10 key facts about Egypt’s new tax reforms for startups and freelancers

The Egyptian government has introduced significant tax reforms to foster growth among startups, small businesses, and freelancers. Announced by Finance Minister Ahmed Kouchouk during the Digital Payments, Financial Inclusion, and Digital Banking Exhibition and Conference (PAFIX), these reforms aim to simplify tax compliance and create a supportive environment for entrepreneurship. Here's what you need to know about these key changes:

Businesses with annual revenues up to EGP 15 million will benefit from a simplified tax system. This initiative reduces complexity and encourages compliance by making the tax process more accessible to smaller enterprises and freelancers.

To support entrepreneurs, the reforms include exemptions from capital gains taxes and dividend taxes. This move is designed to increase profitability and encourage reinvestment in small businesses and startups.

Stamp duties and notarization fees, often burdensome for small entities, are being removed under the new tax regime. This change reduces costs for startups and freelancers during critical stages of business operations.

The frequency of VAT filings has been reduced, requiring only four annual submissions. This measure eases administrative burdens, allowing entrepreneurs to focus on growing their businesses rather than navigating complex tax processes.

Startups entering the new tax system will benefit from deferred tax audits for five years. This policy fosters a sense of security and trust, encouraging more small businesses to participate in the formal tax system.

Payroll tax filings will now be consolidated into a single annual reconciliation. This change reduces paperwork and streamlines compliance for businesses managing employee salaries and taxes.

To ease taxpayer concerns, sample-based audits are being reintroduced across all tax offices. This approach minimizes the compliance burden while maintaining accountability within the system.

By the end of the month, the government plans to roll out a centralized platform for managing tax liabilities and credits. This digital system aims to simplify interactions with the Egyptian Tax Authority, making it easier for businesses to meet their obligations.

The reforms highlight the government’s focus on digitalization. Automated financial and tax systems are generating data to improve service delivery, reduce delays, and enhance overall taxpayer experience.

By simplifying and unifying tax processes, the reforms are designed to attract new taxpayers, ease liquidity challenges, and create a more inclusive tax environment for entrepreneurs and investors.

These measures reflect Egypt's commitment to fostering a business-friendly ecosystem, empowering startups and freelancers, and encouraging economic growth through reduced administrative and financial burdens.