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Last updated at
December 8, 2025
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Book NowEgypt updated personal income tax rules through amendments effective in 2024 and measures that carry into 2025. These rules impose tax on residents for their worldwide income and on nonresidents for income earned in Egypt. The system uses progressive brackets with a zero rate up to EGP 40,000 and a top marginal rate of 27.5 percent for income above EGP 1,200,000. The annual personal exemption is EGP 20,000. Annual returns and balance payments follow set deadlines and payroll tax is generally withheld at source. This blog explains scope, residency tests in Egypt, taxable income rules, rate structure in Egypt, withholding, deadlines, incentives, loss relief, capital gains changes in Egypt, and includes practical examples.
Personal income tax in Egypt applies to individuals who are tax residents of Egypt and to nonresidents with income on Egyptian sources. A person will be considered a resident if they have a physical presence of more than 183 days in any 12-month period or maintain a permanent home in Egypt. Residents will report income earned worldwide while nonresidents will be taxed only on income on Egyptian sources including wages, rent from property and certain investment returns.
For income earned across borders, a tax residency certificate issued under the relevant double tax treaties is often required to claim relief from double taxation. Individuals must ensure that all income and the relevant documentation will be reported accurately to the Egyptian tax authority. Residency status will affect tax obligations, eligibility for deductions and allowances and the qualification for special exemptions under Egyptian law.
In Egypt, taxable income will be calculated by subtracting allowable deductions from gross receipts on all income sources including salary, professional, business income, rents, and investments. For employees, payroll withholding will handle monthly tax obligations, while self-employed individuals or professionals will calculate taxable profit as gross receipts minus expenses wholly incurred to earn that income. Employee social insurance contributions will be deductible when determining personal taxable income, while employer social insurance payments are considered employer costs and do not reduce an individual’s taxable income.
Capital allowances under Egyptian law will apply on qualifying assets. Certain receipts of a pension or end-of-service payment will have full or partial exemption under the law. The Egyptian tax authority will require supporting documentation for large expenses, including electronic invoices or other proof. Individuals will need to keep accurate records of income and deductions to claim all eligible exemptions and ensure compliance with the law.
Tax Bracket Structure in Egypt:
Up to EGP 40,000: 0 percent
EGP 40,001 to EGP 55,000: 10 percent
EGP 55,001 to EGP 70,000: 15 percent
EGP 70,001 to EGP 200,000: 20 percent
EGP 200,001 to EGP 400,000: 22.5 percent
EGP 400,001 to EGP 1,200,000: 25 percent
Above EGP 1,200,000: 27.5 percent
In Egypt, a personal allowance of EGP 20,000 will apply on the income of resident taxpayers. A higher allowance will apply on the income of persons with disabilities under the law. The tax brackets and allowances will be part of the 2024 to 2025 reforms on personal income tax in Egypt. High-income taxpayers will face limits on benefiting from lower brackets. The availability of the 0 percent rate and other lower bands will depend on the total of taxable income and the specific exclusions defined by the law.
In Egypt, employers will withhold payroll tax on a monthly basis and remit it to the tax authority. Employers must submit withheld salary tax and related payments within 15 days of the month following the salary payment. This ensures that employees’ tax obligations are collected in advance and reduces the risk of penalties for late payment.
For nonresident payments, Egyptian withholding will apply on certain types of income. Dividends distributed by Egyptian companies will be subject to 10 percent for unlisted shares and 5 percent for EGX listed shares, while treaty rates may reduce these amounts.
Returns from certain investment funds received by individuals will have specific flat tax treatments, for example, a flat 5 percent under the amended rules. Interest, royalties, and service fees paid to nonresidents will generally be subject to 20 percent withholding unless a double tax treaty provides a lower rate. Withheld amounts will count as advance payments on the recipient’s final Egyptian personal income tax liability, and proper documentation such as a tax residency certificate will be required to benefit from treaty reductions.
The tax year in Egypt will align with the calendar year. Annual personal income tax returns and any balance due will normally be filed and paid by 31 March after the year’s end. Employers in Egypt will remit withheld payroll tax monthly and file annual payroll reconciliations to ensure accurate reporting. This process will cover all employees and reduce the risk of penalties for late payments.
Individuals in Egypt with non-payroll income from rental, business profits, or investments will also file returns and may need to make provisional payments during the year. Late filing or late payment will result in penalties and interest under Egyptian tax procedure rules. Recent reforms in Egypt will introduce settlement windows and cap limits on certain penalties when specific conditions are met.
Egypt’s personal tax system will provide targeted exemptions and simplified regimes to reduce the tax burden on eligible individuals. The standard personal allowance is EGP 20,000, and a higher allowance will apply to persons with disabilities under Egyptian law. Pensions and qualifying end-of-service payments will enjoy exemptions in specific cases on the basis of the law. These measures will help individuals retain more of the income they earn and provide relief on certain mandatory payments.
Egypt’s small enterprise regime will apply in 2025 to eligible businesses with a turnover up to EGP 20 million. Registered entities will pay tax on turnover at fixed low rates and will receive relief on some withholding and advance obligations. Access to these regimes in Egypt will require registration, meeting eligibility criteria, and continued compliance on electronic invoicing and reporting rules. These provisions will simplify compliance for small businesses and encourage formal registration in the economy.
Tax losses from a trade or professional activity in Egypt will be carried forward for up to five years to offset future taxable income. Carryforward of a loss will be denied if there is a change of ownership above specified thresholds or a material change in the activity. Capital losses will follow separate rules and may be used under specific Egyptian regulations to reduce tax on other gains.
Capital gains on EGX listed trades were replaced by a transaction stamp duty following the June 2025 government decision. Reported stamp duty rates will range from 0.10 percent to 0.115 percent on buy and sell operations. This change will apply to both resident and nonresident investors in Egypt. The final mechanics and the effective date will depend on executive regulations and official Gazette publication. Transitional rules will be issued by the Egyptian tax authority to guide compliance under the new system.
Scenario 1 — Salary Employee in Egypt
An employee in Egypt draws a gross annual salary of EGP 240,000. A personal allowance of EGP 20,000 offsets part of the taxable income. After deduction of employee social insurance contributions allowed under Egyptian law, the taxable income will be calculated on the applicable tax brackets. The portion of income above EGP 70,000 and the portion above EGP 200,000 will be taxed at their respective rates. Monthly payroll withholding will collect the estimated tax on the salary and an annual reconciliation will confirm the final tax liability.
Scenario 2 — Small Business under Egypt Small Enterprise Regime
A small professional service business in Egypt reports a turnover of EGP 3.2 million and will opt into the 2025 small enterprise regime. Under this regime, the business will pay tax based on a fixed percentage of turnover rather than on net profit. The business will benefit from simplified withholding, lower compliance requirements, and easier VAT obligations. To remain in the regime, the business will need to meet ongoing eligibility rules and submit all required filings in Egypt on time.
Egypt taxes residents on their worldwide income and nonresidents on income sourced in Egypt. Income up to EGP 40,000 will have a zero rate. Income above EGP 1,200,000 will be taxed at 27.5 percent. Every individual will receive a personal allowance of EGP 20,000. Annual returns and payments will be due by 31 March. Monthly payroll remittances will be required. Penalties and interest will apply on late filings. Egypt’s reforms now provide settlement windows under certain conditions. Reforms will reduce the burden on lower-income individuals and small enterprises. Next steps include reviewing payroll and accounting records in Egypt, determining residency, confirming eligibility for simplified regimes, and consulting a local Egyptian tax adviser to apply the rules accurately.
Q1: What is the top personal income tax rate in Egypt?
The top marginal rate will be 27.5 percent on the taxable income above EGP 1,200,000.
Q2: When must individuals file their personal tax returns in Egypt?
Annual personal returns and any balance due will be filed and paid by 31 March of the following tax year.
Q3: What withholding tax applies on Egyptian dividends?
Dividends of Egyptian companies will be withheld at 10 percent for unlisted shares and 5 percent for EGX listed shares.
Q4: How is tax residency determined in Egypt?
Residency in Egypt will be based on spending more than 183 days in a 12-month period or having a permanent home in the country.
Q5: What changed for capital gains taxation in Egypt for 2025?
Gains from trading Egyptian listed shares are replaced by a transaction stamp duty applied to both buy and sell operations at low fixed rates. The Egyptian tax authority has issued transitional rules to guide compliance under the new system.
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