Find, in this article, all that you need to know on the Egyptian tax system and whether you need to pay tax as an expatriate.
If you are moving to Egypt, whether to live, work or set up a business, you are probably wondering whether you have to pay tax. There are different types of taxes in Egypt, some of which apply to expatriates. Take the time to inquire about these and on relating conditions with Egyptian tax authorities so as to avoid any surprises.
Tax year and other conditions
The tax year in Egypt starts in January and ends in December. You are required to submit your tax return, either in person or by post, to the local tax administration office before the 1st of April of the following tax year. Payment has to be done on the same day, pending the validation of your tax return.
Note, on the other hand, that tax is not deducted at source in the case of dividends paid to non-residents. Make sure to inquire whether your home country has signed any agreement with Egypt in this regard.
Main types of tax
Four main types of taxes apply in Egypt, namely corporate income tax, personal income tax, property tax and tax in interests, dividends and plus values. General Sales Tax, which is similar to Value Added Tax (VAT) to some extent, also applies. Below is some information on personal and corporate tax and on the General Sales Tax.
Personal income tax
Personal income tax applies to all residents and individual companies operating in Egypt at a rate reaching up to 20% of the net annual revenue.
Tax thus applies to earned income, business and other non-commercial profits and wages under this regime. It is calculated in the same way as corporate tax in the business profits category.
Personal income tax is deducted at source every three months at the same rates and brackets. It is directly transferred to tax authorities by the employer as follows:
- 0 to 5,000 Egyptian pounds - 0 %
- 5,001 to 20,000 Egyptian pounds - 10 %
- 20,001 to 40,000 Egyptian pounds - 15 %
- Beyond 40,000 Egyptian pounds - 20 %
Corporate income tax
Corporate income tax applies to commercial companies operating in Egypt, namely liability companies and partnerships, at a fixed rate of 20%, expect in the case of profits generated by oil and gas companies (tax applies to them at at a rate of 40,55 %).
General Sales Tax
As mentioned above, the General Sales Tax (GST) is quite similar to Value Added Tax (VAT). However, it differs according to the type of product, good or service provided. It thus applies at a fixed rate varying between 5 and 25%, but it some cases it can even reach up to 50, 75, 100 and even 200% according to the value of the product or service (alcoholic beverages, vehicles, etc.)
To register at the tax department, you are required to produce:
- a duly filled and signed application form
- your work permit
- your resident permit
- your identity card or passport.
The application has to be submitted to the nearest tax office to your place of residence. Fees of some 50 Egyptian pounds apply. Your tax identification number will then be issued within three to days to two weeks.
Understanding the tax system
For more information on the Egyptian tax system, please refer to the Ministry of Finance website which provides step by step details regarding tax filing and exemption conditions. You will also find a list of tax offices across the country. You can thus choose the closest office to your place of residence from the list.
Ministry of Finance www.mof.gov.eg