Problems relating to Trade and Investment on Egypt
10. Restrictive measures for operations in Free Trade Zones ("FTZs") and Special Economic Zones ("SEZs") |
|||
Issue |
Issue details |
Requests |
Reference |
| (1) Accrual of Tax Liability due to the Zoning Change in Free Zone | - At the time when a firm concluded a long term preventive maintenance agreement (the agreement) with its customer (a private LNG plant operator), the customer enjoyed the preferential tax exemption measures as expressly stated in the agreement. However, because of the change in the free zone designation that has excluded the area of the plant location, the tax liability has accrued on the customer for 20% of the profit. Consequently, withholding tax of 20% is deducted from the firm's invoice amount to its customer. | - It is requested that in excluding an area from the free zone designation, GOE: -- gives a sufficient advance explanation and a moratorium period, and that -- the taxation authority gives a clear explanation that "the transactions between enterprises outside Egypt are tax exempt" to the enterprises that are to be excluded from the free zone designation. |
- Law No. 114/2008 |
<<BACK |