If you want to do business in Egypyt, this article explains the tax laws for a LLC which is the most common legal entity in Egypt.
Egypt taxes resident companies on their worldwide income. The prevailing approximate tax for offshore income, from our research, and this is not personal tax advice, is 22.5%. Foreign tax paid may be deductible, but may not exceed the total tax payable in Egypt. Taxes are reasonable in Egypt as the highest corporation tax rate is 22.5%. This ranks Egypt as 95th overall in terms of corp. taxation rate internationally.
The value added tax (VAT) rate in EG is 13%, that ranks Egypt as 78th overall with regards to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 26% to the equivalent of a social security fund and an employee will contribute 14%. The overall complexity of the tax system is high. This is measured by average time to comply with a country's labor tax requirements is as it is 165 hours. Contributing to this is the number of yearly labor tax payments, which is 12 in EG.
Thin capitalization restrictions are officially enacted. Thin capitalisation refers to any type of requirements on given company with respect todebt-to-asset ratios.
Dividends paid to resident companies are subject to 10% withholding tax. Tax may be reduced to 5%, if a participation exemption apply: resident company holds at least 25% of shares of the subsidiary and holds or comitts to hold such participation for two years. Dividends received from resident entities are not taxable. Those received from foreign subsidiaries are subject to CIT, but they may be 90% exempt, if the aforementioned participation exemption apply. Dividends are payments of a company profit, decided by the board, to a particular class of shareholders. Dividends can be either cash payments, shares of stock, or other property.
Capital Gains are subject to Corporate Income Tax. However, those obtained from the disposable of shares listed on the Egypt Stock Market are taxed at a reduced CIT of 10%. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.
The interest withholding tax rate is estimated at 20%. This should be interpreted usually that the tax authorities expects LLC's to automatically withhold 20% of money remitted abroad on interest payments. The dividends withholding tax rate is 10%. Which means that the relevant tax authorities expects LLC's to withhold 10% of dividend payments to non-residents, unless tax is reduced to 5%, if participation exemption apply. The royalties withholding tax rate 20%. This should be interpreted usually that the tax authorities expects relevant legal entities to pay tax on at least 20% of money remitted abroad on royalty payments. Withholding taxes may be reduced under a tax treaty.
There is no known tax on wealth in Egypt. There is an inmovable asset tax. There are no known inheritance and transfer taxes in Egypt. We are aware of frequently implemented R&D initiatives that provide tax relief in this country.
The above is not tax or legal advice for your individual facts and circumstances. We can to help you find to a lawyer in Egypt who will advise you. Want to work together? Click the free consultation button above.
It takes approximately 69 hours to file and prepare documents for a Egypt Islamic Law.
The corporate tax is approximately 22.5% which is 96 in the world.
Owners of a company in Egypt are not allowed to carry back a loss and may be allowed to carry forward a loss for 5 years.
The vat rate in Egypt is 14% which ranks 76 in the world.