Introduction to Law No. (5) of 2025:
As Egypt embarks on a significant legislative journey with the introduction of Law No. (5) of 2025, effective from March 1, 2025, taxpayers are poised to benefit from a comprehensive tax amnesty program. This law aims to encourage registration with the Egyptian Tax Authority (ฮฮคฮ) and facilitate the resolution of outstanding tax disputes, providing a crucial opportunity for individuals and businesses alike to align their tax obligations without facing heavy penalties.
The law presents various incentives, including a waiver of financial penalties for unregistered taxpayers and a structured approach to settling
disputes arising from tax inspections. By promoting compliance and easing the burden of historical tax liabilities, this initiative seeks to enhance the
overall tax environment in Egypt.
In this blog, we will delve into the key provisions of Law No. (5) of 2025, detailing how it aims to transform the landscape of tax compliance and enforcement, and explore the potential implications for taxpayers across the nation. Whether you are a business owner, an individual taxpayer, or simply interested in the evolving tax framework in Egypt, understanding this new law is essential as we navigate this pivotal moment in the countryโs fiscal policy.
Summary of Law No. (5) of 2025, Effective March 1, 2025
Tax amnesty for the unregistered at the Egyptian Tax Authority :
They will not face inspections concerning income tax, VAT, stamp tax, and the State’s financial resources development duty for the years prior to their registration, up until February 12, 2025. This is contingent upon submitting the registration requests for income tax and VAT in accordance with the law’s registration requirements within a three-month period, specifically by May 12, 2025
Encouraging the submission of the tax documents and returns:
No financial penalties to be claimed for the tax period from 1 January 2020 till 12 February 2025 relevant to:
- The original tax returns and the transfer pricing forms weren’t submitted.
- Submitting the amended tax returns after the deadline or with incomplete data. Provided that such tax returns are submitted during the period of three months.
- For amended tax returns submitted after the deadline, there will be no delay penalties or surtaxes applied to the tax differences arising from these amendments for the periods between January 1, 2020, and February 12, 2025.
Encouraging the dispute settlement resulting from the inspection on estimation basis till the tax periods 2019:
- In case of submitting a tax return that includes a due tax / the liability to settle the dispute shall be 30% of the tax included in the tax return in addition to the delay penalty/surtax.
- In case of not submitting a tax return or submitting a tax return without a due tax / the liability to settle the dispute shall be the payment of the due tax according to the latest agreement, and 40% of it in addition to the delay penalty /surtax.
- The tax and the delay penalty may be paid in four equal payments, each payment’s period is three months, without calculating the delay penalty or surtax on the payments.
Waiving 100% of the delay penalty/surtax/additional due amounts on the tax resulting from the documentary inspection for the tax periods before 2020, provided that:
- Submit the dispute settlement request within a period no later than 12 May 2025.
- Paying the original debt in full within six months (i.e., 12 August 2025).
A full (100%) waiver of delay penalties on the due tax related to real estate disposals or off-market securities during the period from February 11, 2020, to February 12, 2025, is granted, provided that:
- The alienator is a natural person who doesn’t practice other activities that are taxable and shall submit a dispute settlement request during a maximum period of three months (i.e. 12 May 2025).
- Paying the original debt in-full during a maximum period of six months (i.e. 12 August 2025).
Waiving shall take place for the current disputes, provided that:
- Submitting a dispute settlement request during a period of three months (i.e. 12 May 2025).
- Paying the due tax during a period of six months (i.e. 12 August
2025).