Amendment to Stamp Duty and the Capital Gains Tax on Sale of Shares and Dividends Tax
Law No. 199/2020 was issued on 30 September 2020 to amend the stamp duty and the capital gain tax on sale of shares as well as the dividends tax. The law is effective as of the 1st of October 2020.
Capital Gains Tax
For tax residents, the capital gains realized from the disposal of listed shares are subject to capital gain tax at the rate of 10%. However, this tax is suspended until the end of 2021.
For non-residents, the capital gains realized from the disposal of listed shares shall be permanently exempt from the capital gain tax.
Stamp duty tax
Stamp duty tax that is imposed on buying and selling securities and shares is reduced as following:
- 0.125% on the proceeds realized by the non-resident from selling or * buying the securities instead of 0.15%.
- 0.05% on the proceeds realized by the Egyptian resident instead of 0.15%.
- All spot transactions on the EGX will be exempt.
Stamp duty tax on proceeds from sale of listed shares will not apply on Egyptian tax residents starting from 1 January 2022, (i.e. after the suspension period of the capital gain tax exemption for listed shares) mentioned above.
Dividend distributions by unlisted companies are now subject to a 10% withholding tax, while dividends made by listed companies are subject to a 5% rate regardless of whether the recipient holds more than 25% of the subsidiary’s shares or not as was previously required.