From Egypt: New Law Issued of Late Payment Interest & Additional Tax Reductions In Case of Early Payment of Original Tax or Customs

Andersen Tax & Legal in Egypt, a member firm of Andersen Global

New Law Issued of Late Payment Interest & Additional Tax Reductions In Case of Early Payment of Original Tax or Customs

A - Late payment interest & additional tax reductions for early payment of original tax

• Law No. 174/2018 has been issued to be applied starting August 15, 2018 to provide a reduction on the interest applicable for late payments, on the condition that the full original tax due, or was eligible for payment before the issuance of this law, is settled in full. This includes income tax as per the preceding Tax Law No. 157/1981, as amended by Law No. 187/1993, in addition to State Development Tax Law No. 147/1984, Sales Tax Law No. 11/1991, Income Tax Law No. 91/2005 and Value Added Tax Law No. 67/2016.
• The reduced rate is granted and applied after settling and paying the full original tax based on the following criteria:

1. 90% reduction on the interest applied for late payment or additional tax if payment for the original tax is made within 90 days of the issuance of this law.
2. 70% reduction on the interest applied for late payment or additional tax if payment for the original tax is made within the 45 days subsequent to the 90 days in (1).
3. 50% reduction on the interest applied for late payment or additional tax if payment for the original tax is made 45 days subsequent to the 45 days in (2).

• Additionally, if the taxpayer has settled and paid the full original tax, or state development tax prior to the issuance of this law, then the entire late payment interest will be considered nullified.

B - Application of the above on custom duty fines

• The enforcement of the above criteria was also applied to custom duty fines by the customs authority, notwithstanding criminal acts or breaches and Law No. 66/1963 for amounts due before the issuance of the new law. This application is made provided that settlements and payments are made during the above mentioned periods. It should be noted that the Minister of Finance will issue further details about the nature of custom duty fines in the near future.

C - Tax Dispute Resolution Law 79/2016 is to include custom disputes

• Tax dispute resolution Law No. 79/2016 is to include custom disputes, as per Law No. 66/1963, or any other laws applied by the customs authority.
• The same law also states that requests submitted after December 31, 2018 will not be accepted since the enforcement of such law will be stopped.