Egypt

Inventory valuation

Egyptian generally accepted accounting principles (GAAP) should be applied to inventory valuation, and all methods that are acceptable by Egyptian GAAP can be used. The methods acceptable are almost the same as those acceptable under International Financial Reporting Standards (IFRS).

Capital gains

Capital gains arising from the disposal of unlisted securities or quotas are generally calculated as the difference between the selling, exchange or other disposal value and the acquisition cost, after deducting brokerage commissions. 

As of the issuance of Law No. 151 of 2026, the capital gains tax (CGT) treatment applicable to the disposal of listed and unlisted securities or quotas is as follows:

Listed securities: Capital gains realised from the disposal of securities listed on the Egyptian Exchange (EGX) are not subject to Capital gains tax. However, the exemption does not apply where the disposal results in the company's shares being delisted from the EGX. 

Unlisted securities or quotas: Capital gains are generally calculated as the difference between the selling, exchange, or other disposal value and the acquisition cost, after deducting brokerage commissions. Where unlisted securities or quotas are disposed of at fair value after being held for at least three years, the acquisition cost maybe increased by an amount equivalent to the Central Bank of Egypt's announced credit and discount rate for each year of the holding period. The acquisition cost is calculated using the weighted-average method. 

Capital gains realised by non-residents from the disposal of non- governmental securities listed on the EGX are exempt from capital gains tax. However, the exemption does not apply where the disposal results in the company's shares being delisted from the EGX. 

The Executive Regulations governing the application of these amendments have not yet been issued as of the date of this update. 

Capital gains tax (CGT) treatment applicable to resident companies

• Capital gains realised from the disposal of securities listed on the EGX are not subject to capital gains tax, effective from 29 July 2026. However, the exemption does not apply where the disposal results in the company's shares being delisted from the EGX.
• Capital gains realised from the disposal of unlisted shares, securities, or quotas are generally subject to CGT at the rate of 22.5%. 
• Foreign shares/securities (invested abroad): Capital gains realised from shares invested abroad would be subject to a capital gains tax at the rate of 22.5%, with a credit to be given for the foreign tax paid. 

CGT treatment applicable to non-resident companies

• Capital gains realised from the disposal of unlisted securities or quotas are generally subject to tax at the rate of 22.5%. A non-resident disposer is required to calculate and remit the tax due within 60 days from the transaction date, in accordance with the procedures prescribed by the Executive Regulations.

• Capital gains realised by non-residents from the disposal of Treasury bills are not subject to this capital gains tax.

Capital losses

Capital losses arising from the disposal of unlisted non-government bonds are not deductible for Egyptian corporate income tax purposes. 

Following the recent amendments, capital gains arising from the disposal of securities listed on the Egyptian Exchange are no longer subject to capital gains tax. Accordingly, any related capital losses should likewise not be deductible or available for offset for capital gains tax calculation purposes. 

Dividend income

Dividend income treatment applicable to resident companies

As a general rule, a 10% withholding dividends tax (WHT) is imposed on dividends paid by Egyptian companies unlisted on the EGX to resident corporate shareholders. The WHT rate is reduced to 5% where the dividends are paid by Egyptian companies listed on the EGX to corporate shareholders. 

However, under Law No. 151 of 2026, dividends received by an Egyptian resident Juridical person from another Egyptian Juridical person are excluded from the corporate income tax base. The corresponding costs relating to such dividends are eliminated from the corporate income tax base. 

In addition, dividends received by an Egyptian resident company from another Egyptian resident company are excluded from the dividend tax base. 

The relevant Executive Regulations have not yet been issued as of the date of this update. 

Dividend income treatment applicable to non-resident companies

A 10% WHT will be imposed on dividends paid by Egyptian companies unlisted on the EGX to non-resident corporate shareholders. The 10% WHT will be reduced to 5% if the dividends are paid by Egyptian companies listed on the EGX. 

Participation exemption

Dividends received by an Egyptian resident parent or holding company from resident or non-resident subsidiaries are exempt from corporate income tax where both of the following conditions are met: 

• The parent or holding company owns at least 25% of the share capital or voting rights of the subsidiary. 

• The participation has been held for at least two years, or the parent or holding company commits to hold the participation for at least two years from the date of acquisition.

Permanent establishments (PEs)

Profits realized by a non-resident juridical person through a permanent establishment in Egypt are deemed to be distributed within 60 days from the end of the PE's financial year and are subject to the applicable dividend tax treatment. 

Stock dividends

Stock dividends are not subject to tax in Egypt.

Interest income

Interest expenses are deducted from interest income when calculating the interest income to be included in taxable income, provided certain conditions are met.

Generally, interest income is not taxed separately; it is considered as part of the company's income and taxed accordingly (i.e. at the 22.5% CIT rate).

Rent/royalty income

Rent/royalty income are not taxed separately; they are considered as part of the company's income and taxed accordingly (i.e. at the 22.5% CIT rate).

Foreign income

Income from any source, domestic or foreign, received by a corporation within Egypt is subject to CIT. The scope of tax covers the activities carried out inside and outside Egypt, which are administered or managed within Egypt.

There is no provision for deferring income earned abroad.