Egypt’s tax system offers a straightforward and relatively low-tax environment. Corporate income tax is set at 22.5%, while personal income tax follows a progressive structure, ranging from 2.5% to 25%. Notably, Egypt does not impose inheritance, gift, or wealth taxes, making it appealing for businesses and individuals alike. The country follows OECD guidelines for transfer pricing and has strong anti-avoidance rules, ensuring compliance while maintaining a competitive tax landscape.
Egypt’s Tax System overview
| Corporate Income Tax: | 22.5% |
| Personal Income Tax: | 2.5%-25% |
| Inheritance Tax: | None |
| Gift Tax: | None |
| Wealth Tax: | None |
Legal System
The Arab Republic of Egypt is a democratic State, which applies a mixture of Napoleonic Civil Law and Sharia.
Foreign Exchange Controls
The currency is the Egyptian Pound (EGP). Egypt has no foreign exchange controls.
Personal Income Taxation
Individuals resident in Egypt are taxed on worldwide income at progressive rates from 10% to 22.5%.
Corporate Income Tax
Egyptian corporations are subject to tax on worldwide income at standard rates of 22.5%.
Value Added Tax (VAT)
Egypt levies a 14% sales tax on most goods and services, with some exemptions.
Anti-Avoidance Rules
Egypt has General Anti-Avoidance Rules (GAAR). Egypt has Transfer Pricing rules based on OECD guidelines. Egypt has Thin Capitalization rules, and Controlled Foreign Corporation (CFC) rules.
Controlled Foreign Corporations (CFCs)
Egypt has CFC rules which result in income imputation of the undistributed profits of the CFC to the Egyptian shareholder corporation. CFC rules apply where: the Egyptian corporation owns more than 10% of the CFC; more than 70% of the income of the CFC is passive income; and, the profits of the CFC are subject to tax at less than 75% of the Egyptian corporate tax rate.
Double Tax Treaties (DTTs)
Egypt has DTTs with a number of jurisdictions, including Cyprus, Ireland, Malta, Mauritius, Netherlands, Singapore, Switzerland, UAE, UK, and the US.
OECD Multilateral Convention
Egypt has not ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Convention is the underlying instrument to the MCAA, and requires parties to exchange information “on request,” and allows parties to agree spontaneous and automatic exchange.
Common Reporting Standard (CRS)
Egypt has not executed the Multilateral Competent Authority Agreement (MCAA) to implement automatic exchange under CRS, and has not committed to joining CRS.
FATCA
Egypt has not executed a FATCA IGA with the US, and is not treated as having an “agreement in substance” for FATCA.
