Source: AL Mal News
The general session of the House of Parliament, led by Dr. Hanafi Gebali, will discuss tomorrow a report from the planning and budget committee on a proposed amendment to some provisions of the Income Tax Law issued by Law No. 91 of 2005, as well as modifications to some provisions of Law No. 182 of 2020.
The amendment aligns with the state's direction to promote investment and stimulate trading activity. If passed, this amendment could have significant implications for investors and traders, making it a crucial decision for the government and potentially impacting both local and foreign investors.
Here are some of the key points of the proposed amendment:
1- "The proposed amendment stipulates that capital gains subject to taxation will be determined based on the net value of these gains in the securities portfolio at the end of the fiscal year, taking into account the difference between the sale price, exchange price, or any other form of transaction involving securities or shares and their acquisition cost, after deducting brokerage commissions."
2-Capital gains would be taxed based on the net value of these gains in the securities portfolio at the end of the fiscal year.
3-The difference between the sale price, exchange price, or any other form of transaction involving securities or shares and their acquisition cost would be taken into account.
4-The rules for calculating acquisition costs for transactions involving securities traded on the Egyptian Stock Exchange will be determined in coordination with the Egyptian Financial Authority, according to the proposed amendment
5-Brokerage commissions would be deducted.
6-The proposed amendments have also tasked the executive regulations with determining the rules for calculating acquisition costs, in coordination with the Egyptian Financial Supervisory Authority, for transactions involving securities traded on the Egyptian Stock Exchange.
7-shareholders in companies that are listed on the Egyptian Stock Exchange (the initial offering) would be able to deduct 25% of the value of the realized capital gains from their taxable income.
8-The deduction would be available for a period of two years from the date of entry into force of the law in the first year 25% and 50% for the second year.
9-The amendments are designed to encourage investment in Egypt's capital markets and to make it easier for companies to raise capital through initial public offerings.
10-In the event that other tranches are offered according to an information memorandum or a disclosure report approved by the Financial Regulatory Authority after the first offering, 25% of the value of the realized capital gains will be added to the acquisition cost, regardless of the number of times the offering is, in order to reduce the tax burden on shareholders in these companies.
11-The provision also incentivized individual investors in the stock market by mandating a deduction of a percentage of capital gains on restricted shares traded on the Egyptian Stock Exchange. This deduction is equivalent to the deposit and lending rates announced by the Central Bank of Egypt on the first of January for the holding period of shares, provided that the cost of the rates does not exceed the cost of each share's profitability.
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