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Egypt To Tax Stock Market Transactions

by Lorys Charalambous, Tax-News.com, Cyprus

12 November 2012


Egyptian Finance Minister Momtaz-El-Said has announced government approval of a capital gains tax (CGT) on profits realized on the stock exchange.

According to the minister, the 10% CGT rate will apply only to initial transactions of any security in the secondary market following the initial public offering (IPO).

The finance minister has not given a time frame for the new tax and has said that it is still in its draft phase and would have to be approved by the president or by parliament if one is elected in time.

At this stage, it is anticipated that the tax will only apply to corporations; all individual trading will be exempt.

However, the government has also announced two new income tax brackets on high-income individuals; a 22% levy on individuals earning between EGP1m (USD163,000) and EGP10m per year and a 25% tax on annual incomes higher than EGP10m.

Egypt is currently negotiating a USD4.8bn loan from the International Monetary Fund (IMF) to shore up its finances following last year’s popular uprising. El-Said reported that “The talks with the IMF technical team have been extremely positive”.

TAGS: individuals | capital gains tax (CGT) | tax | investment | business | capital markets | equity investment | stock exchanges | tax rates | Egypt | individual income tax

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