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Egypt - Apply for Employment Income Tax

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Contents

Introduction

Employment income tax is levied on salaries, wages, compensation awards, overtime pay and all cash and in-kind fringe benefits.

The following rules apply to the taxation of employment income
  • Casual workers are also subject to tax.
  • Tax is imposed on income generated from Egyptian sources, regardless of whether the work is performed in or outside Egypt. Tax is also imposed on income generated from foreign sources for work performed in Egypt.
  • Tax is imposed on all salaries, remunerations and bonuses paid to managing directors, board members and managers of corporations for the performance of administrative duties.

Self-employment income – Income tax is levied on non-commercial profits derived by professionals or independent persons practicing other non -commercial activities in Egypt if work is the primary element of the activity (for example, lawyers, accountants, artists and writers).

This tax applies to any income derived from professions or activities not otherwise subject to tax in Egypt. Graduates and members of a professional association about to practice for the first time enjoy certain exemptions. Income tax is levied on the net profits of business income from all activities carried on by commercial and industrial entities operating as sole traders, partnerships and limited partnerships in Egypt, and on profits derived from certain other categories of income as specified by law. Non-residents with commercial and industrial activities are taxed only on income earned from an establishment in Egypt or from operations carried on in Egypt. A taxpayer may offset losses against profits of a business and may carry losses forward for a period up to 5years. Losses may not be carried back. Losses incurred in long-term projects may be carried back within the same project.

Eligibility

All Egyptian residents are eligible to Employment income tax on the following grounds.
a). Self-employment income.
b). Income from Salaries, wages, compensation awards, overtime pay and all cash and in-kind fringe benefits.
C). income from Investments: Dividends and interest received by residents from shares, bonds and debentures of companies that are officially listed on the Egyptian stock exchange.


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Instructions

All Egyptian residents who earn income from any meaningful employment or gain a reward must register for Employment income Tax on their income derived from Egypt, as well as be familiar with the rules relating to the filing of Employment income tax and How it is calculated.

Required Information

  • Name of Taxpayer
  • Taxpayer Identification Number
  • Business Name or Trade Name of Taxpayer
  • Status
  • Bank Details
  • Name of Bank
  • Bank branch
  • Account Number
  • Type of Employment
  • Total Income received from employment, Income Total Tax Payable


Procedure

Individuals engaged in business or professional activities must notify the tax authorities within 30 days of starting such activities and within 30 days after ceasing activities or relocating.

Employees are not required to submit annual returns for their employment income. Companies must withhold monthly tax from the salaries of employees and remit such amounts to the tax authorities.

It is the employer’s responsibility to withhold and remit the tax to the tax authority within 15 days following the month of payment. Employees are required to report their income to the tax authority and remit the tax due on their income only if they have income other than employment income in Egypt, or the employer is nonresident for tax purposes, or has no PE in Egypt.

Non-residents with commercial and industrial activities operating as partnerships must file annual tax returns within 4 months after the end of the financial year or within 30 days after the cessation of their activities.

If an individual fails to pay the tax due before the due date, a delay penalty applies until the date of payment. The delay penalty is imposed at a rate of 2% plus the credit and discount rate set each January by the Central Bank of Egypt.

  • Employer should Go to the Office of General Directorate of Taxes at the Egyptian Tax Authority.
  • The employer should Bring with them the required documents within 30 days.
  • Present the documents.
  • You will be asked to wait while your documents are being processed.
  • You will be called to the cashier to pay the application fee and necessary tax.
  • Pick up your Employment income tax certificate.

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Required Documents

The registration requirements are as follows:

  • A copy of certificate of incorporation.
  • List of income earned from employment or annual income from rewards.
  • The Directors’ Tax Clearance Certificates (now Electronic Tax Clearance Certificate)
  • Letter of application for registration,


Fees

  • All taxpayers are entitled to 5,000 Egyptian pounds (EGP) zero-rated tax
  • 10 percent is applicable to annual taxable income between EGP5,001 and EGP20,000
  • 5 percent is applicable to annual taxable income between EGP20,001 and EGP40,000
  • 20 percent is applicable to annual taxable income between EGP40,001 and EGP10,000,000
  • 25 percent is applicable to annual taxable income in excess of EGP10,000,000
  • Royalties are taxed on gross income at a rate of 20%. Several tax treaties concluded between Egypt and other countries have specific rates for taxes on royalties, varying from complete exemption to a tax of up to 20% of gross royalties.
  • Interest is subject to a 20% withholding tax with some specific exemptions. Special rates are established by certain tax treaties.

Validity

Valid for 1 year.

Documents to Use

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Sample Documents

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Processing Time

Processing takes 7 working days

Office Locations & Contacts

Ministry of Finance

Mr. Hany Kadry img

Address Nasr City

Phone no. 23428886 - 23428010 - 23428830

Fax 26861680 - 2686181

Fax: ++2(0)2 26861861

Email Address: mofinance@idsc1.gov.eg

E-mail finance@mof.gov.eg


Website http://www.mof.gov.eg


Egyptian Tax Authority

Website: www.eta.gov.eg/English

Ministry of Finance

Ministry of Finance Towers, Nasr City.

Extension of Ramsis Street,

Abbassiya, Cairo

Tel: +20 2 2342 8886;

Tel: +20 2 2342 8010;

Tel: +20 2 2342 8032;

Tel: +20 2 2342 8830;

Tel: +20 2 2342 8840

Email: finance@mof.gov.eg

Website: http://www.mof.gov.eg/english

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Video

Videos explaining the procedure or to fill the applications. 
Attach videos using the following tag <&video type="website">video ID|width|height<&/video&> from external websites.
Please remove the "&" inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver, 
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is displayed.
e.g In the following url "http://www.youtube.com/watch?v=Y0US7oR_t3M" Video ID is "Y0US7oR_t3M". 
	

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Other uses of the Document/Certificate

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e.g. Birth Certificate can be used as proof of identity.

External Links

http://www.expat.hsbc.com/1/PA_ES_Content_Mgmt/content/hsbc_expat/pdf/en/global_tax_navigator/egypt.pdf

http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/thinking-beyond-borders/documents/egypt.pdf

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