Tax seizure on bank accounts is one of the legal procedures used by the Egyptian Tax Authority to ensure the collection of tax dues from taxpayers and registrants who have failed to pay their liabilities or who have not filed objections within the legally specified deadlines. This measure is part of the effort to enhance tax compliance and guarantee the state’s rights, as the Attachment of Funds in Banks occurs in specific cases such as liabilities resulting from final tax assessments or failure to receive tax forms due to outdated information about the taxpayer. At the same time, the Tax Authority provides facilities to lift the seizure through flexible mechanisms, including payment of a portion of the debt or installment payments under specific conditions, to support investment and build trust with taxpayers.

Reasons for Freezing a Bank Account

Seizure of Bank Accounts According to the Executive Instructions of the Egyptian Tax Authority:

1. Failure to Appeal within the Legal Deadline:

• If the taxpayer or registrant did not file an appeal against the tax assessment decisions (such as Form 19 for Income Tax or Form 15 for VAT) within the legally specified period.
• If the tax forms sent were returned without being received by the taxpayer or registrant (such as indicators like “Not Found,” “Unknown,” or “Closed”).

1. Outstanding Amounts Resulting from Final Judgments or Decisions:

• If the liability is due for payment based on decisions made by an internal committee, a tax appeal committee, a court ruling, a tax dispute settlement committee, or a final tax assessment review committee.

1. Failure to Pay or Schedule the Debt:

• If the taxpayer did not pay the required portion to lift the seizure (1% or 5% of the debt value, depending on the case).
• If there was no agreement on the installment plan for the remaining outstanding debt according to the specified mechanisms (such as installment over no less than two years).

Procedures for Lifting a Tax Lien 2024

Procedures for Lifting a Tax Lien 2024 are based on the executive instructions issued by the Egyptian Tax Authority, which include:

1. Cases of Removing Tax Liens

First Case:

The seizure can be lifted if the taxpayer or registrant pays 1% of the seized debt in the following cases:

• If the debt is due to the failure to file an objection within the legal timeframe for tax assessment forms (such as Form 19 for income tax or Form 15 for value-added tax).
• If the debt is due to notifications from the Public Prosecution because the tax forms were returned with indicators such as “not found,” “unknown,” or “closed,” or if the notice was posted publicly. In this case, the taxpayer or registrant can file an objection after paying the required percentage.

Second Case:

The seizure can be lifted if the taxpayer pays 5% of the seized debt, provided that the seizure was based on one of the following:

• A decision from an internal committee.
• A decision from an objection committee.
• A court ruling.
• A decision from the Tax Dispute Resolution Committee.
• A decision from the Committee for Reconsideration of Final Tax Assessment.
• The taxpayer must also agree to pay the remaining 95% of the debt in installments over at least two years to alleviate the financial burden resulting from the delay.

1. Implementation Mechanisms and Guidelines:

Based on Executive Instructions No. (10) of 2024 and the extension of Executive Instructions No. (28) of 2023, these facilities have been extended to ease procedures for taxpayers and build trust between them and the Tax Authority. Accordingly, Taxpayers may submit a request for Suspension of Administrative Seizure Proceedings after paying the specified percentages of the debt.This is where El Laithy & Associates Lawyers Firm offers its legal expertise in resolving tax disputes and assisting taxpayers with tax seizure lifting procedures. The firm provides the necessary legal support to ensure full compliance with current tax instructions. The firm offers comprehensive services, including legal analysis of executive instructions, monitoring payment or installment procedures, and preparing the necessary files to protect clients’ rights and enhance their interests.

1. Deadline to Benefit from the Tax Lien Lifting Decision

• Taxpayers can benefit from the mechanisms for lifting the tax seizure until December 31, 2024, according to the issued executive instructions.

If you need specialized legal support to deal with tax seizures or ensure compliance with the tax executive instructions, contact El Laithy & Associates Lawyers Firm now. Our specialized team is ready to provide effective legal solutions that protect your interests and enhance your financial stability. Reach out to us, and let us help you take the right step.  

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FAQs

Does a Tax Lien Prevent Travel?

Yes, the tax seizure can prevent travel if the taxpayer has not settled the tax debts. Relevant authorities may issue a travel ban to ensure the payment of those dues.

Can Investment Certificates Be Seized?

Yes, it is possible to seize investment certificates if they are among the assets that can be seized according to the applicable tax laws.

Can Bank Deposits Be Seized?

Yes, it is permissible to seize bank deposits according to the governing laws, such as the Civil and Commercial Procedures Law. A creditor can seize bank deposits if they have an enforcement instrument or a court ruling confirming the outstanding debt. However, the seizure can only occur according to legal procedures, which stipulate the necessity of a court ruling or permission from the execution judge in some cases.