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Egypt

Financial Year – Each company can choose their financial year as they please, provided that it is 12 months.
Currency – Egyptian pound (EGP)

Corporate Tax Summary

Residence – An entity is resident in Egypt if any of the following conditions are met:

  1. Established in accordance with Egyptian Law
  2. Headquartered in Egypt, either formally or practically
  3. More than 50% owned by the state, or a state owned entity

Basis of Taxation – Net income from all commercial and industrial activities realised in Egypt or through subsidiaries abroad, including income from the sale of assets, reparations, securities, and liquidation proceedings.

Reference
Corporate Income Tax Rate (%) 22.5%
Branch Tax Rate (%) 22.5%
Withholding Tax Rate:
Dividends 10%
Payments to non-residents 20%
Purchases and construction 1%
Services 3%
Net Operating Losses (Years)
Carry Back N/A
Carry Forward 5 years

Individual Tax Summary

Residence – An individual is a resident in Egypt if any of the following conditions are met:

  1. Has permanent residence in Egypt
  2. Resided in Egypt for 183 consecutive or non-consecutive days within a 12-month period
  3. Egyptian national working abroad and paid from an Egyptian source

Basis of Taxation – Total net income realised in Egypt, or abroad if Egypt is the centre of their operations, and non-residents on their income realised in Egypt.

Filing Status – Annual

Personal Income Tax Rates

From 1 600,001 700,001 800,001 900,001 1,000,001
To 600,000 700,000 800,000 900,000 1,000,000 +
0% 1-15,000
2.5% 15,001-30,000 1-30,000
10% 30,001 – 45,000 30,001 – 45,000 1 – 45,000
15% 45,001 – 60,000 45,001 – 60,000 45,001 – 60,000 1 – 60,000
20% 60,001 – 200,000 60,001 – 200,000 60,001 – 200,000 60,001 – 200,000 1 – 200,000
22.5% 200,001 – 400,000 200,001 – 400,000 200,001 – 400,000 200,001 – 400,000 200,001 – 400,000 1 – 400,000
25% 400,000 + 400,000 + 400,000 + 400,000 + 400,000 + 400,000 +

Sample calculation:
For taxable income between EGP 1 and 600,000, the income is taxed according to the amounts in the first column, i.e. the first 15k are taxed at 0%; from 15k to 30k at 2.5%; from 30k to 45k at 10% … etc.

Value Added Tax (VAT)

Rate General rate of 14%. Special rates apply for specific goods and services.
Taxable Transactions All sales of goods and services, except those specifically exempted by law.
Registration
  • Any individual or entity selling goods or services subject to VAT whose total annual sales exceeds EGP 500,000 should register within 30 days of reaching this threshold.
  • Any importer of goods or services must register, regardless of the amount of sales.
  • Non-residents selling goods or services to residents must appoint a representative to fulfil their obligations under the VAT law on their behalf.
Filing and Payment All registered taxpayers must submit a VAT return and pay the applicable tax on a monthly basis. The return must be submitted within 30 days after the end of the month.

Other Taxes Payable

Tax Reference
Payroll Tax Personal income tax rates apply to the payroll after the deduction of a personal exemption of EGP 9,000 annually.
Stamp Duty
(Transfer Tax)
There are two distinct types of stamp tax, which are imposed on legal documents, deeds, banking transactions, company formation, insurance premiums, and other transactions, as follows:

The nominal stamp tax is imposed on documents, regardless of their value. The tax rate for items such as contracts is EGP 0.9 for each paper.
A percentage or proportional stamp tax is levied based on the value of the transaction.
An annual proportional stamp tax is imposed on a bank’s loans at the rate of 0.4%, shared by the bank and the client. This stamp tax is due on a quarterly basis on the beginning balance of each quarter of credit facilities and loans and advances provided by Egyptian banks or branches of foreign banks during the financial year in addition to the amounts utilised within the quarter. Loans from other establishments are not subject to this tax.

Stamp tax is imposed on advertisements at the rate of 20%.

Land Tax Real estate tax is levied annually on all constructed real estate units, with the exemption of schools, orphanages, charitable organisations, and private residences with a market value of less than EGP 2 million. This tax covers land and buildings, excluding plant and machinery.

Such tax is assessed on the rental value of the land and building, and these value assessments are set by the committees, after the approval of the Minister or whomever the Minister delegates, and published in the Official Journal. Based on this announcement, any taxpayer can appeal the rental value assessment.

The real estate tax rate is 10% of the rental value, and the calculation of the rental value differs for residential units and non-residential units. The law provides for specific deductions to account for all the expenses incurred by the taxpayer, including maintenance costs.

Last updated: 11.11.2020

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