Egypt Investment Income Guide 2026

Overview — Investment Income Taxation in Egypt

Investment income in Egypt is primarily taxed through withholding at source, rather than through annual self-assessment. The payer of the income (company, bank, or financial institution) deducts the applicable withholding tax before distributing the income to the recipient. For resident individuals, these withholding taxes are generally final — the income is not aggregated with other income for progressive IIT purposes. For corporate recipients, withholding taxes are creditable against the corporate tax liability. Egypt's network of double taxation treaties may reduce withholding tax rates for non-resident investors.

Dividend Income — 10% Withholding Tax

Dividends distributed by Egyptian joint-stock companies are subject to a 10% withholding tax:

• The 10% rate applies to dividends paid to both resident and non-resident shareholders
• For resident individuals, the 10% WHT is a final tax — no further tax is due on dividend income
• For resident corporate shareholders, the 10% WHT is creditable against corporate tax liability (the net dividend income is included in taxable income at the 22.5% rate, and the 10% WHT is credited)
• Inter-corporate dividends within the same group may be exempt if certain conditions are met (substantial shareholding, holding period)
• Dividends distributed by companies operating in free zones are also subject to 10% WHT when distributed to shareholders outside the free zone

Egypt's 10% dividend WHT is moderate by international standards. Treaty rates may reduce the WHT to 5–8% for foreign institutional investors under applicable double taxation agreements.

Interest Income — 20% Withholding Tax

Interest income from bank deposits, bonds, and other debt instruments is subject to a 20% withholding tax:

• Bank deposits: 20% WHT on interest earned on savings accounts, certificates of deposit, and time deposits
• Corporate bonds: 20% WHT on interest payments to both resident and non-resident bondholders
• Government bonds: 15–20% WHT depending on the specific instrument (T-bills typically at 20%, certain development bonds at 15%)
• For resident individuals, the 20% WHT is generally a final tax
• For corporate recipients, the 20% WHT is creditable against corporate tax

The 20% rate on interest is higher than the 10% rate on dividends, reflecting a policy preference for equity investment over debt investment.

Bank Deposit Interest Exemption — Up to EGP 1,000

Interest income from bank deposits is subject to an annual exemption of up to EGP 1,000 per individual:

• Interest income of up to EGP 1,000 in a tax year is exempt from tax — no WHT is deducted
• For interest exceeding EGP 1,000, the full amount (including the first EGP 1,000) is subject to 20% WHT
• The exemption applies per individual, not per account
• Banks typically apply the WHT automatically and report the exempt portion to the ETA
• The EGP 1,000 threshold has not been adjusted for inflation in many years and now covers only a very small portion of interest income for most savers

Government Bonds and Treasury Bills

Interest from government securities is taxed as follows:

• Treasury bills (T-bills) and government bonds: 20% WHT on interest payments
• Certain infrastructure and development bonds: 15% WHT (reduced rate to encourage investment in infrastructure)
• Discount on T-bills (the difference between purchase price and face value) is treated as interest income subject to 20% WHT
• Sovereign Sukuk (Islamic bonds): same treatment as conventional bonds at 20% WHT
• Non-resident investors may benefit from reduced treaty rates on government bond interest

Mutual Funds — Special Tax Treatment

Mutual funds in Egypt benefit from a generally favourable tax regime:

• Distributions (dividends) from mutual funds: 0% tax — distributions to investors are not subject to withholding tax for certain types of funds
• Capital gains on redemption of fund units: 0% tax for investors redeeming their units in most funds
• Money market funds: Interest income earned by money market funds is exempt at the fund level and distributions to investors are not taxable
• Equity funds: Capital gains realised by the fund on listed shares are not taxed (consistent with the CGT suspension on listed shares)
• Bond funds: Interest income at the fund level is subject to the standard 20% WHT, but distributions to investors are generally not subject to further tax

The favourable tax treatment of mutual funds makes them a popular investment vehicle in Egypt for both retail and institutional investors. The 0% tax on certain fund distributions effectively provides tax deferral or exemption for fund investors.

Real Estate Investment Trusts (REITs)

Egypt introduced REIT-like structures in recent years. Rental income and capital gains generated by a REIT are generally exempt from tax at the entity level if the REIT distributes at least 90% of its income to unitholders. Unitholders are then taxed on distributions received (at 10% WHT for dividends). The REIT regime aims to encourage real estate investment through listed vehicles.

FAQs

Is there an exemption for small interest amounts?

Yes, the first EGP 1,000 of annual bank deposit interest is exempt. However, once total interest exceeds EGP 1,000, the entire amount becomes subject to the 20% WHT.

How are foreign-source dividends and interest taxed?

Foreign-source investment income received by Egyptian tax residents is subject to tax in Egypt. A foreign tax credit is available for withholding taxes paid abroad, limited to the Egyptian tax attributable to that income. Treaty provisions may also apply to reduce or eliminate Egyptian tax.

Do I need to declare dividend and interest income in my annual tax return?

For individuals, if the WHT has been applied correctly, dividend and interest income generally does not need to be declared separately — the WHT is a final tax. However, if you have foreign investment income or income not subject to WHT, you must declare it.

Are Islamic finance products taxed differently?

Islamic finance products (Murabaha, Sukuk, Mudaraba) are generally treated on an equivalent basis to conventional products. Profit distributions on Islamic investment accounts are treated similarly to interest income and subject to 20% WHT.

Disclaimer

This guide provides general information about Egyptian investment income taxation 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 situation. InvestmentKit does not provide tax advice.