Income tax in Egypt

March 27, 2018

INDIVIDUAL TAXATION

Egypt residential properties

Residents are taxed on their Egyptian-sourced income. There is no joint taxation for married couples, but dependent children are taxed jointly with the household.

INCOME TAX

There are four recognized categories of income: (1) employment income, (2) business income (which includes income from commercial and industrial activities), (3) non-commercial income, and (4) income from real estate assets.

Taxable income is computed by deducting income-generating expenses and allowable deductions from the gross income. Income is aggregated from all sources and taxed at progressive rates.

INCOME TAX 2016

TAXABLE INCOME, EGP (US$)
TAX RATE
Up to 6,500 (US$1,121)
0%
6,500 – 30,000 (US$5,172)
10%
30,000 – 45,000 (US$7,759)
15%
45,000 – 250,000 (US$43,103)
20%
Over 250,000 (US$43,103)
22.50%
Source: Global Property Guide

INCOME TAX 2015

TAXABLE INCOME, EGP (US$)
TAX RATE
Up to 5,000 (US$862)
0%
5,000 – 30,000 (US$5,172)
10%
30,000 – 45,000 (US$7,759)
15%
45,000 – 250,000 (US$43,103)
20%
Over 250,000 (US$43,103)
25%
Source: Global Property Guide

Additional Tax
Income exceeding EGP1 million (US$172,413) would be subject to additional tax at 5% for 2015.

Residents can deduct the following allowances from their employment income:

  • Personal allowance of EGP4,000 (US$517)
  • Social insurance contributions
  • Life and health insurance premiums, plus contributions to private insurance funds; the aggregate of both contributions may not exceed 15% of the base salary or EGP3,000 (US$690)

RENTAL INCOME
Rental income derived by residents is taxed at the standard progressive rates. Taxable income is gross rent less income-generating expenses. The maximum deduction allowed to cover operating expenses is 50% of the gross rent.

CAPITAL GAINS
There are no capital gains taxes in Egypt.

For properties located in the Egyptian cities, a flat rate of 2.5% of the gross proceeds is levied on sales of real estate or building sites. No deductions are allowed.

PROPERTY TAX

In addition to the real estate and supplementary (khafar) taxes, buildings and agricultural land may also be subject to taxes and duties imposed by the local authorities.

Real Estate Tax

Real estate tax is imposed on Egyptian real properties, payable by the owner. Whether the property is actually leased out or not, the tax is levied on the rental value of the property, which is assessed every 5 years for properties by the tax authority. Real estate tax is levied at a flat rate of 10%.

Real estate tax is levied after deducting the following assumed maintenance expenses:

  • 30% of the rental value for residential properties
  • 32% of the rental value for non-residential properties

Residential properties with an annual rental value of less than EGP6,000 (US$1,034) is exempt from real estate tax.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies are generally taxed at a flat rate of 22.50%. Taxable income is computed by deducting income-generating expenses from the gross income.

Additional Tax
Income exceeding EGP1 million (US$172,413) would be subject to additional tax at 5% for 2015.

 

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