• Tax is imposed on income generated from Egyptian sources, regardless 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 provided 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 consular 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 operating 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 commercial 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
Annual net income* Tax rates
More than 25% on income up to EGP1,200,000, EGP1,200,000 and 27.5% on income above EGP1,200,000
* 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 forward for three years.
B. Other taxes
Egypt does not impose wealth tax or inheritance/estate tax or gift tax.
C. Social security
Social insurance contributions are levied on Egyptian nationals and, as from September 2021, on foreign nationals, both with a full-time employment contract in Egypt.
Monthly contributions are calculated on base salary of up to EGP12,600 for 2024. The following are the applicable contribution rates:
• Employer contribution 11%
• Employee contribution 18.75%
The above contributions cover various social insurance benefits, including pensions, disability, death insurance, occupational accident insurance, sickness and injury insurance, and unemployment insurance.
To provide relief from double social security taxes and to assure benefit coverage, Egypt has concluded totalization agreements with Cyprus, Greece, Morocco, the Netherlands, Sudan and Tunisia, which usually apply for an unlimited time period.
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
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 application, 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 enrollment 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 issuing the work permit have been submitted and the approval to issue the work permit for the assignee is received, an application shall be submitted to the Passport and Immigration Department to issue the residence visa card (stating that work is permitted and that it is issued for the same duration as the work permit), noting that the family members can apply at the same time. However, residence visa cards for family members are for the purpose of residency only, and family members are not permitted to work in Egypt, unless they secure their own work permits separately.
In addition, under the immigration law, an individual should apply for the work permit while the employee is outside the country. However, by submitting a request and making payment of extra governmental fees, it is possible to obtain an exemption from the enrollment process issued by the immigration authority that would allow the foreign employee to apply for the work permit while he or she is in the country.
The estimated timeline from the date of receiving all 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.
The following criteria are considered for applicants who will work on a full-time basis and apply for the work and residence permit category:
• There must be 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 a specialist in his or her area of specification, because ordinary positions, such as administrative positions, are not acceptable for enrollment).
• The applicant should have at least three years of relevant experience in the same position that he or she will be holding in the Egyptian legal entity. An experience letter should be issued from the assignee’s prior employer to confirm the years of