Reda Abdel Qader Ghareeb, head of the Egyptian Tax Authority, confirmed that a memorandum was presented to Finance Minister Mohamed Maait regarding the extent of the eligibility of companies operating in free zones to support exports under the provisions of Law No. 155 of 2002.
reda add In his letter to the head of the Customs Authority, Shahat Ghatouri, that the Minister of Finance agreed with the opinion of the Egyptian Tax Authority in this regard , which concluded that in light of the text of Article II of Law 155 of 2002 on export development in items (a) through (g), it is clear that it does not It applies to projects and companies established in free zones because they enjoy customs and tax advantages that companies established outside free zones do not enjoy. Thus, projects and companies established in free zones are not entitled to benefit from the export support contained in the provisions of Law 155 of 2002 on export development.
from his side, Shahat Ghaturi, head of the Customs Authority, instructed the implementation of what was stated in the letter of the head of the Tax Authority, through the Director General of Customs Affairs, the Chairman of the Committee on Customs Policies and Procedures , and the Head of Customs Regions. What are the free zones in the customs authority data According to the data of the Customs Authority, the free zones are divided into a free city and are established under a law such as Law No. 12 of 1977 establishing the Port Said Free City. and public free zone, such as (The public free zone in Alexandria “Amreya” – the general free zone in Cairo “Nasr City” – the general free zone in Port Said – the general free zone in Suez “Adabiyah – Port Tawfiq” – the general free zone in Ismailia – the public free zone in Damietta – the public free zone in Qena Governorate” Qift “- General Free Zone in Shebin El-Kom – General Free Zone in 6th of October City “Media” – General Free Zone in East Al-Tari’a Port Said – General Free Zone in Al-Matahra East of the Nile in Minya Governorate – Public Free Zone in Nuweiba City in South Sinai – General Free Zone in New Aswan – Zone Public Free Zone of Badr City ) .
Free zones work mechanisms :
It is established by a decision of the Prime Minister based on the proposal of the competent minister and after the approval of the Board of Directors of the General Investment Authority – and its main main objective is to export outside the country. Its area is defined and surrounded by a fence, and it is divided to set up private projects with Egyptian, foreign, and mixed capital. These areas are considered outside the state, and they are either production, storage, service or mixed projects and consist of many companies and projects.
As for the private free zones (there are more than 220 private free zones, and they are established by a decision of the Prime Minister based on a proposal by the competent minister, and are limited to one or more projects in similar activities when their nature requires that, and a decision is issued by the authority’s board of directors specifying the procedures for issuing licenses to practice the activity Projects, their renewal and modifications. Projects operating under the free zone system may switch to the internal investment system, and the executive regulations of this law specify the conditions for the transformation and its controls and the customs treatment of equipment, machinery, production equipment, lines and spare parts required by the licensed activity.
Import and export controls in free zones
With regard to importing and exporting from free zones, the data of the Customs Authority states that, taking into account the provisions established by laws and regulations regarding preventing the circulation of goods or materials, the goods exported by free zone projects outside the country or imported from outside the country in order to carry out their activities are not subject to the rules of import and export, nor Customs procedures for exports and imports. There is also a case for importing or exporting from a governor inside the country, provided that the import from the free zones into the country is in accordance with the general rules for importing from abroad, and thus the import rules are met on the goods imported from the free zone to the local market as if they were imported from abroad
Importation from the free zones into the country shall not take place except within the limits, in proportions, in quantity, and for the period of time stipulated in the licensing decision to practice the activity. All projects that invest in the free zone system are subject to customs and tax control in accordance with the rules issued by a decision of the Authority’s Board of Directors in coordination with the Egyptian Customs and Tax Authority. In the case of importing or exporting from a governor outside the country, the goods exported by free zone projects outside the country or imported from outside the country are not subject to customs taxes, value-added tax and other taxes and fees. All necessary tools, equipment, machines and means of transportation of all kinds, which are required to carry out the licensed activity of the projects located within the free zones of all kinds “except for passenger cars. It is subject to zero-rate tax on goods or services exported by the zone projects outside the country – it is also subject to zero-rate tax on the goods or services imported for these projects necessary to carry out the licensed activity inside the free zones except for passenger cars. Free to purchase goods or receive taxable services as they are necessary to carry out the licensed activity within the free zone, so those goods and services are subject to tax at a zero rate, Provided that the following documents are available with the seller of the commodity or the service provider, which are (a copy of the invoice for selling the commodity exported to the zone – a letter issued by the General Authority for Investment – a copy of the export certificate (Customs Form 13) containing detailed data. Customs taxes are also paid on goods imported from the free zone For the local market as if it were imported from abroad, just as when importing goods from the free zones, no industrial operations (storage only) were carried out on them, when assessing the value and collecting taxes and fees , The value for customs purposes is estimated in accordance with the World Trade Organization agreement according to the contractual value between the seller in the free zones and the local importer for the purpose of release from the free zone, and with regard to the estimated value for collecting transport guarantees from ports and departments to the free zones, their purpose ends as soon as the goods arrive in the free zone.