Egypt to Exempt EGX Capital Gains From Income Tax

Capital gains on securities listed on the Egyptian Exchange (EGX) will be exempt from income tax under a new package of tax amendments, with transactions instead becoming subject to a proportional stamp duty, according to the Egyptian Tax Authority (ETA).

The changes form part of a second package of tax facilities designed to encourage investment, stimulate activity on the Egyptian Exchange and simplify tax procedures.

According to Rasha Abdelaal, Head of the Egyptian Tax Authority, amendments to Income Tax Law No. 91 of 2005 and Stamp Duty Law No. 111 of 1980 also introduce cash incentives for companies that list their shares on the exchange, provided they meet specified eligibility criteria. The authority said the measures are intended to strengthen the competitiveness of the Egyptian Exchange and attract additional investment.

The amendments also introduce changes to the taxation of unlisted securities, which will be exempt from stamp duty and subject only to income tax. Market maker activities will no longer be subject to stamp duty in recognition of their role in supporting market liquidity, while a simplified mechanism will be introduced to determine the acquisition cost of unlisted securities, streamlining capital gains calculations and tax accounting.

Implementation of the new measures will be coordinated by the Ministry of Finance, the Egyptian Tax Authority, and the Financial Regulatory Authority.