Egypt Introduces New Tax Incentives for Small Businesses

The Egyptian Tax Authority published Law No. 6 of 2025, which introduces new tax incentives for qualifying small businesses with annual turnover not exceeding EGP 20 million (USD 395,000). To qualify, a business must timely submit all tax declarations and join the Egyptian Tax Authority electronic systems for invoicing and receipts.

Certain businesses are excluded from the application of the Law:

◉ Businesses providing professional consulting services for which at least 90% or more of the revenue comes from one or two clients only,

◉ Businesses that restructure solely to qualify for tax incentives (i.e., segment activities without any economic intent).

The following taxes are exempted from the benefits:

◉ State development fees, stamp tax, documentation and registration fees (formation of articles of association), contracts for credit facilities and mortgages related to the business and other guarantees provided to obtain financing, and land registration contracts for the business;

◉ Capital gains tax on gains from the sale of fixed assets, machinery, and production equipment for the business;

◉ Withholding tax on dividend distributions;

◉ Local withholding (deduction) and advance payment requirements.

Qualifying businesses are taxed on turnover as follows:

– 0.4% if turnover is less than EGP 500,000 (USD 9,800),

– 0.5% if turnover is between EGP 500,000 and EGP 2 million (USD 39,500),

– 0.75% if turnover is between EGP 2 million and EGP 3 million (USD 59,000),

– 1.0% if turnover is between EGP 3 million and EGP 10 million (USD 197,000),

– 1.5% if turnover is between EGP 10 million and EGP 20 million (USD 395,000).

A separate form, different from the standard corporate income tax return form, is submitted for the annual corporate tax return for commercial, industrial, or professional activities in the manner stated in the Unified Tax Procedures Law.

Instead of a monthly value-added tax return, a quarterly VAT return is submitted within one month following each quarter.

Corporate tax and VAT inspections are conducted five years following the request to use the benefits stipulated by Law No. 6 is submitted.

Businesses which benefit from the Law use a simplified bookkeeping system.

Law No. 6 of 2025