On 15 August 2018, the Egyptian Government has issued new Law no. 174 of 2018 (the Law) that reduces late payment interest and penalties by a certain percentage based on the payment day of the taxes due. The law introduces 90% reduction on interest and penalties if paid by 12 November 2018, a 70% reduction if paid by 27 December 2018, and a 50% reduction if paid by 10 February 2019.
The Law also provides for the close of the tax dispute settlement process effective 31 December 2018. The process, first introduced in 2016 and subsequently extended, allows taxpayers to submit and settle tax disputes through independent committees separate from the tax authority, instead of going through the courts.
Law no. 174 of 2018 has shortened the period for submitting disputes to the dispute resolution committee. Applications to finalize tax disputes will cease on 31 December 2018, and applications submitted after that date will not be accepted.
However, Law no. 174 has extended the scope of the dispute resolution committee to include existing customs disputes, as well as disputes submitted in the courts or the arbitration committees during the period from 15 August 2018 to 31 December 2018.
The Law reduces the late payment interest, additional taxes and penalties specified in the following laws:
· Stamp duty law no. 111 of 1980
· Income tax law no. 157 of 1981 as amended
· State development law no. 147 of 1984
· Sales tax law no. 11 of 1991
· Income tax law no. 91 of 2005
· Value added tax (VAT) law no. 67 of 2016
