Last modified: 15/06/2024 11:45

Corporate taxation

	Rate
Corporate income tax rate	22.5%
Branch tax rate	22.5%
Capital gains tax rate	22.5%

1. Capital gains are added to normal activities gains and treated the same.

Residence: 1-Nationals . 2-Foreigners who are staying in Egypt for more than 183 days consecutively or with interruptions. Foreign entities are considered as residents of Egypt if they meet one of the following conditions: 1. The entity is established according to the Egyptian law. 2. The government or a public authority owns more than 50% of the capital of the entity. 3. The effective place of management is in Egypt. The executive regulations of the law indicate that Egypt is considered the main place of management if the entity meets any two of the following conditions: 1. Daily managerial decisions take place in Egypt. 2. Members of the board of directors hold their meetings in Egypt. 3. At least 50% of the board members or managers reside in Egypt. 4. The major shareholders (owners of more than 50% of the shares or voting rights) reside in Egypt.

Basis: World wide income. Amendments can be foreign permanent establishments or real estate.

Taxable income: Net accounting profits as amended by the tax law provisions . Main adjustments for the accounting profits are accounting depreciation that are replaced by tax depreciation and provisions.

Significant local taxes on income: Unified tax for indiviuals at progrissive rates up to 25% Corporate tax for companies at flat rate of 22.5% plus 10% on dividends

Alternative minimum tax: n/a

Taxation of dividends: 5% for listed shares and the Egyptian stock exchange 10% for none listed companies

Capital gains: Capital gains are added to normal activities gains /losses and taxed the same way

Losses: Losses are carried forward for 5 years.

Foreign tax relief: The foreign tax is offsetable againest the Egyptian taxes

Participation exemption: Participation exemption is givin to the resedent holding companies at 90% of dividends of resident affiliates

Holding-company regime: See participation exemption. No group taxation is applied.

Tax-based incentives: No exemptions. Some incentives are givin to investment companies on the basis of the location of production and activities.

Group relief/fiscal unity: No group relief available

Small company/alternative tax regimes: A simplified tax regime is applied for SME’s as a fixed rate at the maximum of 1% of the total revenues that not exceed LE. 10 M. ( Currently 330 k US$.)

Corporate taxation: compliance

Tax year: January / December for salary tax and Corporate tax Intermediate years are accepted for companies

Consolidated returns: Returns are prepared and filed on a separate entity basis

Filing and payment: The payment and filing of the corporate tax are made within 4 months from the date of ending the fnancial statments.

Penalties: Penalties of none filing are progressive up to EP 2M. And delay filing is penalized at the Central Bank Of Egypt ruling interest rate plus 2%.

Rulings: Income tax law 91/2005 as amended and its executive regulations. Is there a possibility for individual rulings for companies?

Taxation of individuals

	Rate
	individual income tax
Taxable income from 0   : LE. 21000	0       1
from 21001:    30000	2.5     1   2  3  4   5    6
from 30001:     45000	10      1        3  4   5    6
from 45001 :     60000	15       1           4   5     6
from 60001 :    200000	20        1                5     6
from 200001  : 400000	22.5      1                      6
from 400001 :  1200000	25           1

                          Above 1200000                                                                         27.5     1

1. Applied rates for income up to LE.600 000 per annum.
2. Cancelled for income between LE.600 000 up to 700 000.
3. . Cancelled for income between LE. 700 000 up to 800 000
4. . Cancelled for income between LE.800 000 up to 900 000
5. Cancelled for income between LE.900 000 up to 1000 000
6. Cancelled for income  between LE. 1000 000 to 1200 000

Residence: Foreigners who stay in Egypt for more than 183 days per year .

Basis: Net income after excluding all related expenses

Taxable income: Commercial and industrial activities profit Profissionals profits Real Estate wealth revenues

Capital gains: Treated as normal gains

Deductions and allowances: All related expenses to revenues Tax depreciation Donnations to government with no limit Donnations to Charity registered NGO’s at a maximum of 10% of the net taxable profit.

Foreign tax relief: Allowed on imported revenues within the limit of the local tax rates.

Taxation of individuals: compliance

Tax year: Calendare year

Filing and payment: Within 3 months from the year end

Penalties: Penalties of none filin are progressive up to EP 2M. And delay filing is penalized at the Central Bank Of Egypt ruling enterest rate plus 2%.

Rulings: Income tax law 91/2005 as amended and its executive regulations.

Withholding taxes

Type of Payment	Resident recipients		Non-residents recipients
	Company	Individual	Company	Individual
	Rate (%)	Rate (%)	Rate (%)	Rate (%)
Royalties	22.5	22.5	20 *	20*
Interest	22.5	22.5	20**	20**
Foreign services	22.5	22.5	20***	20***
Dividends	10****	10****	10****	****

* Reduced in case of double tax treaty

** Resdused to 15% in most of the tax treaties.

***Exempted in case of treaty

**** reduced to 5% for listed companies and treated in different ways in tax treaties.

1. xxxxxxxx

Branch remittance tax: Branch dividinds are subject to dividends tax at 10% within 60 days from the end of the financial year even if not remitted.

Anti-avoidance legislation

Transfer pricing: There are compliance trancfer pricing rules for Related party transactions exceeding LE.15 M ( US$ 312k per annum)

Interest restriction: Thin Capitalization rule is applied up to 4 loans 1 Equity

Controlled foreign companies: Control of 50% or more are subject to transfer pricing rules.

Hybrid mismatches: NA

Disclosure requirements: Related party transactions disclusure is needed in the tax return

Exit taxes: Investment law provides for an exemption from any governmental calims within 120 days from the notification date of liquidation.

General anti-avoidance rule: Existing but not applied.

Digital services tax and Other significant anti-avoidance legislation: Not yet applied except for VAT

Value-added tax/Goods and services tax

Type of tax: Value Added Tax (VAT) Table Tax (TT)

Standard rate: VAT at 14% & TT at different rates or fixed amounts

Reduced rates: Zero Rates for exports

Registration: Registration threshhold at LE. 500 k

Filing and payment: Monthly

Social security contributions

	Employer		Employee
	Rate (%)		Rate (%)
Salaries at amaximum of LE.10900 per month	11		18.75

Self-employed

NA

Other taxes

Capital duty: NA

Immovable property taxes: Real Estate tax is assesd on owners at 10% of 60% of the Market value

Transfer tax: NA

Stamp duty: There is Stamp tax on advirtising at 15% and loans at 0.4% to be shared between the bank and the debtor Also minimal amounts on different types of documents.

Net wealth/worth tax: NA

Inheritance/gift taxes: NA

Tax treaties

Egypt has signed more than 65 treaties with different countries. The majority of the treaties rduce the withholding tax on interest to be 15% instead of 20%. Also tax on royalties is reduced to different rates from 5 to 15 % instead of 20%. Additinally , tax on foriegn servces are reduced to zero from 20% in all treaties.