Egypt: keeping the tax registration number when a partnership converts

A partnership that converts into a capital company keeps the tax registration number issued to it before the conversion, provided that it files with the competent tax office a request to keep the number and to examine its tax file, together with an undertaking to pay all the taxes due from it before the change of its legal entity. The rule was issued in 2026 as Periodic Book No. 3 of 2026 of the Egyptian Tax Authority (the ETA), signed by the head of the ETA. It amends Periodic Book No. 7 of 2023 on the same subject and applies from its date of issue. The book also requires the ETA's executive units to examine the taxpayer's file for the period before the change of legal form within no more than 90 days from the date the examination request is filed.

Under the Income Tax Law issued by Law No. 91 of 2005, partnerships are general partnerships and limited partnerships (article 1 of Law 91). The book is addressed to the ETA's executive units and the bodies charged with following up its implementation, but it matters to every company of either form that plans to convert, because it sets what the company must file to keep its number. The forms of capital company and what each requires in founders and capital are covered in Company forms in Egypt.

The request and the undertaking

The book states the right to keep the number in these words, which we quote here, as elsewhere in this article, in unofficial translation:

"Where the legal form changes from a partnership to a capital company, the company is entitled to keep the tax registration number issued to it before the change of its legal entity, provided that the following are complied with"

The two conditions are a request to the competent tax office to keep the tax registration number and to examine the tax file, and an undertaking to that office to pay all the taxes due from the company before the change of legal entity. The book grounds the undertaking on "the continuity of the company's patrimony after the amendment as a natural effect of changing the legal form". Once both conditions are met, keeping the tax registration number on the tax system is permitted on the basis of a memorandum of the change of legal form retaining the same registration number, prepared by the competent unit.

The book does not set an amount for the undertaking or a date for payment. There are two views on its scope: that it covers only what had actually fallen due from the company before the conversion, or that it covers everything due for the period before the conversion, including what the examination finds. The point is unsettled: no express provision or published judgment resolves it. In our view, the second is the stronger, because the book makes examination of the tax file part of the request itself and bases the undertaking on the continuity of the company's patrimony after the conversion. Until the point is settled, we recommend identifying what is due for the period before the conversion before signing the undertaking, on the basis that it covers what the examination finds.

What changed from Periodic Book 7 of 2023

Book 7 was issued because the ETA had found that converting a partnership into a capital company was accompanied by a change of its tax registration number, which caused the company some problems in its dealings. The ETA gives each taxpayer or person liable to tax one unified tax registration number for all the taxes it is subject to; the ETA, the taxpayer and other bodies and establishments must use it in all dealings, and it is shown on all notices, records, documents and invoices (article 26 of the Unified Tax Procedures Law issued by Law No. 206 of 2020).

Book 3 does not say which parts of Book 7 it replaces. It restates the rules in new wording, and comparing the two texts shows four differences:

The instruction to apply article 53 of Law 91 to revaluation gains is the same in substance in both books.

Examining the period before the conversion

The request that the book requires for keeping the number includes examination of the tax file, and the 90-day maximum for the examination runs from the date the examination request is filed. The file for the period before the conversion should therefore be ready when the request is filed.

The examination plan issued as Periodic Book No. 4 of 2026 lists a change of legal entity among the urgent cases in which tax centres and offices continue to complete examination, assessment and collection; see Egypt's tax examination plan to 30 June 2027. The stages of an examination and what a taxpayer is asked for are covered in Egypt tax examinations.

Revaluation gains

The book requires the executive units to apply article 53 of Law 91 to capital gains arising from revaluation where the legal form of a juristic person changes, under the conditions in articles 61 to 64 of the law's executive regulations issued by Minister of Finance Decree No. 991 of 2005. Article 53, as replaced by Law No. 76 of 2017, makes those gains taxable, counts the conversion of a partnership into a capital company as a change of legal form, and allows deferral:

"The juristic person may defer liability to tax, provided that the assets and liabilities are recorded at their book value at the time of the change of legal form for the purpose of computing the tax, and that depreciation of the assets and the carrying forward of provisions and reserves are computed under the rules applicable before the change" (article 53 of Law 91).

Deferral also requires that the shares or quotas resulting from the change of legal form are not disposed of within the three years following the date of the change. The deferred tax becomes due if the legal form of the juristic person changes again, or if it is dissolved for any reason. Liquidation and the tax obligations that remain after it are covered in Voluntary Liquidation and Strike-Off of an Egyptian Company.

Before filing the request to keep the number

• Confirm that the case is a conversion of a partnership into a capital company, which is the case the book covers.
• Identify what may be due for the period before the conversion before signing the undertaking, then file the request and the undertaking together with the competent tax office.
• Prepare that period's returns, books and documents for examination; the books a business must keep are covered in Egypt's Mandatory Commercial Books and Electronic Bookkeeping.
• To defer tax on revaluation gains, meet the conditions of article 53 from the date of the conversion, and keep a schedule of the book values of assets and liabilities at that date.
• Do not dispose of the shares or quotas resulting from the conversion within the three years following it, and work out the effect of any further change of legal form or of the company's dissolution, since either makes the deferred tax due.

The firm's Tax Department prepares the request to keep the tax registration number and the undertaking that goes with it, and treats revaluation gains under article 53, working with the Corporate Legal Department on the conversion itself.

Mahmoud Nassef, Founder Partner
Chartered Accountant, Ministry of Finance, Egypt

Member, Egyptian Society of Accountants & Auditors
Member, Egyptian Tax Society
Member, Egyptian Society for Public Finance and Taxation

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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.