Another Amendment to Tax Brackets f

On 23 June 2018, Law No. 97 of 2018[1] was passed amending provisions of Income Tax Law No. 91 of 2005 concerning tax brackets for individual incomes. The law now exempts persons falling within the first tax bracket of incomes lower than EGP8,000 a year (instead of 7,200 prior to the latest amendment); and imposes a tax rate of 10% for those who fall in the second tax bracket of incomes between EGP8,000 and 30,000 a year (instead of 7,200 – 30,000); a tax rate of 15% for those in the third tax bracket of incomes between EGP30,000 and 45,000 a year (unchanged); a tax rate of 20% for those within the fourth tax bracket of incomes between EGP45,000 to 200,000 a year (unchanged); and a tax rate of 22.5% for the fifth bracket which includes persons whose incomes exceed the EGP200,000 threshold (unchanged). The amendment also introduces a tax break to those falling within the second bracket which may be used once and is in the form of a deduction up to 85% (up from 80%); 45% off the third tax bracket (up from 40%); and 7.5% off the fourth tax bracket (up from 5%); based on the taxpayer’s highest bracket. It is worth noting that these rates will be applied starting from 1 July 2018 with respect to wages and starting from the tax period that is subsequent to the publication of these amendments – i.e. following 23 June 2018 – with respect to income from commercial, non-commercial and professional activity, as well as income from real estate ownership. These amendments to tax brackets for individuals and slight increase in exemptions is similar to a move taken last year around the same time in an aim to alleviate the effects of a package of austerity measures that were passed.   [1] Law No. 97/2018 amending certain provisions of Income Tax Law No. 91/2005, Official Gazette, Issue No. 25 (bis), 23 June 2018.