Individual Income Tax
Individuals are considered resident for taxation purposes if they are present in Egypt for more than 183 days in a fiscal year; are deemed to have a permanent abode in Egypt; or are Egyptian nationals performing their work in a foreign country but being paid from an Egyptian source.
Non-residents are subject to tax on income earned or realised in Egypt only, at the same rates as residents. Residents are taxed on their worldwide income if their centre of commercial, industrial, or professional activities is in Egypt.
Reimbursement for expenses of spouses and dependents is considered taxable income. In addition, school tuition fees, long-term living expenses, and overseas and hardship allowances are taxable.
The current tax law exempts severance pay, pension payments after the fulfilment of specific conditions, and employees’ profit share.
The following benefits are tax exempted, provided that the benefits are in kind and given for a group of employees. The benefits are:
- Meals distributed to the workers, provided that they are provided at the work place.
- Group transportation of workers or equivalent transportation costs.
- Health care.
- Tools and uniforms necessary for performing the work.
- Residence provided by the employer to the workers for performing their work, provided that the residence is owned or leased by the owner. However, it is worth noting that housing is a bit of a grey area in the Egyptian Income Tax Law as there is no clear-cut definition for the conditions to qualify for the exemption.
Income from pensions and end of service bonuses are exempt from income tax.
|Earned income (EGP-Egyptian pounds)||Tax rate on bracket (%)|
|From 0 to 15,000||0|
|15,000 to 30,000||2.5|
|30,000 to 45,000||10.0|
|45,000 to 60,000||15.0|
|60,000 to 200,000||20.0|
|200,000 to 400,000||22.5|
|More than 400,000||25.0|
The above-mentioned brackets also apply to non-residents on the income they receive from an Egyptian treasury or against work performed in Egypt. Please note that both residents and non-residents are entitled to an annual salary tax exemption of EGP 9,000.
The tax due is to be calculated at the rate noted for each bracket; however, taxpayers with higher net taxable incomes are not allowed to avail the lower tax brackets, as per the following:
- The annual net taxable income ranging between EGP 600,000 and EGP 700,000 is not eligible for the 0% tax bracket.
- The annual net taxable income ranging between EGP 700,000 and EGP 800,000 is not eligible for the 0% and 2.5% tax brackets.
- The annual net taxable income ranging between EGP 800,000 and EGP 900,000 is not eligible for the 0%, 2.5%, and 10% tax brackets.
- The annual net taxable income ranging between EGP 900,000 and EGP 1 million is not eligible for the 0%, 2.5%, 10%, and 15% tax brackets.
- The net taxable income of above EGP 1 million is not eligible for the 0%, 2.5%, 10%, 15%, and 20% tax brackets.
These rates and credits are applied:
- for payroll taxpayers starting the month following the publication of the law in the official gazette, and
- for commercial, professional, non-commercial, or real estate taxpayers starting from the tax year ends after the publication of the law in the official gazette.
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