Egypt

Individual - Other taxes

Last reviewed - 16 January 2020

Social security contributions

Expatriate employees working in Egypt are not allowed to subscribe to the Egyptian social insurance scheme, except in the following cases:

  • A reciprocal treaty between Egypt and the expatriate’s country allows them to join Egypt’s social security program.
  • The expatriate’s employment contract covers a period exceeding one calendar year.

Employee contributions

Egyptian monthly social security contributions are based on two components: basic salary and variable salary.

The amounts paid to the concerned social insurance offices should be in accordance with the following:

Employee Basic Variable
Salary maximum EGP 1,670 EGP 4,040
Maximum contribution EGP 211 EGP 444
Rate 14% 11%

Employer contributions

There is no payroll tax other than the employer's social security contributions.

The amounts paid to the concerned social insurance offices should be in accordance with the following:

Employer Basic Variable
Salary maximum EGP 1,510 EGP 4,040
Maximum contribution EGP 393 EGP 970
Rate 26% 24%

In addition to the above, any managers/board of directors whose names are included in the commercial register of the company will be socially insured as employers and would be subject to social insurance at a flat rate of 15% of the total maximum basic and the variable salary thresholds above (i.e. EGP 5,550).

Consumption taxes

Value-added tax (VAT)

A new VAT law was issued on 8 September 2016, with immediate effect, which abolished the previously existent general sales tax (GST) law. The new VAT law differs from the abolished GST law as it is applied to a broader range of goods and services. However, it exempts a number of basic goods and services that affect low-income earners (in addition to other exemptions listed within the law). It also introduced the reverse-charge mechanism in Egypt for the first time, whereby transactions involving non-residents providing services/royalties to Egyptian resident entities have become subject to VAT in Egypt.

The standard VAT rate is 13% for the financial year 2016/17 (until 30 June 2017); however, starting from the financial year 2017/18 (i.e. as of 1 July 2017), the VAT rate has increased to 14%, applicable on all goods and services, except for machinery and equipment used for production purposes, which are subject to a 5% VAT (although buses and passenger cars are subject to different tax rates).

Registration requirements

  • Businesses registered under the GST law will automatically be considered registered for VAT purposes, provided their annual turnover exceeds the new registration threshold of EGP 500,000.

  • Importers of taxable goods registered under the abolished GST law will automatically be considered registered for VAT purposes, regardless of their turnover.

  • Businesses not required to register under the GST law, and that are required to register for VAT purposes under the new law, must apply to the Egyptian Tax Authority (ETA) for their VAT registration within 30 days from the date of reaching the VAT registration threshold.

  • Businesses currently registered under the GST law with a turnover below the new VAT threshold shall be de-registered automatically, unless they specifically request to remain registered within 30 days from the effective date of the new law.

Transitional period

The new law grants businesses a three months transitional period for reconciling their VAT position, during which the ETA will not levy delay fines for errors or omissions.

Important note

It’s worth noting that the executive regulations of the Egyptian VAT law were published in the official gazette as of 7 March 2017, providing further clarifications regarding the application of the VAT.

Net wealth/worth taxes

There are no net wealth/worth taxes in Egypt.

Inheritance, estate, and gift taxes

There are no inheritance, estate, and gift taxes in Egypt.

Property taxes

The real estate tax law takes into consideration the different variables that can affect the value of a property, such as location, value of similar buildings, and the economic situation of the district in which the property is located. This is to be updated every five years.

Real estate tax is levied annually on all constructed real estate units. This covers land and building, excluding plant and machinery.

Such tax is assessed based on the rental value of the land and building, and these value assessments are set by the committees, after approval of the Minister or whomever the Minister delegates, and published in the Official Journal. Based on the announcement, any taxpayer can appeal the rental value assessment within 60 days following the publication date in the Official Journal.

The real estate tax rate is 10% of the rental value, and the calculation of the rental value differs for residential units and non-residential units. Specific percentages of deductions are provided by the law to account for all the expenses incurred by the taxpayer, including maintenance costs.

The new Real Estate / Property Tax Law is effective starting from 1 July 2013.

Luxury and excise taxes

The sales tax law includes an excise tax on some products, such as the tobacco, alcohols, and medicines.

Other non-income taxes

Transfer tax

There is a 2.5% transfer tax on sales of built real estate or land prepared for building, assessed on the total disposal value of the property without any deductions except for villages under certain conditions mentioned in the law.

Stamp tax

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 0.9 for each paper.
  • Percentage or proportionate stamp tax is levied based on the value of transactions.

A proportional stamp tax at the rate of 0.4% annually (i.e. 0.1% per quarter) is imposed on the bank's loan and shared by the bank and the client. This stamp tax is due on a quarterly basis on the beginning balance of each quarter of credit facilities and loans and advances provided by Egyptian banks or branches of foreign banks during the financial year in addition to the amounts utilised within this quarter. 

Loans from other establishments are not subject to this tax.