Law No. 17 for year 2015

Brief introduction

  • During the period from thirteenth of March 2015 to the fifteenth of March 2015, Egypt embraces the events of Conference on Support and Development of Egyptian Economy. Therefore, the president of the republic has issued a set of laws and legislations aiming at encouragement of investors attending at the conference to bring and increase their investments in Egypt.
  • Law No. 17 for year 2015 is considered the most important of these legislations, which stipulates on amendment of some law provisions related to the investment process; i.e. the Income Tax Law No. 91 for year 2005 and its executive bylaws; the law of Joint Stock companies, companies Limited By Shares, and Limited Liability companies No. 159 for year 1981; the law on Investment Incentives and Guarantees; and General Sales Tax Law No. 11 for year 1991.
  • And Law No. 18 for year 2015 regarding issuance of Civil Service Law, which stipulates that the civil jobs are right for citizens on basis of efficiency and eligibility; it is an assignment for service of people, while the State guarantees their rights, protection, and performance of their duties of caring for people interests.
  • And Law No. 16 for year 2015 that sanction upon some amendments on the provisions of Criminal Procedures Law issued by law No. 150 for year 1950.

Amendments of the associated law on provisions of Income Tax Law No. 91 for year 2005 and its executive bylaws.

Number of Article at Law No. 17 for year 2015 Text of Article at Law No. 91 for year 2005 before amendment Text of Article at Law No. 17 for year 2015 after amendment
Article (6) Article (27) deducts a percentage of 30% from the costs of machinery and equipments used in investment in the field of production; whether new or used; that is at the first tax period in which these assets are used. Depreciation is calculated as stipulated in article 25 of this law for that period after deduction of the said 30%. Enforcement of the provisions stipulated in the two paragraphs above require that the taxpayer keeps regular books and accounts. Article (27) Upon request by the taxpayer, it is permitted to deducts a percentage of 30% from the costs of machinery and equipments used in investment in the field of production; whether new or used; that is at the first tax period in which these assets are used. Depreciation is calculated as stipulated in article 25 of this law for that period after deduction of the said 30%. Failure to provide the said request, ratios of depreciation stated in articles (25 & 26( of this law shall be applicable.
Article (7)

Article (53) in case of change in the legal status of one or more legal person; the statement of profits and losses shall include the capital profits and losses resulting from reevaluation, provided that assets and liabilities are recorded in their book value at time of legal status amendment for purposes of tax calculation. Depreciation of assets and forward of allocations and reserves in accordance with the rules set forth prior to conclusion of that amendment. The legal status amendment includes the following in particular:

  1. Merge of two or more existing companies.
  2. Division of an existing company into two or more companies.
  3. Transfer of individual companies into money companies, or transfer of a money company into another money company.
  4. Purchase or acquisition of 50% or more of shares or voting rights; either in terms of number or value at an existing company against shares in the purchased or acquired company.
  5. Purchase or acquisition of 50% or more of assets and liabilities at an existing company against shares in the purchased or acquired company.
  6. transfer of a legal person into a money company.

Article (53) in case of change in the legal status of one or more legal person; the statement of profits and losses shall not include the capital profits and losses resulting from reevaluation, provided that assets and liabilities are recorded in their book value at time of legal status amendment for purposes of tax calculation. Depreciation of assets and forward of allocations and reserves in accordance with the rules set forth prior to conclusion of that amendment. The legal status amendment includes the following in particular:

  1. Merge of two or more existing companies.
  2. Division of an existing company into two or more companies.
  3. Transfer of individual companies into money companies, or transfer of a money company into another money company.
  4. Acquisition of 33% or more of shares or voting rights; either in terms of number or value at an existing company against shares in the acquired company.
  5. Acquisition of 33% or more of assets and liabilities at an existing company against shares in the acquired company.
  6. Transfer of a legal person into a money company.

 

Amendments of the associated law on provisions of General Sales Tax Law No. 11 for year 1991 and its executive bylaws.

Number of Article at Law No. 17 for year 2015 Text of Article at Law No. 91 for year 2005 before amendment Text of Article at Law No. 17 for year 2015 after amendment
Article (2) Article (3) tax assessment on goods shall be 10%, save for goods listed in table 1 enclosed herewith which tax rate shall be as determined for each item respectively.Table (2) enclosed hereto set forth the tax rate applicable on service.It is permitted, by virtue of a resolution by the president of the republic to exempt some goods from sale and to modify the tax rate applicable over some goods. Moreover, the president of the republic may amend the two tables 1 & 2 enclosed. In all cases, the resolution of the president of the republic shall be submitted to the people's parliament within fifteen days from date of issuance if the parliament is convenable; otherwise by the beginning of the subsequent cycle. If the parliament refuses its sanction, its impact shall be void, however it becomes enforceable upon previous period.
Article (3) tax assessment on goods shall be 10%, save for goods listed in table 1 enclosed herewith which tax rate shall be as determined for each item respectively.Table (2) enclosed hereto set forth the tax rate applicable on service.Tax rate for machinery and tools used in production shall be 5%.It is permitted, by virtue of a resolution by the president of the republic to exempt some goods from sale and to modify the tax rate applicable over some goods. Moreover, the president of the republic may amend the two tables 1 & 2 enclosed. In all cases, the resolution of the president of the republic shall be submitted to the people's parliament within fifteen days from date of issuance if the parliament is convenable; otherwise by the beginning of the subsequent cycle. If the parliament refuses its sanction, its impact shall be void; however it becomes enforceable upon previous period.
Article (2)

Article (31)Tax shall be refunded according to the terms, conditions, and limits stipulated in the executive bylaws not later than three months from date of submission of an application in the following cases:

  1. The tax previously collected for exported goods, whether exported in its condition or registered in account of other goods.
  2. The tax collected by error, by virtue of a written letter submitted by the competent person.

Article (31)Tax shall be refunded according to the terms, conditions, and limits stipulated in the executive bylaws not later than three months from date of submission of an application in the following cases:

  1. The tax previously collected for exported goods, whether exported in its condition or registered in account of other goods.
  2. The tax collected by error, by virtue of a written letter submitted by the competent person.

Furthermore, tax on machinery and tools used in production of goods or performance of a taxable service shall be refunded by submission of first tax return.

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