Taxes in Egypt
What taxes and for which companies they are valid in Egypt, tax legislation, tax reporting in Egypt of operating companies
Tax legislation in Egypt provides for the payment of tax on company income. If your company is not a military industry facility in Egypt, is not a government facility or a cinematographic facility, then for most types of businesses this tax is 22.5% of the company’s net income minus expenses.
Company expenses include:
- Expenses for maintaining and renting premises for work;
- Utility bills;
- Expenses for external services of other specialists;
- Expenses for the maintenance and service of vehicles, gasoline;
- Production costs;
- Expenses for the provision of services;
- Depreciation expenses for equipment;
- Representation expenses;
- Advertising expenses;
- Salaries of employees.
Many more different expenses can be added to this list, a competent accountant knows how to properly prepare reports with expenses in order to correctly calculate income tax.
A separate article is Value Added Tax (VAT) – 14%. It arises for any type of delivery of goods, their resale and must be taken into account in any invoice of the company as an added value to the total price of the goods. If you are a manufacturer of goods and sell goods on the domestic or foreign market, then such a tax is necessarily present on the sale.
If you are an intermediary between the manufacturer and the consumer, then if you have already paid a tax of 14% when buying goods for resale, then you do not pay this tax, while reporting on the original invoices, which must indicate VAT (VAT) manufacturer. In this case, you only pay tax on the net profit between the cost of purchasing the goods and the cost of selling them.
VAT (VAT) in Egypt for the resale of goods or their production does not arise immediately, but as a result of the total value of contracts of counterparties in the amount of 500,000 Egyptian pounds since the start of the company. If this condition occurs, the company registers VAT and receives a special VAT tax card. From now on, this company works only with VAT-tax on products.