Cairo GMT +2
EY Street address:
Mail address:
Rama Tower
Ring Road, Zone #10A Kattameya, Cairo Kattameya, Cairo Egypt Egypt
P.O. Box 20
Executive and immigration contact
Ahmed El Sayed
A. Income tax
+20 (2) 2726-0260
Fax: +20 (2) 2726-0100
Email: ahmed.el-sayed@eg.ey.com
Who is liable. Income tax is imposed on the following sources of income:
• Worldwide income from employment or dependent services paid by the Egyptian government or any Egyptian public orga nization, regardless of the employee’s residence, the place where services are rendered or the place of payment
• Egyptian-source income paid by Egyptian or foreign companies or by private sector enterprises to any employee resident in Egypt or resident abroad, in return for services rendered in Egypt (pension payments are excluded)
• Non-Egyptian-source income paid to a resident employee or individual if Egypt is the location of the headquarters of the individual’s commercial, industrial or professional activity
Under the law, persons are deemed to be residents of the country where they have a permanent domicile. A person who resides in Egypt for a period exceeding 183 days during a calendar year is deemed to be resident in Egypt for tax purposes.
Nonresident individuals and expatriate experts (as defined) are generally taxed on Egyptian-source income only.
Income subject to tax. Income tax is levied on the following types of income:
• Employment income
• Business profits, noncommercial profits (self-employment income) and income from immovable properties (including the assessed rental values of agricultural lands and buildings)
• Dividends
• Capital gains on disposals of shares and securities
Employment income. Income tax is levied on salaries, wages, compensation awards, overtime pay and all cash and in-kind fringe benefits.
The following rules apply to the taxation of employment income:
• Casual workers are also subject to tax.
• Tax is imposed on income generated from Egyptian sources, re gardless of whether the work is performed in or outside Egypt. Tax is also imposed on income generated from foreign sources for work performed in Egypt.
• Tax is imposed on all salaries, remunerations and bonuses paid to managing directors, board members and managers of corporations for the performance of administrative duties.
In addition to other tax exemptions prescribed in special laws, the following types of income are exempt from tax:
• Certain collective in-kind allowances for employees, which are meals distributed to the workers, collective transportation of workers or equivalent transportation costs, health care, tools and uniforms necessary for performing work and housing pro vided by the employer to workers for performing their work.
• Workers’ share in the profits distributed according to the law.
• All compensation received by members of diplomatic and con sular corps, international organizations, and other foreign diplomatic representatives in the context of their official work. This exemption is conditioned on reciprocity of treatment and is granted within the limits of such treatment.
Self-employment and business income. Income tax is levied on noncommercial profits derived by professionals or independent persons practicing other noncommercial activities in Egypt if work is the primary element of the activity (for example, lawyers, accountants, artists and writers). This tax applies to any income derived from professions or activities not otherwise subject to tax in Egypt. Graduates and members of a professional association about to practice for the first time enjoy certain exemptions.
Noncommercial profits generated outside of Egypt that are derived by professionals or independent persons practicing noncommercial activities in Egypt are subject to tax in Egypt if Egypt is the location of the headquarters of the professional or noncommercial activities.
Taxable noncommercial income consists of net noncommercial profits from various operations after deduction of all related costs. If no proper books are kept, gross revenue is estimated using indicators and guidelines issued by the tax authorities.
Income tax is levied on the net profits of business income from all activities carried on by commercial and industrial entities operat ing as sole traders, partnerships and limited partnerships in Egypt, and on profits derived from certain other categories of income as specified by law.
Profits generated outside of Egypt by commercial and industrial entities operating in Egypt are subject to Egyptian income tax if Egypt is the location of the headquarters of the entity’s commer cial and industrial activities.
Nonresidents with commercial and industrial activities are taxed only on income earned from an establishment in Egypt or from operations carried on in Egypt.
Taxable commercial and industrial income consists of net commercial and industrial profits derived within a calendar year from all business transactions, including sales of assets (after deduc tion of all business charges, expenses and personal allowances).
Investment income. Dividends from shares and interest received by residents from bonds and debentures of companies that are officially listed on the Egyptian stock exchange are exempt from
income tax. See Capital gains and losses for the taxation of capital gains on these investments.
Dividends received from foreign sources by resident individuals are subject to tax.
Certain interest is exempt from tax, including interest derived from securities listed on the Egyptian stock exchange.
Commission payments unrelated to a resident taxpayer’s profes sion and royalties received by residents are taxed on gross income as commercial and industrial profits (business income; see Selfemployment and business income).
Payments by domestic corporations to foreign or nonresident persons are subject to withholding taxes in accordance with the following rules:
• Dividends realized in Egypt by resident and nonresident indi viduals engaged in a commercial or industrial activity are sub ject to tax at a rate of 10% without deducting any expenses. This rate is reduced to 5% if the individual holds more than 25% of the distributing company’s capital or voting rights and if the shares were held for at least two years (effective from 21 August 2015).
• Dividends realized in Egypt by resident individuals not engaged in a commercial or industrial activity are subject to tax at a rate of 10% of the annual taxable income of more than EGP10,000. This rate is reduced to 5% if the recipient meets the abovementioned conditions.
• Royalties are taxed on gross income at a rate of 20%. Several tax treaties concluded between Egypt and other countries have specific rates for taxes on royalties, varying from complete exemption to a tax of up to 20% of gross royalties.
• Interest is subject to a 20% withholding tax with some specific exemptions. Special rates are established by certain tax treaties.
Capital gains and losses. Capital gains derived from transfers of real estate are not subject to tax unless the real estate is used in a trade or business. However, a 2.5% tax is levied on the gross pro ceeds from the total disposal value of built real estate and land prepared for buildings.
Tax on capital gains realized by business entities from the sale of other capital assets, including machinery and vehicles, is calculated in the same manner and at the normal rates that apply to com mercial and industrial profits. Trading losses and capital losses on the sale of these assets are deductible from taxable capital gains.
Capital gains on sales of personal property, including automobiles, jewelry and shares, owned by an individual are not taxed in Egypt, unless used in a trade or business.
Tax on capital gains realized from the disposal of securities listed on the Egyptian Stock Exchange applies at a rate of 10% (not yet enforced).
Capital gains realized by resident or nonresident individuals from the disposal of shares not listed on the Egyptian Stock Exchange or shares abroad is subject to income tax at a rate of 22.5%.
Deductions. The following deductions may be claimed:
• An annual personal deduction of EGP9,000 for each individual (as of 1 May 2020)
• Social insurance and other contributions that may be deducted in accordance with the measures in the social insurance law and under alternative systems
• Employees’ contributions to private insurance funds established according to the provisions of the Private Insurance Funds Law, as promulgated by Law No. 54 for 1975
• Premiums paid for life and health insurance for the benefit of the individual or the individual’s spouse or minor children, and insurance premiums paid with respect to pensions
The total deduction for the last two items mentioned above may not exceed 15% of the net annual income or EGP10,000, which ever is lower.
For purposes of computing taxable commercial and industrial income, all costs generally are deductible. In particular, the following specific deductions are allowed:
• Costs for rental of premises
• Tax depreciation and accelerated depreciation for new machines (applying accelerated depreciation to new machines is optional, effective from 13 March 2015)
• All taxes except taxes on business income
• Social insurance contributions
• Contributions to pension and savings funds
• The deductions described in the first paragraph of this section
Rates. Progressive tax rates apply to employment income, income derived by individuals from commercial, industrial and noncommercial activities, and income from immovable properties.
The following are the tax brackets.
Annual net income* Tax rates
Up to EGP600,000
0% on income from EGP0 to EGP15,000, 2.5% on income from EGP15,001 to EGP30,000, 10% on income from EGP30,001 to EGP45,000, 15% on income from EGP45,001 to EGP60,000, 20% on income from EGP60,001 to EGP200,000, 22.5% on income from EGP200,001 to EGP400,000, and 25% on income above EGP400,000
More than EGP600,000
2.5% on income from EGP1 to but not more than EGP30,000, 10% on income from than EGP700,000 EGP30,001 to EGP45,000, 15% on income from EGP45,001 to EGP60,000, 20% on income from EGP60,001 to EGP200,000, 22.5% on income from EGP200,001 to EGP400,000, and 25% on income above EGP400,000
Annual net income* Tax rates
More than EGP700,000 10% on income from EGP1 to but not more than EGP45,000, 15% on income from EGP800,000 EGP45,001 to EGP60,000, 20% on income from EGP60,001 to EGP200,000, 22.5% on income from EGP200,001 to EGP400,000, and 25% on income above EGP400,000
More than EGP800,000 15% on income from EGP1 to but not more EGP60,000, 20% on income from than EGP900,000 EGP60,001 to EGP200,000, 22.5% on income from EGP200,001 to EGP400,000, and 25% on income above EGP400,000
More than EGP900,000 20% on income up to EGP200,000, but not more 22.5% on income from EGP200,001 than EGP1,000,000 to EGP400,000, and 25% on income above EGP400,000
More than EGP1,000,000 22.5% on income up to EGP400,000, and 25% on income above EGP400,000
* On computation of the tax, the sum of annual net income should be rounded to the nearest lower EGP10.
Amounts paid and benefits provided to nonresidents performing activities in Egypt are subject to the same tax rates as Egyptian residents.
Relief for losses. A taxpayer may offset losses against profits of a business and may carry losses forward for a period up to five years. Losses may not be carried back. Losses incurred in longterm projects may be carried back within the same project.
Losses incurred outside Egypt cannot be offset against taxable profit in Egypt.
If capital losses exceed capital gains realized from disposals of securities and shares in a tax year, the excess can be carried for ward for three years.
B. Inheritance tax
Egypt does not impose inheritance tax.
C. Social security
Social insurance contributions are levied only on Egyptian nationals with full-time employment. An employee pays 11% on the monthly base salary up to EGP7,000.
To provide relief from double social security taxes and to assure benefit coverage, Egypt has concluded totalization agreements with Cyprus, Greece, the Netherlands and Sudan, which usually apply for an unlimited period of time.
D. Tax filing and payment procedures
The tax year in Egypt is the calendar year. Married persons are taxed separately, not jointly, on all types of income.
Individuals engaged in business or professional activities must notify the tax authorities within 30 days of starting such activities and within 30 days after ceasing activities or relocating. They are also required to obtain a tax identification card.
Individuals deriving noncommercial profits, regardless of the amount, must submit annual tax returns and pay tax before 1 April for income derived in the preceding calendar year. The returns must give details of profits or losses, and must be sup ported by the relevant books of account together with all neces sary documents. An individual may request to extend the date of submitting his tax return if the request is submitted 15 or more days before the due date for the submission of the return and if, on the date of submitting the request, the individual pays the estimated tax stated in the tax return. If the extension request is submitted in accordance with the above requirements, the date for submitting the tax return is extended for a period of 60 days.
Employees are not required to submit annual returns for their employment income.
Companies must withhold monthly tax from the salaries of em ployees and remit such amounts to the tax authorities. They must submit a quarterly declaration to the relevant tax office in January, April, July and October of each year. Companies must submit an annual declaration to the relevant tax office in January of each year. Free-zone projects must withhold the taxes due from their employees and remit such amounts to the tax authorities.
Nonresidents with commercial and industrial activities operating as partnerships must file annual tax returns within four months after the end of the financial year or within 30 days after the ces sation of their activities.
Tax becomes due and is payable within 30 days after receipt of a notice of final tax assessment from the tax authorities. If an individual fails to pay the tax due before the due date, a delay penalty applies until the date of payment. The delay penalty is imposed at a rate of 2% plus the credit and discount rate set each January by the Central Bank of Egypt.
E. Double tax relief and tax treaties
Egypt has entered into double tax treaties with the following jurisdictions.
Albania Indonesia Serbia and Algeria Iraq Montenegro
Austria Ireland Singapore Bahrain Italy Slovak Republic
Belarus Japan South Africa
Belgium Jordan Spain Bulgaria Korea (South) Sudan
Canada Kuwait Sweden China Mainland Lebanon Switzerland
Cyprus Libya Syria
Czech Republic Malaysia Tunisia
Denmark Malta Turkey
Ethiopia Morocco Ukraine
Finland Netherlands United Arab
France Norway Emirates
Georgia Pakistan United Kingdom
Germany Palestinian Authority United States
Greece Poland Yemen
Hungary Romania Yugoslavia
India Russian Federation
Tax treaties with Congo (Democratic Republic of) and Saudi Arabia have been negotiated, but they have not yet been ratified. Treaty discussions have been initiated but treaties have not yet been negotiated with Armenia, Bangladesh, Kazakhstan, Mongolia, North Macedonia, Oman, Senegal, Seychelles, the Slovak Republic, Sri Lanka, Tanzania, Thailand, Uganda and Vietnam.
F. Tourist and temporary visas
All foreign nationals are required to obtain valid entry visas to enter Egypt, with certain exceptions for nationals of countries that do not require visas for Egyptians.
Tourist visas. In general, most business visitors and tourists seek ing to enter Egypt must obtain an entry visa. For Canadian, European and US nationals, this visa is stamped in the traveler’s passport at the port of entry or the airport. Nationals of certain countries are required to obtain the entry visa from the Egyptian consulate in their home country before arriving to Egypt. Visitors having tourist visas are generally prohibited from remaining in Egypt beyond the authorized period and are not permitted to engage in any form of employment or studying. The authorized period of the visa is one month. However, visitors may apply for an extension of up to three months, depending on the applicant’s nationality.
Temporary visas. Temporary visas are issued to foreign nationals who enter Egypt for reasons other than tourism and whose stay will exceed three months but not more than one year. Certain individuals, including foreign investors, may receive temporary visas for a period of three years. Visitors having temporary visas are generally prohibited from remaining in Egypt beyond the authorized period and are not permitted to engage in any form of employment or studying.
Each individual applying for or requesting a renewal of a business visa must submit the following forms and documentation at the Egyptian consulate:
• A passport or an equivalent travel document valid for travel to Egypt with a validity date of at least six months after the appli cant’s intended period of stay in Egypt
• An application form
• Six photographs
• Additional forms
G. Work permits, work visas and self-employment
If a foreign visitor wants to work in Egypt on a full-time basis, under Egyptian labor law, he or she needs to obtain a work
permit. Work permits are granted to expatriates by the Ministry of Manpower and Immigration on an individual basis. A work permit is granted for six months subject to renewal for another six months, provided that an approval is received from the Ministry of Interior confirming that the employee has a good and clear security situation. The work permit may be renewed annually up to a maximum of four years unless exceptional approval is received from the Ministry of Manpower and Immigration. The renewal of the work permit usually takes from 10 to 15 working days, depending on the employee’s nationality.
The applicant must first submit a work permit enrollment appli cation, together with certain supporting documentation, to the Ministry of Manpower and Immigration.
The issuance of a work permit involves the following two-phase process:
• Phase 1 is the enrollment process. This should be initiated and completed while the applicant is outside Egypt by submitting an enrollment application to the Ministry of Manpower and Immigration and all of the required documents from both the applicant and the legal entity for which the applicant will work. The application requests that the ministry approve the enroll ment of the applicant then notify the Main Passport Directorate to issue an entry visa number for him or her to use to enter Egypt.
• Phase 2 is the work permit issuance process. After entering Egypt, the assignee should perform an HIV test (blood test). After the test results and all of the required documents for issu ing the work permit have been submitted and the approval to issue the work permit for the assignee is received, an applica tion shall be submitted to the Passport and Immigration Department to issue the residence visa card (work is permitted for the same duration same as the work permit), noting that the family members can apply at the same time. However, resi dence visa cards for family members are for the purpose of residency only, and family members are not permitted to work in Egypt.
In addition, under the immigration law, an individual should apply for the work permit while the employee is outside the coun try. However, based on the new instructions issued by the immi gration authority, extra governmental fees can be paid to obtain an exemption from the enrollment process and to allow the employee to apply for the work permit while he or she is in the country.
The estimated timeline from the date of the receiving all of the required documents is four to six weeks for Phase 1 and four to five weeks for Phase 2. This estimated timeline may vary depending on certain factors such as the applicant’s nationality, particularly Far East nationalities, because their security investi gation process takes a longer time.
The following criteria are considered for applicants who will work on full-time basis:
• The applicant should have a legal entity in Egypt through which the applicant applies for enrollment.
• The applicant’s position should add value to the Egyptian legal entity (that is, he or she should be an expert in his or her area of specification, because ordinary positions, such as adminis trative positions, are not acceptable for enrollment).
• The applicant should have at least three years of relevant expe rience in the same position that he or she will be holding in the Egyptian legal entity.
• The Egyptian legal entity should comply with the labor ratio of 9:1 (that is, nine Egyptian full-time employed and socially insured employees for each expatriate employee).
H. Residence visas
Ordinary visas. Ordinary visas are issued for a period of three to five years to foreign nationals who are married to Egyptians or who were born in Egypt or the Palestinian Authority.
Special visas. Special visas are issued to foreign nationals for political reasons or to individuals who have provided beneficial services to Egypt. The duration of this visa is 10 years, and it is renewable for similar durations.
I. Family and personal considerations
Family members. The rules for family members are summarized below.
Visitors. Visitors should apply for a tourist visa at an Egyptian consulate abroad.
Employment for spouses. A spouse has the same duration of resi dency as the applicant. However, he or she is required to apply for a work permit separately from the applicant if he or she intends to work as a full-time employee in Egypt. A marriage certificate or other document is usually required to prove the marriage status.
Study permits for children. Children receive the same duration of residence as the applicant and his or her spouse. In general, chil dren are allowed to apply to schools and colleges.
Driver’s permits. Foreign nationals may drive legally using their home country driver’s licenses only if they are visiting Egypt temporarily and hold international driver’s licenses. After permis sion to work is granted, they must obtain local driver’s licenses.
To obtain an Egyptian driver’s license, an individual must submit a doctor’s certificate, take a verbal examination and perform a fairly simple driving test.
Egypt signed the United Nations Convention (1949), and it is a legal requirement for visitors to have a valid International Driving Permit in order to rent a car and legally drive in Egypt.