New Tax Rates in Egypt – Outsource Your Payroll to Ensure Compliance

Effective from July 1, 2018, Egypt is amending the Article 8 of the Income Tax Law No. 91/2005. The newly enacted Law No. 97 of 2018, issued on June 23, 2018, introduces the below revised tax brackets and rates. Get in touch with Mercans Global Payroll Outsourcing team to ensure that your payroll processes and systems are compliant with the new regulations.

Annual Income (in EGP)

From

 

 

To

 

 

Tax Rate

 

 

Discount Rate

1 8,000 0% 0%
8,001 30,000 10% 85%
30,001 45,000 15% 45%
45,001 200,000 20% 7.5%
200,001 + 22.5% 0%

 

The tax discount is applied on the highest income bracket of the taxpayer. The tax due is calculated at the rate noted for each bracket, and the discount is then applied. Accordingly, the discount rate is 85% from the tax due for taxpayers whose income is within the second bracket, 45% for taxpayers whose income is in the third bracket and 7.5% for taxpayers whose income is in the fourth bracket. For taxpayers whose income is in the fifth bracket, no discount is provided.

The total annual net income should be rounded to the nearest 10 Egyptian pounds for the income tax calculation purposes.

The revised income tax rates and discounts are applicable on all taxable income; including on, income from wages, salaries, commercial, professional, noncommercial activities or revenues from real estate, of the natural persons. The amended rates will apply to all wages and salaries earned after July 1, 2018 and net profits of the tax year ending on December 31, 2018.