Egypt Corporate Tax Guide 2026

Overview — Corporate Taxation in Egypt

Corporate income tax in Egypt is governed by Law No. 91 of 2005 (Income Tax Law) and administered by the Egyptian Tax Authority (ETA). Resident companies are taxed on worldwide income, while non-resident companies are taxed only on Egyptian-source income. A company is considered tax resident if it is incorporated in Egypt or has its place of effective management in Egypt. The tax year generally follows the calendar year, though companies may adopt a different fiscal year with ETA approval. Corporate tax returns must be filed within four months of the end of the fiscal year.

Egypt has implemented significant tax reforms under the investment law (Law No. 72/2017) to attract foreign direct investment, including rate reductions and incentives for strategic sectors.

Standard Corporate Tax Rate — 22.5%

The standard corporate income tax rate in Egypt is 22.5%, effective from 2024 onward as part of a phased reduction from 25%. Key features:

• The 22.5% rate applies to all resident companies and permanent establishments of foreign companies
• Banking and telecommunications sectors also pay the standard 22.5% rate
• No surtax or additional municipal taxes on corporate income
• Branch profits of foreign companies are subject to the same 22.5% rate
• No separate branch remittance tax

The rate reduction from 25% to 22.5% was part of broader investment law reforms aimed at improving Egypt's competitiveness as an investment destination in the MENA region.

Free Zone and Special Economic Zone Incentives

Companies operating in designated free zones (المناطق الحرة) and special economic zones may qualify for significant tax incentives:

• Public free zones: 0% corporate income tax — profits from activities within free zones are entirely exempt from Egyptian corporate tax
• Private free zones: 0% corporate tax on export-oriented activities
• Special Economic Zones (SEZs): Reduced rates negotiated on a project basis, often 10% or lower, with extended tax holidays
• Investment zones: 5–10% for specific activities approved by the General Authority for Investment (GAFI)

Free zone companies are generally restricted from selling into the Egyptian domestic market. Sales to the local market are subject to standard corporate tax rules and customs duties.

Oil and Gas Sector — 5–10% Rate

The oil and gas sector is subject to special tax provisions under production-sharing agreements (PSAs) with the Egyptian General Petroleum Corporation (EGPC). Corporate tax rates for oil and gas companies are determined on a contract-by-contract basis but generally range between 5% and 10% of the contractor's share of production. The exact rate depends on the terms negotiated in each PSA. The standard 22.5% rate does not apply to oil and gas activities — instead, the PSA rate prevails.

Transfer Pricing Rules — OECD Aligned Since 2021

Egypt introduced comprehensive transfer pricing regulations in 2021, aligned with OECD guidelines and BEPS Actions 8–10. Key requirements:

• All related-party transactions must be conducted at arm's length
• Transfer pricing documentation (master file, local file, country-by-country report) is required for groups meeting threshold tests
• The ETA may adjust prices and impose penalties for non-arm's-length pricing
• Advance pricing agreements (APAs) are available for taxpayers seeking certainty
• Specific guidance covers related-party loans, services, intangibles, and cost-sharing arrangements

Compliance with transfer pricing rules is a key focus of ETA tax audits. Penalties for transfer pricing adjustments range from 20% to 40% of the additional tax assessed.

Thin Capitalisation Rules — 4:1 D/E Ratio

Egypt's thin capitalisation rules limit interest deductibility based on a 4:1 debt-to-equity ratio. Interest on related-party debt exceeding this ratio is treated as a dividend for tax purposes and is not deductible. Key points:

• The 4:1 ratio applies to related-party debt (both domestic and cross-border)
• Interest on third-party (unrelated) debt is generally fully deductible
• Excess interest expense can be carried forward indefinitely
• Specific rules apply to financing from tax haven jurisdictions, which may be subject to additional scrutiny

Investment Incentives and Tax Credits

Egypt offers several tax incentives under Law No. 72/2017 (Investment Law):

• Investment tax credit: Up to 30% of investment costs for projects in priority sectors (manufacturing, renewable energy, technology, logistics)
• Tax holiday: 5–10 year exemption from corporate tax for projects in less-developed regions (Upper Egypt, Sinai, border areas)
• Customs exemptions: Exemption from customs duties and VAT on imported machinery and equipment for approved projects
• R&D incentives: Enhanced deductions for research and development expenditure

These incentives are administered by the General Authority for Investment and Free Zones (GAFI) and require project approval and compliance with specific conditions.

FAQs

What is the corporate tax rate for SMEs?

Small and medium enterprises with annual turnover below EGP 10 million may benefit from simplified tax regimes under Law 91/2005. A progressive rate scale applies, typically ranging from 10% to 20%, depending on turnover brackets. Very small businesses (turnover under EGP 500,000) may qualify for a presumptive tax regime.

Are dividends paid by an Egyptian company taxable?

Dividends paid by Egyptian joint-stock companies are generally subject to a 10% withholding tax (WHT) for both individual and corporate shareholders. However, inter-corporate dividends within the same group may be exempt under specific conditions.

What is the statute of limitations for corporate tax audits?

The ETA generally has 5 years from the end of the relevant tax year to conduct a tax audit and issue an assessment. This period extends to 6 years in cases of fraud or deliberate evasion.

Can losses be carried forward?

Tax losses can be carried forward for up to 5 years from the year the loss was incurred. Loss carryback is not permitted.

Disclaimer

This guide provides general information about Egyptian corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Egyptian tax advisor or the Egyptian Tax Authority (ETA) directly for advice specific to your business. InvestmentKit does not provide tax advice.