Egypt has a legislative requirement for local filing which is in effect despite Egypt not yet meeting all of the consistency, confidentiality and appropriate use conditions. It is therefore recommendations that Egypt take steps to ensure that local filing only occurs in the circumstances permitted under the minimum standard.
Where an MNE Group draws up, or would draw up, its Consolidated Financial Statements in a currency other than that specified by Egypt, the reference to Egypt’s threshold has the effect as if it were a reference to the equivalent in that currency at the average exchange rate for the accounting period. While this provision would not create an issue for MNE Groups whose Ultimate Parent Entity is a tax resident in Egypt, it may be incompatible with the guidance on currency fluctuations for MNE Groups whose Ultimate Parent Entity is located in another jurisdiction, if local filing requirements were applied in respect of a Constituent Entity (which is an Egypt tax resident) of an MNE Group which does not reach the threshold as determined in the jurisdiction of the Ultimate Parent Entity of such a Group.
It is recommended that Egypt clarify that the annual consolidated group revenue threshold calculation rule applies in line with the OECD guidance on currency fluctuations in respect of an MNE Group whose Ultimate Parent Entity is located in a jurisdiction other than Egypt.