Issuance of the Second Package of the Tax Relief Initiative – Corporate Income Tax

Law No. 151 of 2026 (which amends the Income Tax Law No. 91 of 2005 i.e., the "Egyptian Tax Law"), has modified the tax treatment of two key areas: (a) capital gains realized from the sale of shares, that are listed in the Egyptian Stock Exchange, by Egyptian shareholders (i.e. Egypt/Egypt) and (b) dividends distributed from these shares to domestic shareholders (i.e. again Egypt/Egypt). Note I: Since this summary focuses solely on capital gains, we will not analyze the new treatment of dividends, or changes occurred in other areas of tax, since separate alerts will cover these thoroughly.

Law No. 153 of 2026 (which amends the Stamp Tax Law No. 111 of 1980), has modified the stamp tax burden for both domestic and foreign sellers and buyers of ‘listed shares’ in Egypt.

Both laws, as part of a broader "Legislative Package", were published in the Official Gazette on 30 July 2026, and became effective the following day, 31 July 2026. To recap:

Status: In force 

• Official Gazette’s date of publication: 28 July 2026 
• Effective date: 29 July 2026

Note II: Foreign taxpayers are not included in the capital gains amendments but are only subject to the stamp duty’s amendments. Essentially, the new "Legislative Package" aims to eliminate any existing inequality against domestic taxpayers vis-à-vis foreign taxpayers by focusing on the ‘listed nature’ only of the relevant entity/ies sold. It targets two main areas: (a) selling shares in listed companies in Egypt by Egyptian shareholders, which involves eliminating the "suspension" of the relevant 10% tax on them, and (b) distributing dividends from domestic ‘listed and unlisted companies’ to their domestic shareholders, which aims to eliminate the relevant "tax leakage" (i.e. respectively 5%/10% WHT, applied to any domestic distribution), in other words, to eliminate cascading taxation through multi-tiered structures, dividends received from an Egyptian entity that are re-distributed up the chain are excluded from the WHT base of subsequent distributions, ensuring WHT applies effectively only once across the entire group chain.

Key takeaways for foreign taxpayers

Capital Gains realized by foreign shareholders on listed companies in Egypt vis-à-vis domestic shareholders

According to Law No. 199 of 2020 (effective from 1 October 2020), these gains were already 'not subject' to taxation, moving away from the uncertainty of the 'suspension' that was applied to domestic shareholders. This misalignment in tax treatment, potentially leading to inequality if the 10% tax were ever triggered (although, in practice, it was not applied through the recurring suspensions), explains the rationale for this recent intervention by the Egyptian legislator. The current changes in fact aim to support domestic shareholders selling shares in domestic listed entities that became as well ‘not subject’ to taxation. 

Comparative Analysis

Two practical cases for foreign shareholders  

UAE-Egypt case

Capital gains realized by UAE shareholders on shares of Egyptian entities listed on the Egyptian Stock Exchange

From 2005 to 2021, there was a 'suspension' of the 10% taxation until 2019. Then two years where (after the introduction of Law No. 199 of 2020) these became ‘not subject’ to tax. However, under the 'old' tax treaty (effective until 31 December 2021), capital gains realized also from the sale of ‘listed shares’ were exclusively taxed in the UAE when the seller was located there. Consequently, UAE shareholders did not need to rely on the unilateral 'suspension' of the 10% tax granted by Egyptian Tax Law until 2019; instead, they could have claimed the 'full exemption' in Egypt provided by the 'old' treaty itself.

There was no reason to claim a treaty exemption after 2020. On one hand, the unilateral 'not subject to tax' rule introduced by Law No. 199 in 2020 addressed this issue. On the other hand, the restrictions introduced by the new UAE-Egypt tax treaty (effective from 1 January 2022) started allocating taxing rights of capital gains—including those implicitly realized on 'listed shares' in Egypt— (also) to the "Source State" (SS). In this example, Egypt is the SS, being the country where the sold company is located, whilst the UAE represents the “Residence State” (RS) where the seller is located.

Cayman Islands-Egypt case

Capital gains realized by Cayman Islands shareholders on shares of Egyptian entities listed on the Egyptian Stock Exchange

Cayman Islands shareholders, like those from other non-treaty countries, benefitted from the ‘suspension’ of the 10% tax on capital gains from listed shares in Egypt from 2005 until 2019. Starting from 2020, they have also started benefitting from the 'not subject to tax' rule introduced by Law No. 199. Notably, neither this law in 2020 nor the recent legislation published in the Official Gazette few days ago has not introduced any particular restriction to this benefit for non-treaty countries or 'Tax Haven' jurisdictions.

Recent Reduction in the Stamp Duty Burden for the Sale of Listed Shares 

The enactment of Law No. 153 of 2026 has introduced a significant reduction in the stamp duty applicable to transactions involving listed shares, regardless of the domestic or foreign nature of the seller. Under the new regime, stamp duty is imposed at 0.5‰ on the buyer and 0.5‰ on the seller (1‰ in total), replacing the previous stamp duty rates (see below).

Under the previous regime:

• Resident investors were already subject to a stamp duty of 0.5‰ on the buyer and 0.5‰ on the seller (1‰ in total).
• Non-resident investors were instead subject to:
  • 1.25‰ on the buyer and 1.25‰ on the seller (2.5‰ in total) for ordinary transactions.
  • 3‰ on the buyer and 3‰ on the seller (6‰ in total) for transactions resulting in the acquisition or disposal of more than 33% of a company’s shares or voting rights.

In addition, under the new, intraday transactions (i.e., the purchase and sale of the same listed security within the same trading day) are subject to a reduced stamp duty of 0.25‰ on the buyer and 0.25‰ on the seller (0.5‰ in total).

These amendments are expected to reduce transaction costs, enhance the attractiveness of the Egyptian capital market, improve market liquidity, and encourage greater investment in listed securities.

Note III: The symbol ‰ denotes per mille, meaning per thousand (1/1,000). Accordingly, 1‰ = 0.1%, 0.5‰ = 0.05%, 1.25‰ = 0.125%, and 3‰ = 0.3%.

Introduction of fairer Capital Gains calculation  

Back to capital gains, the recent enactment of Law No. 153 of 2026 introduces also a more equitable approach to calculating capital gains on the sale of both listed and non-listed shares. This new methodology moves away from using acquisition historical value as the basis for calculation. Instead, it considers more contemporary pricing metrics, which reflect current market conditions more accurately. This approach aims to provide a balanced tax obligation for investors, ensuring that tax liabilities are consistent with the actual economic value realized at the time of sale.

How Deloitte can assist

Our International Tax practice across the Middle East has extensive experience advising multinational enterprises and Gulf conglomerates on these matters. We are well positioned to assist you with:

• Assessing any tax opportunity linked to the recent changes or confirmations of previous regimes
• Navigating the actual application of any of the benefits provided by the new law (incl. stamp tax duty’s reduction)