globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

23 December 2020

Egypt amends Unified Tax Procedures Law

Executive summary

Egyptian Law No. 211 (the law) was published in the Official Gazette on 3 December 2020. The law amends the recently issued Unified Tax Procedures Law No. 206 of 2020, introducing stricter penalties for non-compliance relating to transfer pricing documentation and tax return filing. The law came into force on 4 December 2020.

Detailed discussion

Transfer pricing penalties

The law establishes the following penalties for transfer pricing non-compliance:

Non-compliance

Amount of penalty

For corporate income tax returns due to be filed on or after 20 October 2020, failure to declare accurate value of related party transactions (Table 508)

1% of the total value of the taxpayer’s undeclared related party transactions (local and cross-border transactions) during the fiscal year

Failure to submit a master file or local file on time

3% of the total value of the taxpayer’s related party transactions (local and cross-border transactions) during the fiscal year

Failure to submit a Country-by-Country (CbC) report (if the taxpayer is the ultimate parent entity of a multinational group) or notification (if the taxpayer is the constituent entity) on time

2% of the total value of the taxpayer’s related party transactions (local and cross-border transactions) during the fiscal year

Where there is multiple non-compliance, the penalties payable by a taxpayer for a fiscal year are capped at 3% of the total value of the taxpayer’s related party transactions (local and cross-border transactions) for that year.

The penalties related to the master file, local file and CbC report or notification apply to documents required to be submitted to the Tax Authority on or after 4 December 2020.

Tax return penalties

The law imposes penalties ranging from EGP50,000 to EGP2m for monthly value added tax (VAT) returns, quarterly salary tax returns and annual corporate income tax returns that are filed more than 60 days after the filing due date.

If the non-compliance occurs for six VAT returns or three corporate income tax returns, the taxpayer may also be subject to imprisonment for a period between six months and three years.

Implications

The amendments in Law No. 211 impose significant penalties for failing to comply with transfer pricing documentation and tax return filing deadlines. Taxpayers should ensure they are able to meet their compliance obligations on a timely basis to reduce the risk of penalties.

_____________________________________________________________________________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young Egypt, Cairo
Ernst & Young LLP (United States), Middle East Tax Desk, New York

ATTACHMENT

 

Document ID: 2020-6619

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2025, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more