Corporate Tax in Egypt: A Complete Guide for Businesses (2025)

Corporate tax in Egypt

 Egypt applies a corporate income tax of 22.5 percent on net taxable profits for most companies under the 2025 tax regime. Corporate tax in Egypt is a tax on the profits of companies and branches of foreign entities. It covers resident companies on worldwide income and nonresident companies on profits from a permanent establishment in Egypt. The tax also applies sector-specific rates of up to 40.55 percent for oil and petroleum activities and includes special rules for state authorities. This blog explains corporate tax applicability, filing requirements, deductions, incentives, and practical compliance guidance to help businesses meet obligations and optimize tax efficiency.

Corporate Tax Coverage in Egypt

 Corporate tax in Egypt is an income tax on the profits of a resident or nonresident company operating in the country. A resident company will be taxed on worldwide income including profits earned in Egypt and from abroad, while a nonresident company will be taxed only on profits from a permanent establishment in Egypt such as a branch or agency. The tax base starts with net profits from accounting records and will be adjusted for nondeductible expenses like fines or personal costs and for allowable deductions including business expenses and employer social insurance contributions.

Capital gains and losses will generally be included in taxable profits unless a specific exemption applies. The Egyptian Tax Authority will oversee corporate tax assessment, collection, and enforcement, and all companies must file returns electronically. Clear understanding of taxable income calculation will help a company plan accounts accurately, reduce the risk of noncompliance, and ensure all obligations will be met efficiently.

How Taxable Income and Deductions Work in Egypt

 Egyptian corporate tax defines taxable income as the accounting profit adjusted according to the rules of the tax law. A company will calculate taxable income starting from the net profit of a financial statement and then make adjustments for non-deductible items and allowable deductions. Correct calculation will ensure accurate reporting by the company, compliance with the Egyptian Tax Authority, and reduce disputes or errors on the tax assessment.

Key adjustments and rules include:

• Non-deductible expenses: Add back fines, penalties, and costs that are not related to business operations.  
• Allowable deductions: Deduct salaries, operational costs, and employer social insurance contributions to reduce taxable income.  
• Depreciation rates:  
  • Buildings at five percent on a straight-line basis  
  • Intangible assets at ten percent on a straight-line basis  
  • Computers and IT equipment at fifty percent on a declining balance  
  • Other machinery at twenty-five percent on a declining balance
• Accelerated deductions: Thirty percent first-year allowance on qualifying machinery may be applied with the approval of the ETA.

Corporate Tax Rates and Sector Exceptions in Egypt

 The general corporate tax rate in Egypt is 22.5 percent for most companies under the 2025 tax regime. Certain sectors of the economy will have higher rates based on specific fiscal rules. Companies engaged in oil exploration and production will face an effective tax rate of up to 40.55 percent under the Egyptian tax law.

Some state-linked authorities, including the Suez Canal Authority, Egyptian Petroleum Authority, and the Central Bank of Egypt, will pay approximately 40 percent on profits according to statutory provisions. These higher rates apply on profits and not as separate surcharges. Local governorates will not charge additional corporate income taxes, but fees on property or municipal services may apply. Businesses in these sectors will need to assess the correct rates of tax to ensure compliance and avoid penalties.

Withholding Taxes and Rules for Nonresidents in Egypt

 Egyptian companies must withhold taxes on payments to nonresident entities. Dividends for nonresident corporate shareholders attract 10 percent, while shares listed on the Egyptian Exchange qualify for 5 percent. Interest and royalty payments are withheld at 20 percent unless a treaty sets a lower rate.

These withholdings count as advance corporate tax. Relief can be claimed with a tax residency certificate. The rules apply to cross-border payments and prevent double taxation. They also support compliance and encourage foreign investment. Firms follow clear steps to meet obligations while maintaining access to nonresident capital.

Filing Deadlines, Payments, and Penalties in Egypt

 Corporate tax returns in Egypt must be filed within four months of the fiscal year-end. A company with a year-end of December 31 will have a filing deadline on April 30 of the following year. Businesses may choose an advance payment system, paying 60 percent of prior-year tax in three equal installments. These payments will be credited against the final liability and help manage cash flow.

Late filing or late payment will attract penalties and interest. Interest is calculated as a fixed percentage plus a rate linked to the Central Bank of Egypt. Recent 2025 laws provide settlement mechanisms and relief windows. Timely compliance will reduce costs of noncompliance and ensure smooth operations for the business.

Incentives, Free Zones, and Investment Regimes in Egypt

 Egypt offers several tax incentives to attract investment and support business growth. The measures apply to projects, zones, and enterprises and will reduce tax burdens while promoting compliance. 

Key incentives include:

• Free Zones: Projects will receive corporate tax exemptions on authorized activities and will retain more of their earnings.

• Special Economic Zones: Companies will benefit from customs relief, reduced tax rates, or tax holidays and will gain support for operations and exports.

• Investment Law Approvals: Enterprises approved under the law will enjoy deductions or lower corporate tax rates, lowering the total tax liability.

• Small Enterprises: Businesses with annual turnover up to EGP 20 million will follow simplified tax rules starting 1 March 2025 and will get relief from some withholding and advance payments.

• Eligibility: Firms must obtain licenses, submit reports, and meet all conditions to access the benefits and maintain compliance.

Losses, Group Taxation, and Related Rules in Egypt

 Net operating losses in Egypt can generally be carried forward for five years. Carryback of losses is mostly unavailable. Loss carryforward will be limited if ownership changes by more than 50 percent or if there are significant changes in business activity.

Group relief is restricted. Related companies will not freely offset losses across separate legal entities unless allowed under specific consolidation rules. Transfer pricing rules require intercompany transactions to follow arm’s-length principles. Businesses will maintain proper documentation for master, local, and country-by-country reporting. Careful planning of deductions and intercompany agreements will preserve tax attributes and ensure compliance with ETA regulations.

Conclusion

 Egypt applies a 22.5 percent corporate tax on most businesses. Companies in oil petroleum and certain state sectors will pay higher rates. Returns will be filed within four months from the end of the fiscal year. Net operating losses will offset future profits for up to five years. Payments to nonresident entities will follow withholding tax rules. Projects in approved free zones on special economic zones and small businesses with revenue up to EGP 20 million will receive tax incentives. Late filings or payments will incur penalties and interest. Consulting the Egyptian Tax Authority or a local adviser will help ensure compliance. Keeping clear records of transactions will protect tax benefits and support smoother operations.

FAQs

 Q1: What is the headline corporate tax rate in Egypt?
 The corporate tax rate for most companies is 22.5 percent. Certain sectors of oil petroleum and some state authorities will pay higher rates under the law.

Q2: When are corporate tax returns due?
 Corporate tax returns will be filed within four months from the end of the fiscal year.

Q3: What withholding tax applies to dividends?
 Dividends paid to nonresident entities will be taxed at 10 percent for unlisted shares and 5 percent for shares listed on the Egyptian Exchange.

Q4: How long can losses be carried forward?
 Net operating losses will be carried forward for five years to offset a company’s future taxable income.

Q5: Are there corporate tax incentives?
 Tax incentives will apply for projects in approved free zones on special economic zones and for qualifying investments under the Egyptian investment law.