Accounting Outsourcing and
Tax compliance in Egypt

Egypt – Accounting Outsourcing and Tax Compliance

Global Expansion Plus provides accounting outsourcing and tax compliance in Egypt. We provide services with the support of our local accountants and tax specialists. We will perform bookkeeping, accounting, and filing a tax return on your behalf bearing all associated compliance risks. Every state will put in place a tax system to raise revenue. Egypt is no different. Whether a resident or a non-resident, individual, or corporate, there is a need to understand taxation in Egypt. Otherwise, you are bound to get on the wrong side of the law.

Egypt in facts

  • Location: Middle East and North Africa
  • Territory: 1,010,408 square kilometers
  • Capital: Cairo
  • Official language: Egyptian Arabic
  • Currency: Egyptian pound (E£) (EGP)
  • Population: 100,07 million

Corporate income tax (CIT) in Egypt

Companies in Egypt pay corporate income tax of 22,5% from their net profit. This rate applies to all companies except for oil extraction companies. They are taxed at 40,55%. Also, three entities have a special corporate income tax of 40%:
  • The Suez Canal;
  • The Egyptian Petroleum Authority;
  • The Central Bank of Egypt;

Value-added Tax (VAT) in Egypt

Egyptian standard VAT rate is 14%. This VAT rate is applied to all goods and services. A special VAT rate of 5% is applied to professional equipment used in the production of products and services. Busses and cars used for taxi and transportation are exempt from this rule.
Some of the goods that affect the essential life of poor people are exempt from VAT; these products and services are listed in the Tax Code of Egypt.
Egyptian VAT has a reverse-charge system, that for transitions with non-Egyptian companies are VAT taxable.

VAT Electronic returns

Egyptian Tax Authority has implemented an electronic filing system for VAT returns. VAT registered companies have to submit monthly schedule returns through the web-site, the Tax Authority does not accept manually filed returns.

Personal Income tax (PIT) in Egypt

Personal Income Tax is imposed on the residents of Egypt for their total income. Residents of Egypt also pay PIT from their foreign earnings. PIT is also paid by non-residents that have an income source in Egypt.
Egyptian Tax Code stipulates the following rates for tax brackets for the personal income tax. These rates are allied to employment income as well:
  • 0% for income up to EGP 8,000;
  • 10% for income between EGP 8,000 and EGP 30,000. A tax credit of 85% is available for this income spread;
  • 15% for income between EGP 30,000 and EGP 45,000. A tax credit of 45% is available for this income spread;
  • 20% for income between EGP 45,000 and EGP 200,000. A tax credit of 7,5% is available for this income spread;
  • 22,5% for income over EGP 200,000. No tax credit is available.
Individuals generating income in Egypt are eligible for EGP 7,000 tax exemption from their annual income.

Withholding Tax (WHT) in Egypt

  • Dividends, interest incomes, low tax jurisdiction payments, and other incomes – 10%;
  • Royalties and rental revenues – 14%;
  • Reinsurance and insurance payments – 4%;
  • Revenues due to transport or telecommunication services – 6%;
Any payment, whether direct or indirect, made to persons of countries considered to be having favorable tax regimes, a 10% WHT applies. It is the same case with transfers made to digital wallets by Azerbaijani residents. Banks and postal service providers must deduct the 10% WHT.

Payroll-Related Taxation in Egypt

Social security contribution is separate for the fixed salary and variable part of the wage:
  • For the fixed salary the social contribution is equal to 26% and capped at EGP 1,370;
  • For the variable wage the social contribution is equal to 24% and capped at EGP 2,800;

Comprehensive health insurance system contributions

The Egyptian health system is going through a significant change; a big part of it is the modernization of health insurance according to the new Comprehensive Health Insurance Law, both employees, and employers.
Employees are paying 1% of the gross salary. If an individual is employed for more than one company, he/she must pay for each salary or wage separately.
Employers are paying 4% of monthly gross salaries to the Social Insurance Fund. The minimum contribution is equal to EGP 50.

Import/ Export related taxation in Egypt

Custom duty

Egyptian Custom law imposes the custom duty from 5% to 40% for all imported goods. For some particular products, different custom duty is applied.
Imported equipment that is going to be used as a fixed asset for a project is subject to 5% customs duty.
The custom official assesses the spare part that is imported for further assembly in Egypt. The estimated value of the final product is taken as a base for the assessment. The amount of the final product is adjusted to define the value of spare parts. Spare part can be valued as 10% of the final product to a maximum of 90%.
Equipment and Machinery that are entering the territory of Egypt are taxed at 20% of the fair value.

Excise taxes

Some products entering Egypt are subject to excise tax under the VAT law of Egypt. A list of products is taxed on top of the standard 14% of VAT products.
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