Enjoy the tax benefits of Law 152 of 2020 Development of medium and small enterprises

I mean, it is an industrial or non-industrial project, and is it a medium, small or micro enterprise, and is it a modern or old project?

This law included a unified definition of the types of medium, small and micro enterprises as follows:

It is a project that has not been established for more than two years from the date of starting the activity, and it is classified into two types according to the paid-up capital specified in the commercial register

as follows :

They are micro-enterprises with a capital of less than EGP 50,000 , small projects with capital ranging from EGP 50,000 to EGP 5 Mn, and medium projects with capital ranging from EGP 5 Mn to EGP 15 Mn.

They are micro-enterprises with a capital of less than EGP 50,000, small projects with capital ranging from EGP 50,000 to EGP 3 Mn, and medium enterprises with capital ranging from EGP 3 Mn to EGP 5 Mn.

It is a project that has been established for more than two years from the date of starting the activity, and the volume of business is determined according to the last tax assessment, the last tax return or the approved income statements, and in this case it is classified as follows:

A- Micro Project: whose turnover does not exceed one million pounds.

B- Small Project: The volume of its business ranges from one million to 50 million pounds.

C- Medium project: its turnover ranges from EGP 50 million to EGP 200 million.

"To obtain the services of the Medium, Small and Micro Enterprises Development Law, the following must be done :

First :

Submit the "Application for Project Classification Certificate" and complete the application and the required information, which includes the basic data of the project, the type of activity and the applicant's data for obtaining the certificate.

Second :

Enter the "Application Inquiry" link to follow up on the status of the application, which will explain to applicants the acceptance of the application or the need to complete other data.

But before applying for the classification certificate, it must be done because it is among the documents required to obtain the classification certificate, which is the license of the place (the headquarters of the company or facility)

Required place license documents:

- A copy of the license of the property in which the company's or establishment's headquarters are located

- A copy of the card of the owner of the establishment or the representative of the company

- A copy of a lease contract with proof of date or title deed

- ( A preview of the place is made)

The place license fee is 300 EGP, and there are additional unspecified fees to be determined by the entity.

Documents required to make a classification certificate:

License for the place (company or facility headquarters)

- Tax card

- Commercial Registration

- Social insurance

- If an existing company has the last two budgets or the last two tax returns.

Let's see the advantages of simplified tax transactions that the financier will get

Article 93 of the Law (Tax due to medium and small enterprises)

· The tax payable on projects registered at the time of the issuance of the law or registered after its issuance and whose turnover is one million pounds and less than 3 million pounds annually shall be determined as follows:

1- (0.50%) of the turnover for projects with a turnover of one million and less than two million annually

2- (0.75%) of the turnover for projects with a turnover of two million and less than 3 million annually

- The tax due on projects with a turnover of EGP 3 million and not exceeding EGP 10 million annually, registered at the time of the issuance of this law or registered after its issuance, is determined on the basis of (1%) of the volume of business, for a period of 5 years.

Article 94 of the Law (Tax due to microenterprises)

· The tax payable on microenterprises registered at the time of the issuance of this law or registered after its issuance, and whose turnover does not exceed one million pounds annually, shall be determined as follows:

1- One thousand pounds annually for projects whose annual turnover is less than 250 thousand pounds .

2- Two thousand five hundred pounds annually for projects with an annual turnover of 250 thousand pounds and less than 500 thousand pounds .

3- Five thousand pounds annually for projects with an annual turnover of 500 thousand pounds and less than one million pounds .

Article 95 of the law (How to determine the volume of business)

· The volume of project work in the application of the provisions of Articles (93 and 94) of this Law shall be determined in accordance with any of the following criteria:

1- Data of the last final tax assessment of the financier registered with the Tax Authority on the date of entry into force of this law .

2- Data of the first tax return submitted by the financier registered with the Egyptian Tax Authority and has not been taxed until the date of entry into force of this law.

3- Data of the return submitted by the taxpayer who registers taxes after the effective date of this law.

The volume of work of the project subject to simplified tax treatment is determined every five years from the basis of the examination conducted by the Egyptian Tax Authority, and the taxpayer is charged in the following five years on the basis of the result of the examination.

Article 96 of the law (non-applicability of the rules of declarations of the Income Tax Law)

The rules governing the returns stipulated in the Income Tax Law promulgated by Law No. 91 of 2005 shall not apply, and the return submitted by the financier shall be about the volume of his business.... etc.

It is not permissible to waste what is stated in the declaration except with conclusive evidence, and the Egyptian Tax Authority has the burden of proving the invalidity of what is stated in the declaration.

Article 97 of the Law (Exemption from keeping records and books)

Projects that are tax-accounted in accordance with the principles set forth in this Part shall be exempted from keeping the records, books and documents stipulated in the aforementioned Income Tax Law .

Article 98 of the law (Permissibility of applying to be subject to the Income Tax Law)

The projects referred to in Articles (93 and 94) of this law shall be subject to the simplified tax treatment system set forth therein, however, the taxpayer may apply to the Egyptian Tax Authority to be subject to the prescribed tax treatment in accordance with the provisions of the aforementioned Income Tax Law.

In the following cases :

1 - If the taxpayer estimates that he has made losses for the tax accounting period .

2. If the taxpayer estimates that the tax due in accordance with the simplified tax treatment system of the current law exceeds the tax due from him in accordance with the aforementioned income tax law .

- The Authority is obligated to hold the financier accountable in accordance with the provisions of the Income Tax Law immediately after submitting the application .

- The financier who applied to be subject to the Income Tax Law may not apply to return to the simplified tax treatment system until after five years .