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Egypt - Apply for Withholding Tax

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Contents

Introduction

A withholding tax, also called a retention tax, is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay.This tax is a deduction from an employee's income that the employer sends directly to the state tax authorities. There are no withholding taxes as such in Egypt, apart from scheduled income taxes which are withheld at source in many cases. Dividends distributed by an Egyptian company are not subject to withholding tax. The main instances where taxes are withheld are summarized below.

Tax on income derived from moveable capital is withheld in many cases, including payments to a foreign company that has no branch in Egypt and payments to non-resident individuals. Royalties and technical assistance fees paid to a foreign company with no branch in Egypt are normally subject to the 40 percent corporate income tax rate. The tax is imposed on the net amount after an arbitrary deduction for expenses. Amounts are also withheld on account of taxes due at 10 to 15 percent on the amount payable for professional services, at 3 percent on commercial services and at 10 percent on commissions paid to commercial agents. Lastly, employers must withhold the scheduled tax on salaries and wages from their employee's pay.

Eligibility

  1. All employee's in Egypt are required to pay withholding Tax.
  2. All income from movable capital is withheld for tax.
  3. All Foreign companies that has no branch in Egypt are entitled to pay withholding tax
  4. All payment deducted from professional service are entitled to a 40% corporate tax.
  5. Any company in which the Government of Egypt has interest

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Instructions

  • The tax is imposed on the net amount after an arbitrary deduction for expenses.
  • Amounts are also withheld on account of taxes due at 10 to 15 percent on the amount payable for professional services, at 3 percent on commercial services and at 10 percent on commissions paid to commercial agents.
  • Employers must withhold the scheduled tax on salaries and wages from their employee's pay.
  • The withholding agent is required to keep the records of payment and withholding for 5 years

Required Information

  1. Name
  2. Address
  3. Marital status
  4. Date/Country/place of birth
  5. Sources of income
  6. Type of business activity
  7. Tax agent
  8. Referee

Procedure

  1. The withholding agent is required by the Income Tax Act to pay to ERA the tax withheld (or that should have been withheld), within 15 days after the end of the month in which the payment was made.
  2. In the case of a person about to leave Egypt, the tax should be withheld and paid before the payee leaves.
  3. The agent is further required to maintain and avail for inspection by ERA, records of all payments to the payee(s) and the corresponding tax withheld for five years after the end of the year of income to which such records relate.
  4. Upon receiving the payment of tax, ERA should issue, to the payee a Tax Credit Certificate, setting out the tax withheld. The withholding agent is required to obtain from ERA and deliver the tax credit certificate to the payee.

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Required Documents

  • Completed and filed withholding tax registration form
  • Tax Identification Number (TIN)
  • Identification documents

Fees

  • You register for free of charge
  • Profit from dividends, executive director's fees, capital interest, and other gains on investments are subject to a 32-percent withholding tax.

Validity

Valid for a year

Documents to Use

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Sample Documents

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Processing Time

7 working days

Office Locations & Contacts

Ministry of Industry and Trade

Mr. Mounir Fakhry Abdel Nour img

Address 2 Latin America St. Garden City .Cairo

Phone no. 27921193 - 27921194

Fax 27940554

E-mail N/A

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

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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". 
	

Information which might help

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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

https://www.egypt.gov.eg/english/guide/directory.aspx

http://www.infoprod.co.il/country/egypt2e.htm

http://www.justlanded.com/english/Egypt/Egypt-Guide/Money/Taxes

http://www.doingbusiness.org/data/exploreeconomies/egypt/paying-taxes

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