Foreigners residing or conducting business in Egypt are subject to the country’s tax regulations, which are governed by the Egyptian Income Tax Law No. 91 of 2005, alongside amendments introduced to improve compliance and efficiency.

Types of Taxes Applicable to Foreigners

Income Tax:

Foreign employees working in Egypt are taxed on their income earned within the country.

Tax rates follow a progressive scale:

Up to EGP 15,000: 0%

EGP 15,001 – 30,000: 2.5%

EGP 30,001 – 45,000: 10%

EGP 45,001 – 200,000: 15%

Above EGP 200,000: 22.5%

Foreigners employed by international organizations may be exempt under specific agreements.

Corporate Tax:

Businesses owned by foreigners in Egypt are subject to a 22.5% corporate tax on net profits.

Special investment zones may offer reduced tax rates or exemptions.

Value Added Tax (VAT):

Standard VAT rate: 14%

Some essential goods and services are either exempt or taxed at a lower rate.

Foreign companies providing digital services may be required to register for VAT if operating in Egypt.

Real Estate Tax:

Property owners, including foreigners, must pay annual real estate tax based on property value.

Exemptions exist for properties below a certain valuation threshold.

Customs Duties:

Foreigners importing goods into Egypt may be subject to customs duties.

Free trade agreements and investment incentives can provide tax reductions or exemptions for specific imports.

Tax Residency for Foreigners

Foreigners are considered tax residents if they stay in Egypt for more than 183 days in a year.

Tax residents are taxed on their worldwide income, while non-residents are taxed only on Egyptian-sourced income.

Tax Compliance and Filing Requirements

Individuals and businesses must file annual tax returns with the Egyptian Tax Authority (ETA).

Employers deduct income tax from salaries and remit it to the tax authority.

Late payments or non-compliance can result in penalties or legal action.

Tax Exemptions and Incentives for Foreigners

Special exemptions apply for diplomats and certain international employees.

Investors in free zones and industrial projects may benefit from tax incentives.

Double taxation treaties exist between Egypt and multiple countries to avoid being taxed twice on the same income.

Conclusion

Understanding Egyptian tax laws is essential for foreigners to ensure compliance and avoid legal complications. Whether working, investing, or residing in Egypt, staying informed about tax obligations helps manage financial and legal responsibilities efficiently.