Egyptian accounting and tax considerations in 2025

Since 2003, Healy Consultants Group (part of Hawksford) timely accurately and completely discharge our multi-national Clients’ annual legal & accounting & audit and tax statutory reporting obligations. This web page will help your Firm understand your Egyptian fiscal responsibilities:

• Summary of taxation

  • Resident companies are taxed at 22.5% on local and worldwide income. Companies operating in the oil and gas exploration and production activities suffer corporation tax of 40.55%. Trading losses can be carried forward for up to 5 years. The carry-back of losses is not permitted, except for losses incurred by a construction company on long-term contracts.
  • Withholding tax of 10% must be deducted from dividends repatriated to overseas shareholders. Withholding tax of 20% must be deducted from overseas payments of interests, royalties or services. These taxes can be reduced by double tax treaties. To benefit from the same, our Client must successfully file an advance ruling request with the Egyptian Tax Authority (ETA).
  • A standard VAT rate of 14% is applied to all goods and services. The VAT returns must be submitted on a monthly basis. VAT is reported on a self-assessment basis.
  • The standard capital gains tax rate is 22.5%. The deadline to file the capital gains tax return is 60 days from the date of the transaction.
  • The unified customs rate is 2% on imported tools, equipment, and machinery necessary for the establishment of a new business.
  • Employers are required to withhold income tax from employees’ salaries; and remit it to the ETA within 15 days of the end of the month. Furthermore, the employer is also required to submit a quarterly salary return to the tax authority including i) the number of employees and their information and ii) total gross salaries and iii) amount of salary tax withheld and remitted with a copy of payment receipts and iv) any changes that have occurred with respect to the employees. Before the end of January of each year, an annual reconciling employee tax return should be submitted to the ETA. If the amounts included in the tax return are less than the final amounts assessed for tax, an additional penalty may be imposed based on the difference between the amounts included in the return and those in the assessment.
  • Social insurance on employees’ salaries is imposed both on the employee and the employer. The employer share of social insurance is 19% of basic salary. The employee share of social insurance is 11% of basic salary. The employer is obliged to monthly remit the above monthly contributions to the local social insurance office.
  • To fund the state health insurance scheme, all Egyptian companies are required to pay an annual solidarity contribution to the ETA, amounting to 0.25% of annual revenue. This tax must be included within the annual corporation tax return.

• Summary of filings

  Here, our team have summarised the most common filings applicable to most Egyptian companies. From this table you should be able to better understand compliance requirements.

  Filing	Gov agency	Description	Deadline
  Corporate Income Tax	Egyptian Tax Authority	All Egyptian tax resident companies are subject to 22.5% corporation tax. Audited financial statements must be filed together with the corporate tax return.	Annual e-filing within 4 months of the year-end
  Audited annual financial statements	Egyptian Tax Authority and GAFI	Audit is mandatory for all local companies regardless whether the company is active or dormant. All financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS) and in Arabic.	Annual e-filing within 4 months of the year-end
  Transfer Pricing Declarations	Egyptian Tax Authority	All Egyptian tax resident companies are subject to transfer pricing provisions and required to prepare prepare the master file, local file and country-by-country report.	Annual e-filing within 4 months of the year-end
  VAT Returns	Egyptian Tax Authority	All Egyptian tax resident companies are required to file a VAT return regardless whether the company is active or dormant.	Monthly e-filing before the 15 of the following month
  Withholding Tax Returns	Egyptian Tax Authority	All Egyptian companies must levy withholding tax on the amounts paid to local and international companies	Quarterly e-filing within 30 days of the following month-end
  E-invoicing	Egyptian Tax Authority	All entities are required to generate, store and issue electronic tax invoices using compliant e-invoicing systems.	Continuous

• Compliance considerations

  • Within four months of the end of their financial year, Egyptian companies are required to e-submit an annual corporation tax return, together with payment of corporation tax due to ETA.
  • Entities which withhold tax must e-file a quarterly withholding tax form within one month following the end of each quarter and remit the tax along with the tax form.
  • For late filing of any tax return, a penalty of between EGP 3,000 (US$191) and EGP 50,000 (US$3178) is imposed. If the period exceeds 60 days, the penalties range from EGP 50,000 to EGP 2 million. For recurring delays, the penalty may be doubled or tripled. These penalties apply to all taxes including i) corporation tax and ii) payroll and iii) VAT and iv) withholding tax and v) other state taxes.
  • The ETA gives taxpayers a unified tax registration number, to be used for all types of taxes and on all correspondence and transactions. The unified tax number aims to consolidate various tax procedures that apply to corporate income tax, VAT, stamp tax, and other similar taxes. More specifically, the law facilitates the collection of taxes by merging tax filing procedures.
  • All foreign companies in Egypt are required to appoint an Egyptian auditor. Annual financial statements must be audited and submitted to the Companies Department. Egyptian companies follow generally accepted accounting principles (GAAP).
  • All Egyptian businesses must lodge a legal annual return with GAFI, confirming relevant details of the company for the public register including i) names and addresses of all directors ii) address of principal place of business and iii) details of shareholders and their shareholdings and iv) annual audited financial statements. Non-compliance with such reporting requirements shall expose the company to a fine not exceeding EGP 50,000. A dormant company is exempt from this annual obligation.
  • As stipulated by Egyptian regulations, our Client must record their purchases and sales of goods and services in an electronic system. For each sale transaction, e-invoices should include both i) the electronic signature of the company and ii) the value of sales and services and tax due and iii) details requested by the ETA including codes for each type of good or servics. The ETA does not accept paper invoices for VAT deduction or refund purpose.
  • The ETA issued comprehensive explanatory guidelines on specific aspects of Transfer Pricing including the mandatory filing of namely, the master file, local file and the country by country (“CbCR”) reporting. Transfer pricing guidelines allow the ETA to adjust the operating income of an entity, if the income is affected as a result of a controlled transaction that would have yielded different results had the transaction occurred between unrelated parties.
  • To comply with Egyptian laws, it is essential to maintain local books and records in Arabic. A penalty up to EGP 50,000 is imposed on taxpayers that do not keep proper books and records (whether in print or electronically) during the legally required period. Specifically:
    • An Egyptian entity should maintain proper books of accounts and record all invoices and receipts for their company expenses and income. Examples of receipts include those related to business purchases including assets and travel expenses. Occasionally, the ETA reviews company records.
    • Egyptian entities should also maintain the secretarial records such as board resolutions and meeting minutes of all the important management decisions taken by the Directors.
  • All Egyptian companies must appoint a manager, who must be resident in Egypt, but can be any nationality. De-registering an Egyptian company takes at least six months. During this six-month period, it is mandatory to maintain a resident company secretary and a legal registered office in Egypt.
  • Egypt is a civil law country, with a legal system based on the Islamic Shari’a and Napoleonic Codes. Egypt poorly ranks 130th out of 139 worldwide for effective enforcement of civil justice, and likewise (130/139) for regulatory enforcement, with a poor rank of 138th out of 139 for conducting administrative proceedings without an unreasonable delay.
  • Egypt has a network of Double Tax Treaties (DTTs) with over 60 countries, including Canada, China, India, Korea, Norway, Singapore, South Africa, UAE, the United Kingdom and United States. These treaties help reduce Egyptian withholding tax.
  • The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS MLI) entered into force for Egypt on 1 January 2021.
  • Egypt is a member of the World Trade Organization (WTO). Furthermore, Egypt is a signatory to several multilateral trade agreements including:
    • Agadir Free Trade Agreement among Egypt, Morocco, Tunisia and Jordan.
    • Common Market for Eastern and Southern Africa (COMESA).
    • Egypt-MERCOSUR Free Trade Agreement.
    • Egypt-Türkiye Free Trade Agreement.
    • Egyptian-European Mediterranean Partnership Agreement.
    • European Union-Egypt Free Trade Agreement (Association Agreement).
    • Free Trade Agreement with European Free Trade Area (EFTA) States.
    • Greater Arab Free Trade Area Agreement.
    • Pan Arab Free Trade Area (PAFTA).
    • The African Continental Free Trade Area (AFCFTA).
    • United Kingdom-Egypt Association Agreement.

• How we can help our multi-national Clients

  Healy Consultants Group will be happy to help our multi-national Clients with:

  • Monthly book-keeping services, maintaining accounting records in Arabic and in compliance with the requirements of the ETA.
  • Monthly and quarterly Government reporting including i) VAT and ii) payroll and iii) withholding tax and iv) advance corporation tax payments.
  • Human resource services including recruitment and payroll management.
  • Supervision of the independent statutory annual audit.
  • Timely filing of annual corporation tax return and audited financial statements.

• Conclusion

  It is common for our multi-national Clients’ to outsource to Healy Consultants Group the responsibility to timely discharge their legal, accounting, audit and tax obligations. Over the coming years, we look forward to helping your Firm.