RSM Egypt

Tax Alert: Government Extends Tax Break to Sectors Severely Hit by COVID-19

In light of ongoing financial challenges caused by the COVID-19 pandemic, the Egyptian Cabinet announced on April 16, 2020, the approval of the Egyptian Ministry of Finance tax and financial relief draft aimed at mitigating financial consequences emerging from this crisis. The draft issues deadline extensions for filing tax returns, paying all or part of the tax due in accordance with the provisions of the Tax Law on Income or value-added tax law or both, for a period not exceeding three-months, renewable for a similar period. 

The three-month tax relief ruling will be extended to the following sectors:

  • Tourism and antiquities (includes restaurants and cafes), hotels (tourist and hotel establishments)

  • Press and media (due to the significant influence of the most important financial resources, which is the outcome of advertising and marketing)

  • Companies operating in the field of communications and information technology, except for those authorized to operate a service Landline and mobile phones, as well as companies operating in the sports field, as well as sectors

  • Aviation, transportation, communications, car distributors, as well as contracting companies

  • Healthcare Sector

  • Industrial sector (especially companies operating in the field of export), with the exception of industrial establishments operating in the food and drug sectors, health care supplies and detergents.

As businesses operating in these sectors have been negatively affected by this pandemic they will not be charged any fines or interest in exchange for delay, according to the decree. In addition, taxpayers will be allowed to settle their 2019 Income taxes in installments under the following conditions:

  • Paying 20% of their tax during the month of April 2020.

  • Paying 30% of their tax during the month of May 2020, provided that 50% of their tax due is paid before the end of June 2020 without incurring any delay interest or fines.

  • Taking into account the possibility of studying the situation before June 30, 2020 to determine which of these sectors would require a deadline extension for another three months.

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