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Sunday, 7 March 2021

El Sisi ratifies OECD dual taxation standards

The Organization for Economic Cooperation and Development’s (OECD) convention on double taxation is now official in Egypt after President Abdel Fattah El Sisi ratified an agreement Egypt first signed in 2017 to modify its double taxation treaties with other countries. Tax officials will now begin revising over 30 bilateral agreements the country had signed in the past on double taxation. Egypt is now the 26th country to ratify the treaty, which has so far been signed (pdf) by a total of 95 nations.

The convention will allow us to grow tax revenue from e-commerce as it will redistribute taxes paid by tech companies such as Facebook and YouTube based on where the income is coming from, Ramy Mohamed, the finance minister’s advisor for international taxation, told Enterprise. As things stand, e-commerce companies with cross-border operations pay taxes only in countries where they’re registered, he said.

We’re not alone in looking for Big Tech to pay its fair share of taxes. France imposed a 3% levy on digital revenues, prompting a spat with the previous US administration and the Biden administration insists that this type of levy is unfair double taxation. Aid groups are pushing emerging economies to tax big tech and the debate has spilled over into the pages of the Financial Times and other bastions of the global business elite.

Speaking of e-commerce tax revenues: The draft E-Commerce Act is currently with the Madbouly Cabinet for review, and is expected to make its way to the House of Representatives soon. The proposed law would, if passed, provide a clear tax framework for online ads and the sale of goods and services and potentially net new taxes from the operations of tech giants including Google, Netflix, Amazon and Facebook here in Egypt.

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