(Stamp Tax disputes and complexity)

The applied arts stamp fee is a financial obligation imposed by Law No. 67 of 1974, which established the Syndicate of
Applied Professions, on all executive artistic contracts that are supervised or executed by a member of the Syndicate.
The Syndicate claims that this fee is a source of income for its members and a way to protect their rights and interests.
However, the construction and investment companies argue that this fee is an unfair and illegal tax that violates the
principle of equality and justice, and that the Syndicate has no authority to collect it from activities that are not related to
its members’ professions.
The legal disputes have reached different courts and resulted in different rulings
 In 1997, the Cairo Court of Appeal ruled that the Syndicate of Applicators has no right to collect stamp duty
from the Arab Contractors Company, as it has already paid it to the Engineers Syndicate. The court also
ordered the Syndicate of Applicators to refund 1.246 million Egyptian pounds that it had previously obtained
from the company.
 In 2003, the Cairo Court of Appeal ruled in favor of the Syndicate of Applied Professions, saying that it has
the right to collect the fee for all construction activities, even if they are not supervised or executed by
members of the Syndicate. The court also mentioned a project to build a complex of courts in Benha, Qalyubia
Governorate, which was carried out by the Arab Contractors Company and supervised by engineers who are
members of the Engineers Syndicate.
 In 2004, the Supreme Constitutional Court ruled that the collection of a stamp fee from construction and
investment companies by the Syndicate of Applied Professions is unconstitutional in case number 128 of
judicial year 22. The ruling states that the Syndicate’s stamp fee is a general tax that violates the principle of
equality and justice, and that the Syndicate does not have the authority to impose it on activities that are not
related to its members’ professions. The ruling also cites previous judgments from the Supreme Constitutional
Court and the Council of State that support its reasoning.
 In April 2023 the Supreme Constitutional Court reversed its previous ruling and upheld the constitutionality of
the stamp fee in case number 256 of judicial year 41. The court rejected a lawsuit challenging the
constitutionality of Article 52 of Law No. 67 of 1974, which established the Syndicate. The court found that
the financial obligation imposed by this article has the characteristics of a general tax and that its allocation
directly to the Syndicate is in accordance with Article 38 of the current Constitution. This article allows the
legislature to allocate a portion of public resources to one of the essential interests that the Constitution gives
special attention to and makes one of its objectives. The legislature may also determine the difficulty of
allocating this resource from the state’s general budget given its burdens.
 The court also stated that the stamp fee does not violate the principle of equality and justice, as it applies to all
executive artistic contracts regardless of who supervises or executes them. The court added that the stamp fee
does not infringe on the freedom of contract, as it does not affect the validity or enforceability of the contracts.
The court also dismissed the argument that the stamp fee is an interference with private property, as it is a
reasonable and proportional contribution to public expenditure.

As you can see, there is no clear or consistent legal position on this issue. The conflict between the Syndicate of
Applied Professions and the construction and investment companies continues to this day, with many lawsuits
and appeals pending in various courts. This situation creates uncertainty and confusion for both parties, as well
as for other stakeholders involved in the construction sector.