Egypt: Business Environment
Under the unified social insurance and pension law, the contribution rate is 29.75%, with the employee contributing 11% and the employer 18.75%. For 2024, the monthly salary caps are EGP 2,000 (minimum) and EGP 12,600 (maximum). Allowances for transportation, travel, meals, and accommodation can be excluded from the salary cap if they do not exceed 25% of the contribution salary.
There are two distinct types of stamp tax, which are imposed on legal documents, deeds, banking transactions, company formation, insurance premiums, and other transactions, as follows: the nominal stamp tax is imposed on documents, regardless of their value. The tax rate for items such as contracts is EGP 1 for each paper; whereas a percentage or proportional stamp tax is levied based on the value of transactions (from 0.05% to 0.3% of the total proceeds realised). An annual proportional stamp tax at the rate of 0.4%, shared by the bank and the client, is imposed on a bank's loans.
Stamp tax rates on insurance premiums are as follows: 1% on each life insurance premium, 2% on premiums for illnesses, bodily injuries, related civil liability, and compulsory insurance. An 11% tax applies to insurance for land, river, sea, and air transport (minimum one pound). Other insurance premiums, including war risk insurance, are also taxed at 11%, with a minimum of one pound.
Stamp tax is applied to the total value of trading in securities (Egyptian or foreign, listed or unlisted), excluding public treasury bills and bonds, with no deductions for expenses. The rates are 0.125% for nonresident buyers and sellers, and 0.05% for resident buyers and sellers. A higher rate of 0.3% applies to both buyer and seller for sales or acquisitions of at least 33% of a resident company's shares or voting rights, or assets or liabilities by another resident company in exchange for shares. If multiple transactions by one entity exceed the 33% threshold within two years, the 0.3% rate applies to the total transaction amount, allowing offsets for previously paid stamp tax. Stamp tax does not apply to same-day securities transactions.
Egypt | Middle East & North Africa | United States | Germany | |
Number of Payments of Taxes per Year | 27.0 | 20.8 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 370.0 | 204.0 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 44.4 | 32.1 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Individual income tax | Progressive rate from 0% to 22.5% |
Up to EGP 40,000 | 0% |
From EGP 40,001 to 55,000 | 10% |
From EGP 55,001 to 70,000 | 15% |
From EGP 70,001 to 200,000 | 20% |
From EGP 200,000 to 400,000 | 22.5% |
From EGP 400,000 to 1,200,000 | 25% |
Above EGP 1,200,000 | 27.5% |
Annual taxable income determines the applicable tax brackets, with higher incomes ineligible for lower tax rates, as outlined below: • Income up to EGP 600,000 falls within all tax brackets except the 27.5% rate. • Income between EGP 600,000 and EGP 700,000 excludes the 0% rate. The first EGP 45,000 is taxed at 10%, with the remainder following subsequent brackets. • Income between EGP 700,000 and EGP 800,000 excludes the 0% and 10% rates. The first EGP 60,000 is taxed at 15%, with the remainder following subsequent brackets. • Income between EGP 800,000 and EGP 900,000 excludes the 0%, 10%, and 15% rates. The first EGP 200,000 is taxed at 20%, with the remainder following subsequent brackets. • Income between EGP 900,000 and EGP 1.2 million excludes the 0%, 10%, 15%, and 20% rates. The first EGP 400,000 is taxed at 22.5%, with the remainder following subsequent brackets. • Income exceeding EGP 1.2 million excludes the 0%, 10%, 15%, 20%, and 22.5% rates. The first EGP 1.2 million is taxed at 25%, with the remainder at 27.5%. |
All business expenses are deductible if they are related to the commercial or industrial activities of the establishment and essential for conducting those activities. Additionally, expenses must be verifiable with supporting documentation, such as electronic invoices and receipts, except for those not typically documented. Electronic invoices become mandatory starting July 2023, and electronic receipts starting January 2025.
For self-employed, losses may generally be carried forward against future business profits for a period of maximum five years.
The rates may be reduced under an applicable tax treaty.
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Latest Update: July 2024