Egypt’s Ministry of Finance had outlined a package of tax, VAT, real estate and customs measures in the 2026/2027 Citizen Budget. The measures had included lower VAT on medical devices, expanded exemptions, investment incentives, faster tax refunds and customs clearance reforms.
Egypt’s Ministry of Finance (MoF) had published the 2026/2027 Citizen Budget on 19 September, outlining measures covering income tax, VAT, real estate tax, tax administration and customs. The package had focused on supporting healthcare, investment and business activity while encouraging tax compliance and simplifying administrative procedures.
Income tax and investment incentives
The Citizen Budget had proposed changes to the taxation of stock exchange transactions, including replacing capital gains tax on stock exchange trading with Stamp Duty.
For non-resident investors, the Stamp Duty rate had been reduced to 0.5 per thousand from 1.25 per thousand.
A three-year tax incentive had also been proposed to encourage companies to list on the Egyptian Exchange (EGX). For unlisted securities held for three years, an incentive equivalent to the Central Bank’s discount rate would be added to the acquisition cost when the securities were disposed of.
The measures had also addressed dividend taxation by providing for dividend distribution tax to be collected only once between holding and subsidiary companies resident in Egypt, preventing double taxation.
Companies contributing to national infrastructure projects had been eligible for additional incentives, including a higher approved deductible limit for debit interest on corporate loans and an exemption from foreign withholding tax on international loans and credit facilities.
VAT measures
The budget had reduced the VAT rate on medical devices and equipment to 5% from 14%. The measure had been intended to support the healthcare sector and align with the rollout of Phase 2 of the Universal Health Insurance System.
It had also provided full VAT exemptions for inputs used to manufacture kidney dialysis machines, dialysis filters, spare parts and related supplies, as well as inputs used to manufacture prosthetic devices, body implants and deficiency-compensating devices.
Services provided on goods in transit had also been exempted from VAT, covering transit trade and services performed on such goods.
In addition, companies providing non-banking financial services had been granted a full VAT exemption, regardless of their governing regulatory body. Financial services provided by the National Postal Authority (Egypt Post) had also been excluded from VAT.
The suspension of VAT payment on machinery and equipment used in industrial production, including medical machinery, equipment and devices, had been extended to four years from two years.
The measures had also provided for faster VAT refunds, including immediate refunds for compliant taxpayers included on a new White List.
Tax refunds and simplified regime
The budget had proposed reducing the refund period for tax credit balances older than three months for projects under the simplified tax regime to three months from six months. The refund period for other businesses had also been shortened to three months.
A temporary eight-month tax card had been proposed to facilitate and accelerate business incorporation and licensing.
The simplified flat-tax system for small businesses and taxpayers with annual turnover of up to EGP 20 million had been continued, with the government targeting the inclusion of 100,000 new taxpayers.
Real estate tax measures
Real estate disposal tax had remained at 2.5% of the property sale value for individuals, regardless of the frequency of transactions.
Transfers or disposals of property between spouses, parents, children and direct descendants had been granted a 100% exemption.
The payment period for real estate disposal tax had been extended to 60 days from the transaction date, compared with 30 days previously. A dedicated mobile application had also been planned for real estate disposal tax filings.
For property tax, the exemption threshold for a taxpayer’s primary residential unit had been raised to EGP 8 million from EGP 2 million.
The measures had also provided real estate tax relief where emergency circumstances or force majeure prevented an owner from using or benefiting from a property. The relief would apply from the date the event occurred rather than from the date an application was submitted.
Late-payment penalties had been capped so that total delay penalties could not exceed the principal tax debt. In disputed assessments, the tax payable would be calculated based on the Appeal Committee’s decision rather than the initial tax office assessment.
Compliance and tax administration
The budget had proposed a Tax Excellence Card for compliant taxpayers, providing priority services and administrative benefits.
A new White List had also been planned for compliant taxpayers eligible for expedited VAT refunds. In addition, three specialised high-service tax centres had been planned, including centres in New Cairo and New Alamein.
The measures had sought to facilitate the write-off of small uncollectible tax debts and reduce procedural burdens on financing firms.
The Tax Dispute Settlement Law had been renewed through December to allow taxpayers to voluntarily resolve outstanding tax disputes.
Egypt had also planned rules covering transfer pricing, international tax compliance, information exchange and preventing profit shifting. The electronic payroll system was to be expanded to cover all private sector companies.
Customs reforms
The Citizen Budget had also included measures to facilitate the clearance of transit shipments passing through Egyptian ports.
Exceptional customs clearance procedures would allow transit cargo to complete customs procedures without prior registration on the Advance Cargo Information (ACI) system.
The government had also planned a three-hub customs approach focused on simplification, strengthened oversight and reduced release times, in cooperation with the Ministry of Investment and Foreign Trade.
The measures outlined in the 2026/2027 Citizen Budget had therefore covered tax relief, investment incentives, compliance initiatives and administrative reforms across Egypt’s tax and customs systems. The package had also placed emphasis on healthcare-related VAT relief, faster refunds, simplified procedures and improved customs clearance for transit trade.
