turnover.
The law also waives unpaid capital gains tax arising from disposals of EGX-listed shares during the period from 16 June 2023 until 29 July 2026.
Bad debt rules
Law No. 151 of 2026 also changes the conditions for recognising bad debts. An establishment generally must have taken serious recovery measures and failed to collect the debt for 12 months after its maturity date.
These measures can include obtaining a court performance order, securing a first-instance court ruling requiring repayment, or claiming the debt during bankruptcy proceedings or protective conciliation.
Debts not exceeding 10,000 EGP per debt are exempt from these requirements where the total qualifying bad debts do not exceed 1% of the taxpayer’s total debtor balance at the end of the tax year.
The amendments also allow the cooperative contribution stipulated under the Comprehensive Health Insurance Law to be deducted from the tax base.
The law repeals several provisions of the Income Tax Law, including Article 18, Articles 39 bis, 46 bis (5), 46 bis (7), and 49 bis, as well as Article 7 of Law No. 30 of 2023.
