Direct Taxes
It is the tax that individuals and companies pay directly to the state.
The tax paid by companies is the income tax at 22.5%, and the tax on the profits of selling assets of the companies (capital profit tax) at 22.5%.
As for individuals, they are subject to the following taxes:
Tax on individual income
Individuals are accounted for according to the tax brackets system after deducting exemptions as follows: the tax exemption limit of EGP 15,000, in addition to the personal exemption limit of EGP 7,000, so, the income will be tax-exempt up to EGP 24,000 annually and what exceeds EGP 24,000 is subject to tax in the following brackets:
- The first bracket: Income ranges between 15-30 thousand pounds is subject to tax at 2.5%.
- The second bracket: Income ranges between 30-45 thousand pounds is subject to tax at 10%.
- The third bracket: Income ranges between 45-60 thousand pounds is subject to tax at 15%.
- The fourth bracket: Income ranges between 60-200 thousand pounds is subject to tax at 20%.
- The Fifth bracket: Income exceeding 200 thousand pounds is subject to tax at 25%.
Real estate transaction tax
In the event that an owner sells his own apartment for one time, it is subject to the real estate transaction tax at 2.5% of the value of the transaction. In case of real estate transaction more than once for the same unit, it is subject to the profits tax on commercial and industrial activity according to the brackets and is not subject to the real estate transaction tax.
Real estate tax
The Real Estate Tax Authority of the Ministry of Finance also collects a tax on housing units that exceed 2 million pounds, explaining that the housing unit that a citizen takes as the main residence for himself and his family is exempt from tax if its value is less than 2 million pounds.
Indirect Taxes
Indirect taxes in Egypt are divided into two types:
- The first is value-added taxes on goods and services purchased by citizens according to tax brackets.
- The second is customs taxes on goods imported from abroad.
Conclusion
In conclusion, taxes are a significant source of revenue for the state in Egypt. Direct taxes are paid by individuals and companies directly to the government, while indirect taxes are imposed on goods and services purchased by citizens, as well as on goods imported from abroad. Companies are subject to income tax and capital profit tax, while individuals are taxed based on a tax brackets system that deducts exemptions based on income. Additionally, real estate transactions and properties exceeding a certain value are subject to taxes. It is important for individuals and businesses to understand the tax laws in Egypt to ensure compliance and avoid penalties. The taxes collected by the government are crucial for funding public services, infrastructure development, and various other initiatives that benefit the citizens of Egypt.
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