Egypt Tax Regime

Egypt operates a residence-based corporate income tax system at a standard flat rate of 22.5%, layered with dividend and other withholding taxes, alongside a progressive personal income tax administered by the Egyptian Tax Authority (ETA). Resident companies are taxed on worldwide income, while non-resident corporations and partnerships are taxed on income derived through a permanent establishment in Egypt. Special elevated rates apply to hydrocarbon exploration and to specified public-sector financial institutions. Egypt's tax system has undergone substantial modernisation over the past decade, including e-invoicing and e-receipt mandates, a unified tax procedures law, and incentives targeting investment zones and priority sectors, while treaty policy and transfer pricing practice increasingly track OECD standards.

1.1 Sources

Primary legislation includes the Income Tax Law No. 91 of 2005 (as amended), the Unified Tax Procedures Law No. 206 of 2020, the Value Added Tax Law No. 67 of 2016, the Investment Law No. 72 of 2017, and the Stamp Tax Law No. 111 of 1980.

1.2 Recent developments

Egypt has continued rolling out mandatory e-invoicing and e-receipt systems across taxpayer segments, with the Egyptian Tax Authority progressively expanding the population of businesses required to issue electronic tax documents as a precondition for input deduction and expense recognition by counterparties. The Unified Tax Procedures Law has streamlined filing, assessment and dispute rules across income tax, VAT and stamp tax. Egypt continues to expand and modernise its double tax treaty network and has been engaging with OECD BEPS minimum standards, including country-by-country reporting for large multinational groups, though Egypt has not yet enacted Pillar Two global minimum tax legislation. Investment zone and free zone incentives under the Investment Law remain a focus of government policy to attract foreign direct investment, particularly in energy, industrial and technology sectors.

Headline statutory corporate income tax rate for a resident company. Where sub-national (state, provincial, cantonal or municipal) corporate taxes apply, the combined rate reported by the OECD is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

Top marginal statutory personal income tax rate on employment income for a resident individual. Where sub-national (state, provincial, cantonal or municipal) income taxes are a standard part of the system, the combined top rate is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

2.1 Rates and residence

A company is resident in Egypt if it is established under Egyptian law, has its head office in Egypt, or is majority state-owned. Resident companies are subject to corporate income tax (CIT) on worldwide income at a standard flat rate of 22.5% on net taxable profits. Non-resident corporations and partnerships are taxed only on Egyptian-source income attributable to a permanent establishment in Egypt. Special elevated rates apply to specific activities: oil and gas exploration and production companies are taxed at 40.55%, and the profits of the Suez Canal Authority, the Egyptian Petroleum Authority and the Central Bank of Egypt are taxed at 40%. There are no governorate or other local taxes on corporate income — the 22.5% (or sector-specific) rate is the sole layer of entity-level income tax.

2.2 Dividends and participation

Dividends distributed by an Egyptian resident company to another Egyptian resident company are subject to a reduced effective treatment: 10% of the gross dividend is deemed non-deductible taxable income to the recipient unless the recipient holds at least 25% of the capital or voting rights of the distributing company for at least two years, in which case only 5% of the gross dividend is included, approximating a participation exemption for substantial, long-held shareholdings. Distributions to non-resident shareholders are subject to dividend withholding tax as described in section 4. Egypt does not operate a full participation exemption on capital gains from the disposal of qualifying subsidiary shares; such gains are generally included in ordinary taxable income, subject to specific listed-securities relief described in section 2.3.

2.3 Income determination

Taxable profit is computed from commercial accounting profit as adjusted for tax rules, following the accrual basis of accounting generally required under Egyptian law. Business expenses actually and necessarily incurred to generate taxable revenue are deductible, subject to specific limitations (for example, on certain provisions, entertainment and passenger vehicle costs). Capital gains realised on the disposal of unlisted shares and other capital assets are included in ordinary taxable income at the standard 22.5% rate; capital gains realised by resident companies on shares listed on the Egyptian Exchange are taxed at a reduced rate (historically suspended or reduced under successive capital-markets support measures, with the general listed-securities capital gains tax otherwise set at 10%, subject to periodic suspension). Depreciation follows prescribed statutory rates (straight-line or declining-balance depending on asset category), with an accelerated first-year allowance of up to 30% available for new machinery and equipment used in production.

2.4 Interest limitation

Egypt applies a thin-capitalisation-style interest deductibility limitation: interest expense is deductible only to the extent the company's debt-to-equity ratio does not exceed 4:1 (interest attributable to debt in excess of that ratio is disallowed), with related-party debt and bank borrowing both potentially subject to scrutiny. In addition, the deductibility of interest paid to related parties is subject to arm's-length transfer pricing review under section 2.8, and interest paid on loans used to finance tax-exempt income is not deductible. There is no separate fixed-ratio EBITDA-based limitation of the kind found in EU ATAD-aligned jurisdictions; the 4:1 debt-to-equity test is the principal statutory tool.

2.5 Losses

Tax losses may be carried forward for a maximum of five years from the year in which the loss arose, after which any unutilised balance is forfeited. There is no loss carryback. Losses of a company that changes its legal form (for example converting from a partnership to a joint stock company) generally continue to be available to the successor entity where continuity of activity and ownership is maintained, but losses can be restricted where a change of activity or a change of control is undertaken primarily to access accumulated losses, under general anti-avoidance principles.

2.6 Group taxation

Egypt does not have a formal fiscal consolidation or group-relief regime permitting the offset of profits and losses between separate group companies; each Egyptian company is assessed to corporate income tax as a standalone taxpayer. Egypt does, however, provide tax-neutral treatment for qualifying corporate restructurings — mergers, divisions, share-for-share exchanges and conversions of legal form — under specific provisions of the Income Tax Law that defer taxation of unrealised gains where continuity of activity, valuation and shareholding conditions are satisfied, subject to a look-back period (generally five years) during which a subsequent disposal can trigger the deferred tax.

2.7 Controlled foreign companies

Egypt does not operate a controlled foreign company (CFC) attribution regime under current legislation; undistributed profits of foreign subsidiaries of Egyptian resident companies are not attributed to the Egyptian parent for tax purposes, and taxation generally arises only on actual repatriation (dividends) or disposal (capital gains), subject to the foreign-source income and foreign tax credit rules applicable to resident companies taxed on worldwide income. This positions Egypt differently from many jurisdictions in this handbook series that have adopted ATAD-style or BEPS Action 3-aligned CFC rules.

2.8 Transfer pricing

Egypt applies the arm's-length principle to related-party and controlled transactions, following the OECD Transfer Pricing Guidelines as incorporated into Egyptian executive regulations. Egyptian taxpayers meeting prescribed thresholds must maintain master file and local file documentation and, for multinational groups with consolidated revenue of EGP 3 billion or more (aligned with the OECD's EUR 750 million CbCR threshold), file a country-by-country report. Advance pricing agreements are available on application to the Egyptian Tax Authority for related-party transactions, providing prospective certainty on transfer pricing methodology. The Egyptian Tax Authority has intensified transfer pricing audit activity in recent years, particularly targeting intra-group services, royalties and financing arrangements.

2.9 Incentives

The Investment Law No. 72 of 2017 provides a general investment incentive regime with two tiers: Investment Zone (Zone A, covering underdeveloped and Upper Egypt governorates) projects benefit from an investment cost deduction of 50% of qualifying capital expenditure against taxable profits, while other prescribed geographic areas and priority sectors (Zone B) benefit from a 30% deduction, both capped at a percentage of paid-up capital and subject to a claim window. Free zone projects (particularly in the Suez Canal Economic Zone) benefit from exemption from corporate income tax on profits derived from free zone activity, in exchange for an annual fee based on activity type, though free zone companies remain outside the general customs and VAT regime for zone-qualifying operations. Additional incentives target renewable energy, technology and export-oriented manufacturing.

2.10 Pillar Two

Egypt has not enacted Pillar Two global minimum tax legislation as of mid-2026. Egyptian-headquartered multinational groups and Egyptian constituent entities of foreign-headquartered groups meeting the OECD consolidated revenue threshold (EUR 750 million) may nonetheless be brought into the scope of a foreign parent jurisdiction's income inclusion rule or undertaxed profits rule, given that Egypt's standard 22.5% CIT rate combined with the various incentive regimes described in section 2.9 (investment cost deductions, free zone exemptions) can in some cases produce a GloBE effective tax rate below 15% for the Egyptian constituent entities of an in-scope group. Groups with Egyptian operations should monitor both Egyptian legislative developments and the interaction of Egyptian incentives with the GloBE rules as applied by parent jurisdictions.

2.11 Branch income and reorganisations

A branch (permanent establishment) of a foreign company in Egypt is taxed at the same 22.5% standard rate (or the applicable sector-specific rate) on profits attributable to the branch, computed under general arm's-length principles for attributing head-office and branch dealings. Those profits then bear a second layer. Under article 56 bis of the Income Tax Law (Law No. 91 of 2005), introduced in this form by Article One of Law No. 199 of 2020 and, in the text now in force, substituted by Law No. 30 of 2023 (Official Gazette No. 24 bis of 15 June 2023), the profits a non-resident juridical person realises through an Egyptian permanent establishment are deemed distributed by operation of law within sixty days of the close of the permanent establishment's financial year and bear the 10% tax on profit distributions, levied without deduction of any costs. The charge therefore cannot be deferred by retaining profits in the branch, and it is the branch-versus-subsidiary comparison rather than the fact of repatriation that determines the cost, subject to relief under an applicable treaty. Domestic reorganisations — mergers, divisions and changes of legal form — can be carried out on a tax-deferred basis under the Income Tax Law's restructuring relief described in section 2.6, subject to the five-year look-back clawback period and continuity requirements; cross-border reorganisations are analysed under the ordinary rules for disposals of Egyptian assets and permanent establishments, without a dedicated cross-border merger relief regime.

3.1 Residence and rates

An individual is tax resident in Egypt if present in Egypt for more than 183 days in a 12-month period, has a permanent home in Egypt, or is an Egyptian national performing duties abroad for the Egyptian state. Residents are taxed on worldwide income; non-residents are taxed on Egyptian-source income only. Personal income tax is progressive, with 2026 brackets running from an exempt threshold (currently EGP 40,000–45,000 per year, periodically increased for inflation) through intermediate rates of 10%, 15%, 20% and 22.5%, and a top marginal rate of 27.5% applying to taxable income above approximately EGP 1,200,000 per year, with bracket thresholds periodically adjusted by the Ministry of Finance to account for inflation.

3.2 Capital income and real estate

Dividends received by resident individuals from Egyptian companies are subject to withholding tax at source (see section 4), which is generally the final tax on that income for the individual. Capital gains realised by individuals on the disposal of unlisted shares are included in taxable income at the individual's marginal rate; gains on shares listed on the Egyptian Exchange realised by individuals are subject to the same capital gains regime referenced in section 2.3 for listed securities. Rental income from real estate is taxed at progressive rates after a standard deduction (generally 50% of gross rental income) for maintenance and related costs, in lieu of itemised expense deduction. Interest income on Egyptian government debt instruments and bank deposits is generally subject to a final withholding tax rather than inclusion in the progressive schedule.

3.3 Social security and payroll

Egypt operates a mandatory social insurance system under the Social Insurance and Pensions Law, with combined employer and employee contributions calculated on a capped insurable salary. Employers contribute approximately 18.75% and employees approximately 11% of insurable salary (subject to periodically updated minimum and maximum insurable salary thresholds), covering old-age pension, disability, death, sickness and work-injury insurance. Payroll (salary) tax is withheld monthly by employers under the progressive personal income tax schedule described in section 3.1 and remitted to the Egyptian Tax Authority, with an annual reconciliation obligation for employees with multiple income sources or additional non-payroll income.

3.4 Inbound individuals

There is no net wealth tax and no general inheritance or gift tax in Egypt, though a real estate registration fee applies on transfers of real property including by inheritance or gift (see section 6.2). Foreign employees working in Egypt are subject to the same progressive personal income tax schedule as Egyptian nationals on Egyptian-source employment income, without a specific expatriate concessionary regime, though double tax treaty relief may reduce or eliminate Egyptian tax on short-term assignments meeting treaty dependent-personal-services conditions (typically a 183-day test combined with employer-residence and permanent-establishment conditions). There is no exit tax on individuals ceasing Egyptian tax residence.

Egypt levies dividend withholding tax at 10% on distributions to non-resident shareholders (reduced to 5% for dividends on shares listed on the Egyptian Exchange, subject to conditions), withholding tax on interest paid to non-residents at 20% (with specific exemptions for interest on certain government and bank-related debt instruments), and withholding tax on royalties and technical service fees paid to non-residents at 20%. A domestic withholding tax also applies to payments made by the state and public-sector entities to local contractors and suppliers as an advance payment mechanism, distinct from the non-resident withholding regime. Egypt's treaty network of more than 60 conventions frequently reduces dividend withholding to 5–15%, interest withholding to 10–15%, and royalty withholding to 10–15%, with relief generally requiring a valid certificate of residence and, in practice, advance clearance or a refund claim procedure.

Treaty relief for outbound dividend, interest and royalty payments generally requires the non-resident recipient to obtain a certificate of tax residence from its home tax authority and to submit a treaty relief application to the Egyptian Tax Authority, either for relief at source or, more commonly in practice, for a refund of tax over-withheld at the domestic rate. Egypt applies substance and beneficial-ownership scrutiny to treaty claims, particularly for payments routed through intermediate holding jurisdictions, consistent with its participation in international efforts (including the OECD's base erosion and profit shifting project) to prevent treaty abuse.

5.1 General anti-abuse and hybrids

Egyptian tax law incorporates substance-over-form and anti-abuse principles empowering the Egyptian Tax Authority to disregard or recharacterise arrangements that lack genuine commercial substance and are structured principally to obtain a tax advantage, applied through general assessment and audit practice rather than a single codified GAAR provision of the kind found in EU ATAD-aligned jurisdictions. Egypt has not adopted a comprehensive hybrid-mismatch regime addressing deduction/non-inclusion outcomes from hybrid instruments or entities; related-party interest and royalty deductibility is instead controlled through the thin-capitalisation and transfer pricing rules described in sections 2.4 and 2.8.

5.2 Exit taxation and disclosure

Egypt does not impose a general exit tax on companies or individuals ceasing Egyptian tax residence; taxation of unrealised gains generally arises only on an actual disposal event rather than on a deemed disposal at the point of departure. Egypt has committed to country-by-country reporting for large multinational groups under the OECD BEPS minimum standards (section 2.8) and participates in bilateral and multilateral exchange-of-information arrangements, including under its double tax treaty network, though Egypt's participation in the Common Reporting Standard for automatic exchange of financial account information remains more limited than in many OECD and EU jurisdictions. Mandatory e-invoicing and e-receipt data feeds (section 1.2) give the Egyptian Tax Authority substantially enhanced real-time visibility into domestic transactions, functioning as a de facto disclosure mechanism alongside formal reporting obligations.

6.1 VAT

Value-added tax is levied at a standard rate of 14% on the supply of most goods and services and on imports, under the Value Added Tax Law No. 67 of 2016. A reduced schedule of specific rates and a table tax (ranging typically from 5% to 45% or a specific amount per unit) apply to designated commodities and services outside the general VAT schedule, including machinery and equipment (generally 5%) and specified 'luxury' or excise-adjacent goods and services. Basic foodstuffs, healthcare, education and specified exports are zero-rated or exempt. Registration is mandatory for businesses with annual taxable supplies exceeding EGP 500,000 (EGP 500,000 for services), with monthly VAT returns due by the end of the month following the tax period. Input VAT is generally recoverable for VAT-registered businesses making taxable supplies, subject to documentary requirements increasingly tied to the mandatory e-invoicing system.

6.2 Transaction, payroll and other taxes

Stamp tax under Law No. 111 of 1980 applies to a range of documents and transactions, including certain loan agreements, insurance policies, and advertising, at rates that vary by instrument (proportional or fixed). A real estate registration fee (and related notarisation costs) applies on the transfer of real property, whether by sale, gift or inheritance, generally calculated on the declared or assessed property value. Employers bear social insurance contributions described in section 3.3. Real estate tax (a form of annual property tax) applies to buildings above an exempt threshold, at rates set by the Real Estate Tax Law after deduction of notional maintenance costs. Customs duties apply to imports at rates that vary substantially by product category, with free zone and investment-incentive exemptions available for qualifying imports (section 2.9). There is no net wealth tax and no general inheritance or gift tax beyond the real estate registration fee referenced above.

7.1 Filing, assessment and audit

The Egyptian Tax Authority (ETA) administers income tax, VAT and stamp tax under the unified procedural framework of the Unified Tax Procedures Law No. 206 of 2020. The tax year is generally the calendar year, though companies may adopt a different 12-month financial year with tax authority approval. Corporate income tax returns are filed electronically within four months of the end of the financial year, accompanied by settlement of any balance due, with quarterly advance payments required during the year based on the prior year's liability. The ETA conducts risk-based audits, increasingly informed by e-invoicing and e-receipt transaction data, with a Large Taxpayer Center serving major corporate taxpayers. The general statute of limitations for assessment is five years from the end of the year in which the return was filed, extended where fraud or non-filing is established.

7.2 Rulings, appeals and penalties

Taxpayers may seek advance rulings from the Egyptian Tax Authority on the tax treatment of specified transactions, and advance pricing agreements are available for transfer pricing certainty (section 2.8). Disputes are first addressed through an internal committee review (the Internal Committee) and, if unresolved, an Appeal Committee combining tax authority and independent members; further appeal lies to the ordinary courts (economic courts for larger disputes) on points of law and fact. Late filing and late payment attract escalating penalties and interest calculated by reference to the central bank credit and discount rate, and understatement or evasion can additionally trigger penalties of a multiple of the tax understated, with criminal sanctions available for serious tax evasion under the Unified Tax Procedures Law.

Quarterly CIT advance payments that understate the eventual liability by more than a prescribed margin can attract late-payment interest on the shortfall from the original due date, making an accurate estimate of the current year's results (rather than mechanical reliance on the prior year) advisable where profits are expected to grow materially. The expanding e-invoicing and e-receipt mandate means many compliance deadlines are now effectively monitored in near-real time by the Egyptian Tax Authority, increasing the importance of timely and accurate transaction-level reporting throughout the year rather than only at formal filing deadlines.

9.1 Entity choice

The Limited Liability Company (LLC) is the standard vehicle for foreign and domestic investment, with no statutory minimum capital for most activities, one or more managers, and full corporate tax status at 22.5%. The Joint Stock Company (S.A.E.) suits capital-market ambitions and larger regulated activities, with a minimum issued capital requirement. Branches of foreign companies are permitted for specified activities (notably construction and engineering contracts and representative offices) and are taxed on attributable Egyptian profits at the same 22.5% rate, with those profits then deemed distributed and charged a further 10% under article 56 bis of the Income Tax Law as described in section 2.11. Free zone companies under the Investment Law benefit from a distinct customs and tax regime described in section 2.9, appropriate for export-oriented and qualifying manufacturing operations.

9.2 Structuring and incentives

Investors should evaluate the Investment Law's geographic and sectoral incentive framework early in the structuring process: Zone A (Upper Egypt and underdeveloped governorates) investment cost deductions of 50% of qualifying capital expenditure materially reduce the effective tax rate on new capital-intensive projects, while Zone B projects benefit from a 30% deduction. Free zone status suits export-oriented manufacturing seeking exemption from corporate income tax on zone-qualifying profits, in exchange for an activity-based annual fee and exclusion from the general domestic customs and VAT regime. Financing structures should be tested against the 4:1 debt-to-equity thin-capitalisation limit (section 2.4) and transfer pricing documentation requirements (section 2.8), and holding structures should consider the reduced-inclusion dividend treatment available for substantial, long-held (≥25%, ≥2 years) domestic shareholdings described in section 2.2.

9.3 Worked effective-rate illustration

An Egyptian LLC earns EBITDA of EGP 50,000,000, books depreciation of EGP 6,000,000 and net interest expense of EGP 4,000,000, all within the 4:1 debt-to-equity deductibility limit. Taxable profit before incentives is 50,000,000 minus 6,000,000 minus 4,000,000 = EGP 40,000,000. CIT at 22.5% on that base is EGP 9,000,000. The project qualifies as a Zone A investment under the Investment Law, with qualifying capital expenditure of EGP 20,000,000 in the year, generating an investment cost deduction of 50% × 20,000,000 = EGP 10,000,000. Taxable profit after the incentive is 40,000,000 minus 10,000,000 = EGP 30,000,000, and CIT falls to 22.5% × 30,000,000 = EGP 6,750,000. The cash tax saving from the incentive is 9,000,000 minus 6,750,000 = EGP 2,250,000, an effective rate on the pre-incentive taxable base of 6,750,000 / 40,000,000 = 16.9%. The investment cost deduction is notional and does not reduce the profit available for distribution, which is 40,000,000 minus 6,750,000 = EGP 33,250,000. If that profit were distributed to a non-resident parent holding less than 25% of the company, dividend withholding tax of 10% would apply, adding EGP 3,325,000 of tax and giving a combined effective burden of (6,750,000 + 3,325,000) / 40,000,000 = 25.2% on the pre-incentive taxable base.

9.4 Compliance

Expect mandatory e-invoicing and e-receipt compliance (a precondition for expense deduction and input VAT recovery on counterparty transactions), monthly VAT filing, quarterly CIT advance payments, annual statutory financial statements, transfer pricing documentation above the thresholds in section 2.8, and social insurance registration and monthly contribution remittance for all employees. Free zone and investment-incentive claimants should maintain robust project-level documentation to support qualifying capital expenditure and activity classifications under the Investment Law, and groups with Egyptian constituent entities under a foreign parent's Pillar Two regime should monitor the interaction between Egyptian incentives and the GloBE effective tax rate calculation described in section 2.10.