Egypt

Law No. 44 of 2014, followed by Law No. 53 of 2014, ('the new laws') were enacted in June 2014 to amend some of the provisions of the Egyptian Income Tax Law (No. 91 of 2005). The major amendments of the Law include the following:

• Worldwide taxation of individuals.
• Tax on dividend income.
• Tax on capital gains.

Ministerial Decree No. 172 for the year 2015 ('the new executive regulations') was enacted in April 2015 to amend some of the provisions of the executive regulations of the Egyptian Income Tax Law (No. 91 of 2005). The major amendment of the new executive regulations includes the worldwide taxation of individuals.

The Law introduced the new concept that Egypt should be the individual's centre of commercial or industrial activities in order for foreign-source income to be subject to Egyptian individual income tax.

The executive regulations defined the centre of commercial or industrial activities to be the seat where the individual's decisions necessary for conducting one's activities take place and where one's vital interests are located.

In August 2015, a new law was introduced (Law No. 96 of 2015) that introduced some amendments to the Egyptian Income Tax Law (No. 91 of 2005). The major amendments of the law include the following:

• The application of the tax on dividend income.
• The application of the tax on capital gains.
• Payroll tax rates and their applicable brackets.
• The 5% surtax was abolished.

In June 2023, additional amendments were introduced (Law No. 30 of 2023) to the Egyptian Income Tax Law (No. 91 of 2005). The major amendments of the law include the following:

• An additional tax bracket of 27.5% is added for individuals earning over 1.2 million Egyptian pounds (EGP) annually.
• The application of the tax on returns received from funds.
• Certain capital gains reliefs upon meeting specific criteria.

Furthermore, the new amendments have introduced some changes to the payroll tax calculation for employees receiving salary from a non-principal employer, as follows:

• The non-principal employer is required to withhold 10% (as an initial payroll tax that should be settled by the principal employer from the payments done to resident individuals) and remit it to the relevant tax authority within the first 15 days of each month.
• The non-principal employer should inform both the principal employer and the tax authority about the amount received by the individual and the tax deducted.

In addition to the above, changes have taken place with regard to the withholding tax (WHT) on dividends made by Egyptian companies to resident and non-resident individuals. Please refer to the Income determination section for more details.