Egypt Eyes New Tax on Local Firms Profiting Abroad

What is happening? PWC, a MENA tax partner, announced that the Egyptian government is considering imposing taxes on local companies that generate revenues from abroad while avoiding double taxation.

Sherif Shawky, Senior Partner for Tax in Egypt, Kuwait and Libya at PwC, explained in an interview with Alarabiya Business that PwC presented a comprehensive vision to the Egyptian government regarding how to implement this new initiative. 

Why does this matter? Shawky explains that this initiative is necessary amid the increasing expansion of Egyptian companies to foreign markets. Thus, he stressed the need for clear regulations to govern tax obligations while ensuring the fair distribution of tax burden.  Furthermore, this is also to safeguard Egypt’s financial rights and prevent the loss of state revenues. 

On a Global Level Shawky points out that Egypt needs to take clearer steps to tax multinational companies in line with the OECD’s ‘Pillar 2’. The Organization for Economic Cooperation and Development (OECD)’s Pillar 2’  imposes a global minimum tax rate of 15%. This in order to prevent companies from shifting their profit to low tax areas.

Capital Gain and Real Estate

What’s Next? 

• The government is reviewing capital gains tax regulations and digital economy taxation.


• Proposed real estate tax changes could triple revenues, surpassing EGP 24 billion

Capital Gains Tax PwC’s Senior Partner for Tax highlights the challenges in Egypt’s capital gains tax, particularly under Law No. 30 of 2023. The law imposes a tax on cash dividends  from companies listed on the Egyptian Stock Exchange at a rate of 5% while unlisted companies are subject to 10%. 

In April 2024, the Egyptian Tax Authority, confirmed that investors are not liable to pay capital gains tax from the disposal of securities listed on the stock exchange. Thus, the authority issued executive instructions to ensure compliance across tax centers, regions and tax offices.

Shawky adds that Egyptian authorities are revising executive regulations to ensure a more equitable and transparent tax system. One which balances tax compliance with investment incentive to create a stable and attractive investment environment for local and foreign capital. Additionally, work is underway to review and amend stamp tax provisions to align with economic and legislative development. 

Real Estate Tax Shawky reveals that the proposed amendments to the real estate tax could triple tax revenues within a year, possibly excessive EGP 24 billion. This would include facilitations to ease tax payments aiming to increase tax contributions without imposing new taxes. Instead, the government seeks to regulate and integrate the informal sectors’ businesses and entities. 

Digitization and Digital Economy

Digital Economy Shawky points out that global companies like Youtube, Uber, Netflix and Talabat rely entirely on digital platforms for their operations. Thus, he argues that this necessitates reformulating the tax framework to align with their business model. This includes strengthening mechanisms for tracking digital revenues, adopting electronic payment solutions that facilitate tax payments for companies, and developing data analysis tools to ensure accurate taxation of e-commerce revenues. 

Digitization On the topic of digitization, the PwC Tax Partner, emphasized the importance of modernizing the customs system and electronically linking it to the Ministry of Finance’s tax system. This would improve efficiency, streamline procedures, encourage export and maximize available tax exemptions. 

He further points out that the Egyptian government is considering new measures for tax collection such as amendments to stamp duty and custom taxes. Additionally,this would include digitization and automation to reduce tax evasion, expand tax base, simplify compliance, enhance oversight and support data-driven tax decisions.