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The most important things stated in Law (206)

أهم ما جاء في قانون الاجراءات الضريبية 206 | ECPA

One of the most important things that have taken a large segment of taxpayers, investors, business owners, enterprises, accountants and everyone who has a tax ID over the past two years is the promulgation of the Tax Procedure Law.

On 19/10/2020, the Egyptian government issued the Tax Procedures Law. But unfortunately, it was obliged to implement it from the day after its publication, which is 20/10/2020, which caused concern and caution among many interested people and workers in commercial and investment activities. 

What is the Unified Tax Procedure Law No. 206 2020?

According to Article 1 of the Law, the Tax Procedures Act is concerned with the matters of linking and collecting income tax by Law No. 91 of 2005, the procedures for linking and collecting value-added tax issued by Law No. 67 of 2016, and linking and collecting stamp tax issued No. 111 of 1980.
This means that this law represents the procedural part of the previous substantive laws. The law did not repeal the laws mentioned above in a more straightforward sense. Still, it abolished the procedures associated with each law, and the Tax Procedure Act was responsible for doing so.
Of course, those involved in this law should go to an accounting office to reconcile their legal papers with the Tax Procedure Law so that none of them would be subjected to unfair criminal penalties, in which a fine of up to 2 million EGP and imprisonment for not less than six months and not more than three. Years. 

What is the Unified Tax Procedure Law No. 206 2020?

According to Article 1 of the Law, the Tax Procedures Act is concerned with the matters of linking and collecting income tax by Law No. 91 of 2005, the procedures for linking and collecting value-added tax issued by Law No. 67 of 2016, and linking and collecting stamp tax issued No. 111 of 1980.
This means that this law represents the procedural part of the previous substantive laws. The law did not repeal the laws mentioned above in a more straightforward sense. Still, it abolished the procedures associated with each law, and the Tax Procedure Act was responsible for doing so.
Of course, those involved in this law should go to an accounting office to reconcile their legal papers with the Tax Procedure Law so that none of them would be subjected to unfair criminal penalties, in which a fine of up to 2 million EGP and imprisonment for not less than six months and not more than three. Years. 

What is the text of the articles of the Unified Tax Procedure law

Many detailed articles of the Tax Procedures Law have been included. Here are the essential things in them: 

Article 28

Every taxpayer is in charge of informing the tax authority about any modification or change in their data within 30 days. This benefits the owners of companies that sell a store, rent it, open new branches or sell them, etc. Otherwise, the taxpayer will be offered a fine of not less than 20,000 EGP and not more than 100 thousand EGP.

Article 9 of the Tax Procedure law

This article of the law requires any property owner to notify the tax authority whose property is within its department of any kind of exploitation they make in the property or part of it within a period not exceeding 30 days from the exploitation date. In the event of failure to notify, the owner may expose himself to a fine of not less than 3,000 EGP, not more than 50,000 EGP according to Article 69 of the Law.

Article 14

It states that copywriters, advertisements, programs, and their followings are committed to clarifying; The author's name, address, writer's name, publication stamp, title, etc. Should be written, and this should be implemented no later than the end of the month following the month in which the printing, publication, or advertising license was issued. This means that each publishing house and advertising submit the names of all writers, advertisers, and others to the tax authority to hold them accountable. Any publishing, advertising, or printing house that does not do so will expose itself to a fine of 3,000 EGP up to 50,000 EGP.

Article 7

Which stipulates that the taxpayer shall not be allowed to prevent the employee of the Authority or judicial officers from accessing the company's books, documents, expenses, and other records of the company, whether they are physical or electronic. Tax authority representatives may also be found in your company without the need for prior per authority on your side. This means that if the tax warden comes to your company or project, you do not have the right to prevent them from doing their work. If you do not submit documents, a case proof record will be issued, proving that you have refrained from enabling the employee to perform his work. The penalty shall be a fine of not less than 3,000 EGP and not more than 50,000 EGP.

tax return

It is covered by various articles from Article 29 to Article 34. Each article has its different divisions and paragraphs and one of the most important paragraphs of the articles: 

Article 29

It included three crucial paragraphs. The first paragraph was that every taxpayer or legal person is obliged to submit a tax return for the tax period to its tax authority in accordance with the standard form prepared for this purpose. The second paragraph includes the mandatory that a tax return meets all the required tax information. The tax payable shall be performed according to the information provided in the form. The third paragraph stressed that this decision is not valid as an argument to counter the interest judicially if the declaration is not registered Tax and signature or failure to meet all the data provided for in the form. It is best to rely on an accredited accounting office such as “Egyptian Chartered Accountants” when registering a tax return to avoid making mistakes and to ensure that your tax data is written accurately, and not to expose yourself to a fine.

Article 31

This article talks about the dates for filing tax returns, which are divided into three types:
● Monthly tax returns come by the VAT law.
● Quarterly tax returns according to salary tax.
● Annual tax returns are subject to income tax.

Article 35

She obliged all tax taxpayers, including legal persons or companies, to issue an electronic invoice.

Article 32

This article stipulates the obligation of the taxpayer to submit their tax return electronically. Furthermore, it requires payment of the tax due on Naturally, this filing the return. As of January 1, 2021, the tax return has been submitted electronically via the Internet. Therefore, anyone who violates the text may expose themselves to a fine of not less than 3,000 EGP and not more than 20,000 EGP.

Tax types

loan

VAT

Previously, a deadline was given to the taxpayer to pay VAT within 60 days, but with the Tax Procedure Law, the period has been reduced to only 30 days. Therefore, this article has been implemented starting from October 20, 2020. In the absence of sales, the tax authority requires you to make a tax return and not Ignore it. 

salary

Payroll tax

There has been no change. The application is still made during January, April, June, and October, and the tax return name has been changed at the end of the year as the settlement declaration. 

taxes

Income tax

Every taxpayer is obliged to submit a tax return for their income during the year from January 1 to March 31 for natural persons. Legal persons apply from January 1 to April 30.

Important notes on the Tax Procedure Law

Persons who receive some kind of tax exemption must file a tax return during the exemption period.

For deceased taxpayers, heirs must file a tax return within 90 days from death.

Persons who do not reside inside Egypt and will end their stay during the tax period must apply within 60 days before the interruption unless the interruption occurred suddenly.

If the activity stops, the taxpayer must file a tax return for the period until discontinuation.

Persons who have waived or quarantined part or all of their company shall file a tax return for the period up to the date of assignment or quarantine.

You must have a signature on the tax return or your legal representative’s signature. Otherwise, it will be considered null.

If an independent accounting office submits the signatory to the tax return, the IRS imposes another signature from the same taxpayer. The return form will not be used.

For companies, associations, projects, or natural persons whose business exceeds 2 million EGP, the tax return must be submitted by a chartered accountant, or it will not be recognized.

In the case of international companies or companies with multiple branches, they must submit tax data consisting of a significant file and a local one, an acknowledgment for each branch according to its country, and the value of cash for dealing between the parent company and its branches.

The Unified Tax Procedure Law prohibits tax authority employees from forming relationships or working relationships between them and taxpayers or accounting and auditing offices. In the event of a relationship, a fine of 50 to 200 thousand EGP will be paid, three years imprisonment, or both penalties.

Taxpayers are also prohibited from carrying out tax procedures for any taxpayer in the case of first to fourth-degree kinship.

The Authority Officer is also prohibited from pleading or becoming a legal representative of any taxpayer, whether in person or through an agent, in favor of tax files or returns. He has already participated before five years have passed.

Each taxpayer must keep their records and books that have been proven on the tax return for five consecutive years for the period for which the return is submitted.

If the taxpayer files an appeal against the value of the tax, the appeal will be considered if substantial grounds are written, and otherwise, the claim is not considered.

Tax Procedure Law Penalties

The law decided to punish anyone who failed to file their tax return with a fine of not less than 3,000 EGP and not more than 50,000 EGP within 60 days from the expiry date. In case of a delay of more than 60 days, a fine of 5,000 to 200,000 EGP will be paid. The same penalty applies to persons who Record data the wrong way.

The Parliament has also increased the penalty from 50 thousand to 2 million EGP. In case of repeated default for three consecutive tax periods, the penalty shall be sentenced to imprisonment for a term of not less than six months and not more than three years.

International companies or multiple branches are punished in the event of late filing a financial fine of 1-3% of the value of the company’s financial transactions.

A fine is also calculated in case of tax evasion of the value of taxes due and not the origin of the tax.

The law decided to punish anyone who failed to file their tax return with a fine of not less than 3,000 EGP and not more than 50,000 EGP within 60 days from the expiry date. In case of a delay of more than 60 days, a fine of 5,000 to 200,000 EGP will be paid. The same penalty applies to persons who Record data the wrong way.

The Parliament has also increased the penalty from 50 thousand to 2 million EGP. In case of repeated default for three consecutive tax periods, the penalty shall be sentenced to imprisonment for a term of not less than six months and not more than three years.

International companies or multiple branches are punished in the event of late filing a financial fine of 1-3% of the value of the company’s financial transactions.

A fine is also calculated in case of tax evasion of the value of taxes due and not the origin of the tax.

What should I do to avoid falling under tax procedures law

The Egyptian Chartered Accountants Office has the best experts and consultants in accounting, auditing, and taxation. We can provide the best tax services in the latest electronic methods by the Tax law and all its amendments and updates.

of our services

Tax planning services from the inception of your project will prevent you from being exposed to a high tax value and reduce the value of tax fees to the minimum possible.

Perform all accounting operations for financial statements, journals, and balance sheet accounts.

Prepare and submit electronic tax returns.

Sales tax reports.

Preparing and issuing an electronic invoice.

Payroll tax reports.

Dealing with tax disputes and settlements.

Provide tax advice.

Technical support is available around the clock and provides tax recommendations.

Calculate tax obligations accurately.

Exploit all tax savings.

And many other tax services.

The ECPA office is an integrated team around the clock to serve you. The office provides the first consultation free of charge to new clients… Please feel free to contact us now.

Tax Planning Partner

فريقنا - تامر محمد

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