Regulatory Alerts2017-01-01
Circular No. (1) for the Year 2017
The Egyptian Financial Supervisory Authority requires investment funds and their managers to calculate a capital gains tax provision on transaction proceeds effective May 17, 2017, upon the expiration of the current statutory tax suspension. This directive safeguards fund net asset values and policyholder shares while the government's draft law to extend the suspension remains pending legislative approval. Fund operators must implement this accounting measure immediately to ensure regulatory compliance and accurate financial reporting.
Egyptian Financial Supervisory Authority
Egyptian Financial Supervisory Authority
Circular No. (1) for the Year 2017
Dated 16/5/2017
Regarding the Implementation of the Provisions of the Income Tax Law
and Their Impact on Investment Funds Established in Accordance with the Provisions of Law (95) of 1992
To: Investment Funds, Investment Fund Managers:
With reference to Law No. (53) of 2014 amending certain provisions of the Income Tax Law issued by Law No. (91) of 2005, which stipulates a tax on capital gains arising from trading in securities listed on the stock exchange.
And whereas Law No. (69) of 2015 amending certain provisions of the Income Tax Law was issued, which included suspending the implementation of the provisions stipulated in Law No. (53) of 2014 amending certain provisions of the aforementioned Income Tax Law regarding the tax on capital gains arising from trading in listed securities, for a period of two years starting from May 17, 2015.
And in the EFS Authority's keenness to keep all parties concerned with investment funds informed of all developments in this regard.
And whereas the government submitted to the House of Representatives a draft law including the postponement of the implementation of the tax on capital gains arising from trading in listed securities, which has not been issued by the Council to date.
Therefore; to safeguard the fund's net asset value and the policyholder's share thereof, effective May 17, 2017, as the specified date marking the end of the suspension period for the tax stipulated under the currently applicable law, it is mandatory to calculate a provision for capital gains tax on investment fund transaction proceeds.
Head of the Central Administration
Dr. Ranasah
[Signature]
Smart Village, Building 136 - B, Giza
P.O. Box: 12477
Tel: 2534535 - Fax: 25370027
20 Aboud El-Din St. - Cairo
P.O. Box: 11111
Tel: 25792340 - Fax: 25745598
28 Talaat Harb St. - Cairo
P.O. Box: 25450
Tel: 25755887 - Fax: 25758481