Example 1
Exempted Income: Certain income sources, such as pensions, end-of-service bonuses, and specific allowances, may be exempt from income tax.
Tax Exemptions: The law legislator updated the personal exemption limit to be 20000 L.E.
Business Income: Self-employment income is taxed according to standard tax brackets.
Employment Income: Salaries and bonuses earned from employment are subject to taxation for both residents and non-residents, irrespective of where the salary is received. Tax rates range from 10% to 27.5% based on income levels.
Equity Compensation: Taxation may apply when employees realize equity compensation, calculated based on the discrepancy between the fair market value of shares and the purchase price.
Capital Gains: Profits from share sales, whether listed or unlisted, are subject to capital gains tax, influenced by residency status and share type.
Returns Received from Funds: Gains from funds received by individuals are taxed at a flat rate.
Dividend and Bunds Interest Income: Dividends from Egyptian companies and interest income from local banks are subject to withholding tax, with varying rates for residents and non-residents.
Rental Income: Taxable income from real estate rentals is determined after deducting a specified percentage from the actual rental value.
Understanding these tax regulations is crucial for accurate tax reporting and compliance.
Social Security Contributions:
Egypt mandates social security and social insurance contributions for both employers and employees to provide comprehensive benefit coverage. Here’s a summary of the contribution rates and other relevant details:
Aging, Disability, and Death Insurance: Contributions total 21% (9% by employees and 12% by employers).
Health Insurance: Contributions total 4.25% (1% by employees and 3.25% by employers).
Work Injuries: Employers contribute between 1.5% to 2% for work injuries.
Unemployment: Employers contribute 1% towards unemployment benefits.
End of Service Bonus: Contributions total 2% (1% each by employees and employers).
Insurable Salary: Monthly salary thresholds range from EGP 1200 to EGP 8100, adjusted annually based on inflation rates.
Exempted Allowances: Certain allowances, like meals and housing, are excluded from the insurable salary calculation, capped at 30% of the total.
Compliance with these regulations is essential to ensure proper benefit coverage and adherence to legal requirements for both employers and employees
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