Late payment interest & additional tax reductions for early payment of original tax or customs.
Late payment interest & additional tax reductions for early payment of original tax:
Law 174/2018 has been issued on 14th of August 2018 to be applied starting from August 15th of 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 157/1981, as amended by Law 187/1993, in addition to State Development Tax Law 147/1984, General Sales Tax Law 11/1991, Income Tax Law 91/2005 and Value Added Tax Law 67/2016.
The reduced rate is granted and applied after settling and paying the full original tax based on the following criteria:
- 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.
- 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 (a).
- 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 (b).
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.
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 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.
Tax dispute resolution law 79/2016 is to include custom disputes:
- Tax dispute resolution Law 79/2016 is to include custom disputes, as per Law 66/1963, or any other laws applied by the customs authority.
- The same resolution also states that requests submitted after 31st of December 2018 will not be accepted since the enforcement of such law will be stopped.
Responsibility and Commitment:
Andersen Tax & Legal Egypt’s tax team has prepared this summarized tax report to introduce Law No. 174 of 2018. Efforts have been combined to produce this report with clear and accurate content however this report aims only to spread general information and should not be treated as a legal document or a document that can be used for decision making, or for issuing specialized consultations. Please contact Andersen Tax & Legal Egypt for tailor made solutions.