Law No. 151 of 2026 introduced significant amendments to the Egyptian Income Tax Law No. 91 of 2005 as part of the second package of tax facilitation measures. The amendments focus on improving the tax treatment of investments, supporting the Egyptian capital market, encouraging long-term investment, facilitating infrastructure financing and reducing certain instances of tax duplication. The changes also introduce specific incentives for parent and holding companies and revise the treatment of listed and unlisted securities.
The amendments are particularly relevant to corporate groups, investors, companies listed or seeking to list on the Egyptian Exchange (“EGX”), infrastructure projects and businesses undertaking investment or financing transactions in Egypt.
Extended Capital Gains Tax Exemption for Listed Securities
One of the key changes concerns the tax treatment of capital gains arising from the disposal of securities listed on the EGX. The 2026 amendments provide an exemption from income tax on capital gains arising from disposals of listed securities, while the transactions remain subject to the applicable proportional stamp tax.
The Egyptian Tax Authority has described the measure as part of the reforms intended to eliminate tax duplication and support the development and competitiveness of the Egyptian securities market. The new framework applies to qualifying transactions regardless of whether the investor is an Egyptian tax resident or non-resident, subject to the applicable legislative conditions.
This change is particularly relevant for investors considering exits from listed investments, as the tax treatment is now more closely aligned with a separate stamp-tax mechanism applicable to the underlying transaction.
A New Approach to Acquisition Cost in Unlisted Securities
The amendments also introduce changes to the calculation of the taxable gain arising from the disposal of unlisted securities. Rather than applying the same treatment as listed securities, disposals of unlisted securities remain within the income-tax framework.
At the same time, the amendments introduce a more structured mechanism for determining the acquisition cost of unlisted securities. The Egyptian Tax Authority has described this as a simplified mechanism intended to provide greater clarity and facilitate the calculation of the taxable capital gain on disposal.
For long-term investments, the revised rules may therefore have an important effect on the calculation of the taxable gain, particularly where the securities have been held for an extended period before disposal.
Stamp Tax Treatment of Securities
The income-tax amendments are complemented by changes to the Stamp Tax Law under Law No. 153 of 2026. In particular, transactions involving unlisted securities have been removed from the scope of stamp tax, leaving such transactions subject primarily to the income-tax treatment applicable to the resulting capital gain
For listed securities, the legislative approach instead provides for income-tax exemption on qualifying capital gains while retaining the applicable proportional stamp tax. The ETA has specifically highlighted this distinction as a measure designed to address tax duplication and provide a clearer framework for securities transactions.
Enhanced Dividend Relief for Parent and Holding Companies
The 2026 amendments also revise the tax treatment of dividends received by Egyptian parent and holding companies from qualifying subsidiaries.
The amendments provide broader exemption treatment for qualifying dividends received from resident or non-resident subsidiaries, replacing the previous partial exemption mechanism. This change is intended to reduce tax duplication within corporate ownership structures and improve the efficiency of domestic and cross-border investment structures.
The reform is particularly relevant to corporate groups in which profits are distributed through several levels of ownership. By reducing the potential for repeated taxation as profits move through a corporate chain, the revised rules may simplify the tax consequences of dividend distributions within qualifying structures.
Incentives for Long-Term Infrastructure Financing Projects
The 2026 amendments introduce targeted tax incentives for financing arrangements connected with designated national infrastructure projects
Subject to the prescribed conditions, interest paid on qualifying loans or financing facilities used to finance eligible infrastructure projects may benefit from an exemption from withholding tax. The conditions include requirements relating to the financing provider, the term of the financing and the level of investment in the relevant project
The measure is intended to facilitate access to longer-term financing for qualifying infrastructure projects and reduce the tax cost associated with external financing. The Egyptian Parliament identified tax incentives for national and infrastructure projects as one of the objectives of the Income Tax amendments.
Debt-to-Equity Rules for Infrastructure Projects
The amendments also provide specific relief from the general debt-to-equity limitation for qualifying infrastructure borrowers.
Eligible projects may apply a debt-to-equity ratio of up to 4:1, subject to satisfying the conditions prescribed under the amended legislation. This provides qualifying infrastructure businesses with greater flexibility in structuring their financing and complements the withholding-tax relief available for qualifying interest payments.
The availability of the relief should nevertheless be assessed on a transaction-by-transaction basis, particularly because the relevant financing, project and investment conditions must be satisfied
EGX Listing Incentive
The 2026 reforms also introduce a tax incentive for qualifying companies that offer their shares for listing on the EGX.
Eligible companies may benefit from a tax credit equal to 15% of the corporate income tax due for a prescribed period following the offering, subject to the applicable conditions and thresholds.
The incentive forms part of the broader policy objective of encouraging companies to access the Egyptian capital market and increasing the attractiveness of EGX listings. The ETA has specifically identified cash incentives for qualifying companies that list their shares on the Egyptian Exchange as one of the investment-support measures introduced under the 2026 reforms.
The practical application of the incentive, including its interaction with companies whose income is substantially composed of tax-exempt dividends, should be considered in light of the detailed implementing rules.
Removal of Previous Tax Deferral on Share Swaps
The amendments also change the tax treatment of certain share-for-share exchanges involving listed and unlisted companies.
The previous rollover mechanism that allowed qualifying share swaps to defer the recognition of the capital gain has been removed. Consequently, transactions that previously benefited from tax deferral may now result in the recognition of the relevant taxable gain at the time of the exchange, subject to the applicable rules.
This change should be considered carefully when structuring corporate reorganizations, acquisitions and other transactions involving the exchange of shares.
Mandatory Social Contributions and Their Deductibility for Income Tax Purposes
The 2026 reforms also address the tax treatment of mandatory social contributions imposed under the Universal Health Insurance framework.
The amendments provide for the deductibility of qualifying mandatory social contributions for income tax purposes. This represents a change from the previous treatment under which such contributions were not deductible when determining taxable income.
The change may reduce the effective income tax burden for businesses subject to these contributions and should be reflected when calculating the relevant taxable base.
Practical Considerations for Investors and Corporate Groups
The 2026 income tax reforms require investors and corporate groups to reassess the tax implications of their investment and financing structures. Particular attention should be given to the distinction between listed and unlisted securities, the revised treatment of dividends, the structure of share transfers and swaps, and the availability of incentives for qualifying EGX listings and infrastructure projects.
Companies should also review existing and planned financing arrangements to determine whether they may qualify for the infrastructure-related withholding-tax and debt-to-equity relief. Similarly, corporate groups should assess whether their existing dividend structures satisfy the conditions for the enhanced exemption.
The Egyptian Tax Authority has indicated that the reforms are intended to encourage investment, support the securities market, eliminate tax duplication and provide greater clarity in the taxation of investment transactions.
Conclusion
The 2026 income tax amendments represent a significant adjustment to the taxation of investments, corporate distributions and financing arrangements in Egypt. The reforms introduce more differentiated treatment between listed and unlisted securities, expand relief for qualifying dividends, provide targeted incentives for infrastructure financing and EGX listings, and revise the treatment of certain corporate transactions.
For businesses and investors, the practical impact will depend not only on the statutory provisions but also on the conditions and implementation rules applicable to each incentive or exemption. Companies should therefore review their existing investment, financing and corporate structures and consider the 2026 amendments when planning future transactions.
Frequently Asked Questions
What are the key income tax reforms introduced in Egypt in 2026?
+
Law No. 151 of 2026 introduced amendments to Egypt’s
Income Tax Law, including changes to capital gains
taxation, dividend exemptions, infrastructure financing
incentives, EGX listing incentives, share swaps, and
the deductibility of certain mandatory social contributions.
Are capital gains from listed securities exempt from income tax in Egypt?
+
Under the 2026 reforms, qualifying capital gains arising
from disposals of securities listed on the Egyptian
Exchange (EGX) are exempt from income tax, subject to
applicable legislative conditions. Such transactions
remain subject to the relevant proportional stamp tax.
How are dividends taxed under Egypt’s 2026 income tax reforms?
+
The 2026 amendments expand exemption treatment for
qualifying dividends received by Egyptian parent and
holding companies from resident or non-resident
subsidiaries. The relief is subject to statutory
conditions and is intended to reduce tax duplication
within corporate groups.
What tax incentives are available for infrastructure financing in Egypt?
+
Qualifying infrastructure projects may benefit from
withholding tax exemptions on interest paid under
eligible financing arrangements. Certain qualifying
borrowers may also apply a debt-to-equity ratio of
up to 4:1, subject to the conditions prescribed by
the amended legislation.
What tax incentives are available for companies listing on the EGX in 2026?
+
Eligible companies offering their shares for listing on
the Egyptian Exchange may qualify for a tax credit equal
to 15% of corporate income tax due for a prescribed
period, subject to applicable eligibility requirements
and thresholds.
How do Egypt’s 2026 tax reforms affect unlisted securities and share swaps?
+
Capital gains from disposals of unlisted securities
remain subject to income tax under revised acquisition-cost
calculation rules, while transactions in unlisted
securities have been removed from the scope of stamp tax.
The amendments also remove the previous tax-deferral
mechanism for certain qualifying share-for-share exchanges.
Add Andersen in Egypt to Google Preferred Sources
Make us your preferred source to ensure you always get accurate
information. Access our peer-reviewed, highly reputable, and
unique research directly through Google.
Add
To find out more, please fill out the form or email us at: info@eg.Andersen.com
Contact Us
