Taxation in Egypt | Doing Business in Egypt

Doing Business in Egypt | Fathalla

FATHALLA CPA

Taxation in Egypt

Firstly we would define the meaning of taxation A means by which governments finance their expenditure by imposing charges on citizens and corporate entities.

Governments use taxation to encourage or discourage certain economic decisions. For example, reduction in taxable personal (or household) income by the amount paid as interest on home mortgage loans results in greater construction activity, and generates more jobs. Though the Egyptian government is making a concentrated effort to streamline the country’s tax system Tax evasion Is quite common in Egypt because of the complicated and largely ineffective collection system.

Employers have developed numerous strategies for sparing their foreign workers the grief of wading through Egyptian tax law – many are paid in cashable checks or employed as “consultants,” the idea being to leave the responsibility for deciding about tax payments to the employee himself.If you are paid by cashable check, or as a consultant, you should know that chances of the Egyptian government ever coming to collect taxes are somewhere near zero. If, however, you make a significant amount of money (e.g. LE1, 000,000 a year or more) you may want to pay closer attention to your tax liabilities – as a high-income earner, you are more likely to end up on the government’s radar.

Corporate Taxes Tax Base for Resident and Foreign Companies Residents are taxed on worldwide income while non-residents are taxed only on Egypt-sourced income.

Tax Rate Corporate Income Tax Tax on the profits of Suez Canal Company, Egyptian General Petroleum Company and the Central Bank of Egypt Tax on the profits of oil prospecting and production companies

22.5% 40% 40.55%

Country Comparison For Corporate Taxation

Number of Payments of Taxes per Year Time Taken For Administrative Formalities (Hours) Total Share of Taxes (% of Profit)

Egypt 8.0 664.0 32.5

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.

If you have any questions about doing business in Egypt, you can visit www.fathalla-cpa.com or you can send an e-mail to info@fathalla-cpa.com.