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flag Egypt Egypt: Tax System

In this page: Corporate Taxes | Accounting Rules | Consumption Taxes | Individual Taxes | Double Taxation Treaties | Sources of Fiscal Information

 

Corporate Taxes

Tax Base For Resident and Foreign Companies
For additional information on consumption tax for non-resident access the Egypt PKF Tax Guide.
 

Tax Rate

Legal Entity Income Tax Income below EGP 10 million: 20%
Income exceeding EGP 10 million: 25%
Tax on the Canal de Suez operator Profits 40%
For oil and gas companies 40.55%
 
Tax Rate For Foreign Companies
None
Capital Gains Taxation
Long-term capital gains are subject to tax on the companies at the standard rate (20%). Profits from movable capital are not taxable.
Main Allowable Deductions and Tax Credits
Setting up in special economic zones entitles the company to tax benefits. They are only taxed at 1% of their profits or operations. For additional information access Tax Policies in Egypt on the Egyptian-British Chamber of Commerce's Website.
Other Corporate Taxes
A tax on real-estate assets has been put in place in June 2008. It is up to 10% of the rental value whether the property is rented out or not. If the property is rented, the rental value is the effective value of rent collected by the owner if it is higher than 7% of the purchase value. The owner is exempted from landed property if the value of the property is less than or equal to EGP 500,000.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  Egypt Middle East & North Africa الولايات المتحدة Germany
Number of Payments of Taxes per Year 29.0 19.0 11.0 9.0
Time Taken For Administrative Formalities (Hours) 392.0 184.0 175.0 207.0
Total Share of Taxes (% of Profit) 32.3 32.3 46.7 46.8

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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Accounting Rules

 

Accounting System

Accounting Standards
The accounting obligations result from the Companies Act no. 159 of 1981 and Financial Market and Money Market Act no. 95 of 1992. The Accounting Plan (the Egyptian accounting standards) is close to international accounting standards.
Accounting Regulation Bodies
EFSA, Egyptian Financial Supervisory Authority
Accounting Law
All companies have to present an audit report, an assessment, income statement and a profit and loss account to their shareholders each year.  After having been quoted on the stock market, a company should present a detailed activity status every three months. Every year, or more or less at the end of every fiscal year, it should give a report of its activities and accounts to the Egyptian Financial Supervisory Authority
Difference Between National and International Standards (IAS/IFRS)
The Egyptian accounting system is close to the international accounting standards. for additional information, access the Egyptian Financial Supervisory authority (EFSA) website.
Accounting News
Economics and Accounting News website
 

Accounting Practices

Tax Year
The fiscal year starts on January 1st and ends on December 31st the same year.
Accounting Reports
According to the law, all companies must present to the shareholders during their annual meeting an audit report, a balance sheet, an income statement and cash flow statement.
Publication Requirements
After its initial public offering, the company must present every three months a detailed report of its business (business progress and results).
Each year, a progress report and a report of the accounts (before certification) must be sent to the Capital Market Authority one month after the fiscal year end at the latest.
The certified accounts cited on the Official Schedule 1 must be published in two reference journals of which at least one must be in the Arabic language.
 

Accountancy Profession

Accountants
There are 7,000 to 8,000 auditors registered in Egypt.
Professional Accountancy Bodies
Egyptian Society of Accountants and Auditors (ESAASC), on IFAC website.
Member of the International Federation of Accountants (IFAC)
The Egyptian Society of Accountants and Auditors is a member of the International Federation of Accountants.
Member of Other Federation of Accountants
Member of the ACCA (Gobal Body for Professional Accoutants).
Audit Bodies
All the accounts and reports are likely to be verified by government authorities such as the Tax Department (Internal Revenue) or the corporate department of the Department of Economy and Industry.
 
 

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Consumption Taxes

Nature of the Tax
A "General Sales Tax (GST)" applies.
Standard Rate
The GST (General Sales Tax) rate is 10%, except for some products :
- 25% to televisions, radios, jewelry and certain motors vehicles;
- 30% to luxury goods such as cosmetics, video cameras, and high-value vehicle.
Reduced Tax Rate
Reduced rates of 5% or 10%, depending on their type:
- 5% to some foodstuffs, fertilizers and locally produced medicines;
- 10% to hotel and tourism services, specific international communications and certain services.
Exclusion From Taxation
Basic foodstuffs, catering, natural gas, books and magazines and goods used for scientific, educative and cultural purposes are exempt of tax.
Method of Calculation, Declaration and Settlement
Apply to the supply of most goods and services at a rate of 10%.
Other Consumption Taxes
Excise duty is also collected on alcoholic drinks and coffee. An additional duty is collected on brandy, cognac, gin and whisky.

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Individual Taxes

Tax Base For Residents and Non-Residents
Non-residents are subject to tax on income earned or realised in Egypt only.
Dividends paid to non-residents are not subject to withholding tax under Egyptian domestic law. 
 

Tax Rate

Individual income tax Progressive rate from 0% to 25%
Up to EGP 5,000 0%
From EGP 5,001 to 20,000 10%
From EGP 20,001 to 40,000 15%
From EGP 40,001 to 10,000,000 20%
More than EGP 10,000,000 25%
 
Allowable Deductions and Tax Credits
Deductible Costs:
- Pension scheme amounts;
- Life and health insurance.
Special Expatriate Tax Regime
No special tax regime for expatriates.
Capital Tax Rate
A tax is levied on the annual value of real estate (or land), the rate of which is between 10% and 40%.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Refer to the list of International tax convention, Ministry of Maritime Transport website.
Withholding Taxes
Interest: 20%, Royalties: 20%

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Sources of Fiscal Information

Tax Authorities
Egyptian Tax authority
Ministry of Finance
Other Domestic Resources
The Egyptian Tax System
The Tax Association of Egypt
Country Guides
Info-prod Research: Egyptian Taxation

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Last Updates: July 2014

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