Egypt tax dispute settlement extended to 31 December 2026

Executive summary

• Law No. 152 of 2026 (the Renewal Law) was published in the Official Gazette, issue No. 30 bis (A), on 28 July 2026 and took effect on the following day.
• It renews the provisions and procedures of Law No. 79 of 2016 on the settlement of tax disputes (the Settlement Law) until 31 December 2026.
• The settlement committees continue to hear applications not yet decided, and will decide new applications submitted to them up to that date.
• The renewal does not extend to Law No. 5 of 2025, whose window closed on 12 August 2025.

The law is one of seven tax laws published in the same issue of the Official Gazette; all seven are reviewed together in Egypt's July 2026 tax package.

Background

The Settlement Law was enacted in 2016 as an exceptional route for resolving disputes between the Egyptian Tax Authority (the ETA) and taxpayers outside the courts. It was amended by Laws No. 14 and No. 174 of 2018, renewed by Laws No. 16 and No. 173 of 2020, No. 153 of 2022 and No. 160 of 2024, and has now been renewed again by the Renewal Law.

How the mechanism works

The Settlement Law covers disputes pending, or arising, before the courts at every level, the tax appeal committees, the conciliation committees and the grievance committees, where the dispute arises under the Income Tax Law or any other tax law administered by the ETA, whatever stage the case or appeal has reached (article 1).

Applications are decided by committees formed by decree of the Minister of Finance. Each is chaired by a specialist from outside the ETA and includes a member of the judiciary of at least counsellor rank and an ETA technical member (article 2).

The taxpayer files the application with the ETA on the prescribed form, stating the subject of the dispute, the number of the case or appeal and the grounds, with copies of the supporting documents (article 3). If the committee considers the application serious, the court or committee hearing the dispute is notified, and proceedings are suspended by operation of law for three months. The suspension renews automatically for a further three months unless the ETA gives notice that no settlement has been reached (article 4).

The committee issues a recommendation in the light of established legal principles and the circumstances of the case. If the taxpayer accepts it in writing within five days of its being presented, and the minutes are approved by the Minister of Finance or the Minister's delegate, the minutes have the force of an enforceable instrument and the dispute is deemed settled by operation of law. If the recommendation is rejected, or the suspension expires without a settlement, the proceedings resume by operation of law (article 5).

Scope of the renewal and the deadline

Article 1 of the Renewal Law provides that:

The committees formed under the provisions of Law No. 79 of 2016 shall continue to hear applications not yet decided, and shall decide new applications submitted to them up to 31 December 2026.

The Renewal Law makes no change to the mechanism or to the conditions for admitting an application. It has two articles: the renewal itself, and publication and entry into force.

The deadline is firm. The committees have no jurisdiction over new applications submitted after 31 December 2026, and the dispute then continues before the body hearing it. The Settlement Law is temporary by its own terms: article 8 gave it a life of one year from the day after its publication, and it has continued only through successive renewal laws. A further renewal should not be assumed.

Distinction from Law No. 5 of 2025

The two are frequently confused, and the difference is material.

A taxpayer who missed the Law No. 5 of 2025 window cannot now obtain its terms, and a settlement under the Settlement Law rests on the committee's recommendation in each file rather than on a fixed rate.

The late payment charge while a dispute is running

For income tax, the late payment charge is due under article 110 of Income Tax Law No. 91 of 2005 on tax not paid by its due date. It is not suspended by an appeal, nor by the suspension of proceedings that follows a settlement application. If the dispute ends with all or part of the tax upheld, the charge is due on that amount for the whole period from its due date to payment.

The charge is computed at the Central Bank of Egypt's credit and discount rate on 1 January, plus 2%, disregarding fractions of a month and of a pound. Under ETA Circular No. 1 of 2026 the rate on 1 January 2026 was 20.50%, giving a charge of 22.50% for 2026.

On disputed tax of EGP 500,000 that is ultimately upheld, the charge for 2026 alone is EGP 112,500. For 2021, at that year's rate of 10.75%, it is EGP 53,750.

Each year carries the rate set on 1 January of that year, so a charge accruing over several years is computed at several rates. It cannot be estimated at a single rate or at an average.

For a group with an Egyptian subsidiary, an unresolved dispute therefore remains an uncertain tax position that grows measurably with each reporting period.

Implications for taxpayers

• Schedule all live tax disputes, showing the amounts, the tax periods, the body hearing each dispute and the stage it has reached.
• Estimate the likely cost of settlement against the probable outcome of the dispute plus the late payment charge accrued to the expected date of determination.
• Decide on each file separately: apply for settlement, or continue the litigation.
• Assemble the supporting documents — the audit file, correspondence, appeal committee decisions and evidence of payment — so that the application can be filed well before the deadline.
• Keep other live deadlines in view, in particular the sixty days from the day following notification within which an appeal committee decision may be challenged before the Administrative Court (article 65 of Unified Tax Procedures Law No. 206 of 2020).

Preparing an application and its supporting documents takes time, so files are better reviewed now than as the deadline approaches. The firm's Tax Department reviews live disputes and prepares and pursues settlement applications.

Mahmoud Nassef, CA, ESAA, MEST — Founder Partner
Member of the Egyptian Society of Accountants & Auditors (ESAA) and of the Egyptian Tax Society (MEST)
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Disclaimer: This bulletin is prepared for general information on the legislation in force at the date of its publication. It does not constitute a professional opinion or tax or legal advice on any particular matter, and it should not be relied upon in place of advice based on an examination of the circumstances of each case. Nassef & Partners International accepts no responsibility for any action taken, or refrained from, in reliance on its contents. The positions stated remain subject to subsequent legislation and decisions.