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Law No. 173 of 2020: Tax Waiver regarding Interest on Late Payment and Additional Tax

Highlights

 

The Law No. 173 of 2020 was issued on 16 August 2020 regarding the tax waiver in relation to interest on late payment, additional tax and related non-criminal financial penalties (the “New Law”). 

 

The New Law also renews the effectiveness of the Tax Disputes Settlement Law No. 79 of 2016 and highlights the continuity of the committees established in accordance with said law to review requests until 31 December 2020.

 

Scope of Application 

 

The New Law provides that interest on late payment and additional tax which were imposed before the issuance of the New Law and pursuant to the following laws: (i) Customs Law No. 66 of 1963; (ii) Stamp Duty Law No. 111 of 1980; (iii) Income Tax Laws No. 157 of 1981 and 91 of 2005; (iv) State Financial Resources Development Law Fee Law No. 147 of 1984; (v) Sales Tax Law No. 11 of 1991; (vi) Real Estate Tax Law No. 196 of 2008; and (vii) VAT Law No. 67 of 2016, will benefit from a tax waiver under the following conditions.

 

Conditions

 

As a general condition, the taxpayer shall pay the original tax or duty in full starting from the effective date of the New Law. The tax waiver will be applied on the due and payable tax and/or duty imposed as follows:

 

Waived Portion of the interest on late payment and additional tax 

Payment Date

100%

Before the effective date of the New Law (i.e. 17 August 2020).

90%

Within the first 60 days as of the effective date of the New Law (i.e. 17 August 2020 until 15 October 2020).

70%

Within 60 days following the period stated in item 2 (i.e. 16 October 2020 until 14 December 2020).

50%

Within 60 days following the period stated in item 3 (i.e. 15 December 2020 until 12 February 2021).

 

In all cases, the application of the New Law shall not permit taxpayers to be reimbursed for the payment of interest on late payment and additional tax made prior to the effective date of the New Law. 

 

Entry into Force

 

The New Law entered into force on 17 August 2020.

 

Please note that the Egyptian Tax Authority issued the circular No. 5 of 2020 in application of the New Law.