• The following shall be exempted from the salary tax:

According to Article No.(12) from the executive decree specifying the amount that should be disregarded from the taxable amount as follows:

1. The amount is not subject to tax issued by special Laws.
2. An amount of 4000 L .E, an annual personal exemption for the tax payer.
3. Social Insurance and other contributions to be deducted according to the provisions of the social insurance laws or any alternative systems.
4. Employee’s contributions to private insurance funds established according to provisions of the private insurance funds laws as promulgated by Law No.(54) for the year 1975.
5. Premiums of life and health insurance on the taxpayer in his favour or in favour of the spouse or minor children and any premiums for pension entitlement.
6. The following collective allowance in-kind.
• Meals distributed to workers
• Collective transportation of workers or equivalent transportation cost
• Health care
• Tools and uniforms necessary for performing the work
• Tenements provided by the employer to workers for performing their work
7. The employee's profit share determined to be distributed according to the law no.159 year 1981
8. The stamp tax legally prescribed.
9. An amount of 5000 L.E, are exempted annually from salary tax.

• Definition of the allowance in-kind and in-cash:

Article No.(11) from the executive decree describes the cash and in-kind allowances mentioned in Law(91)/2005 as follows:

All earnings due to the taxpayer either in cash or in-kind, are subject to tax. They are determined on the following basis:

1. The company's cars subject to the personal disposal of the worker : the value of the benefit is specified at 20% of the cost of fuel, insurance, and periodic maintenance with respect to such cars, whether owned by the company or leased.
2. Mobiles are subject to tax at rate of 20% from the communication expenses.
3. Loans offered to employees are subject to tax, in case its amount exceeds 6 months' salary up to 7%.
4. The employer share regarding employee life insurance are subject to tax.
5. The company's stocks granted at a value less than the stock market value:


• The value of the benefit is specified on the difference between the stock market value on the date of receiving the grant, and the value required to be paid by the worker.
• In case of restrictions existence on transferring the title, the benefit shall not be realized provided that these restrictions are elapsed.
• In all cases, the employer shall withhold and pay it according to article (14) of the law, and include the annual reconciliation all the benefits received by each employee as per the preceding rules. The party is committed to receive the revenue is required to withhold the tax and pay it if he obliged to article (16) of the law.

A. The following are not deductible costs:

1. Debit interest paid by legal persons stipulated in Article 47 hereof on loans and advances they have obtained and that are more than four fold the average of equity rights according to the financial statements prepared according to the Egyptian accounting standards.
2. The company equity is calculated as follows:
   Equity of 1st January + Year end Equity ÷ 2.
3. The loan average is calculated as follows:
   Loan Average at 1st January + Year end Loan ÷ 2.

B. Provisions formed are not considered as cost except the following:

• 80% of the loan appropriations which the banks are committed to form.
• Amount paid to the shareholders for attending the G.A.M.
• Allowances obtained by the chairman and members of the Board of Directors.
• Workers' profit share to be distributed according to the laws.

C. Changing the Legal Form:

1. The capital profit or loss resulting from the revaluation shall not be included in the profit and loss account, In condition:
   The assets and liabilities are booked with their book value at the time of changing the legal form.
2. The company should keep records for the historical assets before changing the legal entity.
3. The tax application on the revaluation results are as follows:

• Should the Assets be sold, the capital gain resulted shall be subject to tax. The amounts calculated are the difference between the historical and sold value.
• The company should depreciate the assets according to the historical value before changing the legal entity.
• Any change in the provisions or reserves after the revaluation, the different (increase) shall be subject to tax.

D. Profit generated abroad:

The foreign tax paid by a resident company on its profits was realised abroad shall be credited from the tax due according to the provisions of this law, provided that the relevant supporting documents are presented.

profit realised abroad which is subject to the system of deducting foreign tax from the tax on income in Egypt means transaction profits, branches, dividends, yields from dealing in a transaction in securities obtained from a resident firm against its investments in firms abroad, royalties, rents and interests earned from loans granted abroad.

Tax paid abroad can be deducted on the following conditions:

• The firm should provide the supporting documents showing payment of the foreign tax to its account.
• The taxes paid do not exceed the tax due to be paid in Egypt.
• The taxes paid do not exceed the tax required on the revenues.
• Losses generated abroad are not considered as tax deductible in Egypt.

F. Services rendered abroad and not considered as cost:

1.Freight

• Transportation
• Shipping
• Insurance
• Training
• Participating in exhibitions and conferences
• Registration fees in the world stock exchange markets
• Direct advertising and promotion

2.The share of the administrative, control and supervision expenses sustained the head office to the permanent establishment's carries on activity in Egypt is not considered as a service charge.

At the time of determining the permanent establishment's profits, the authorized amount of the control and supervision expense borne by the head office abroad should not exceed 7% of the firm's taxable base, provided that those charged expenses within the limit of this percentage do not include any royalties or returns or commissions or direct salaries, provided that a certificate from the head office's external auditor to be signed and notarized to be filed.

G. Tax Return:

Companies should deliver the tax return before May 1st each year, or during the four months that follow the year end.

The return shall be authorised by a CPA in order to indicate the company net profit / loss subject to tax, and  prepared according to the tax law specifications.

The company can request to delay the filing of tax return. A request should be filed at the tax authority 15 days before the deadline .

H. If the Tax Authority has documents that prove a difference between the tax return and the actual facts, it must notify the taxpayer and perform a tax audit, correct the tax return or modify it and determine the taxable revenue.

I. Re-inspection:

The Authority can not re-inspect the accounts unless substantial facts are revealed which demonstrate the need for re-inspection.

J. Long Term Contracts:

The taxable net income of an establishment is determined, for all long-term contracts it is engaged in, on the basis of what percentage of each contract is executed during the tax period. The percentage of the part of each contract that has been executed is determined on the basis of the actual cost of the works implemented until the end of the tax period prorated to the contract's total estimated cost.

The calculated contract profit is determined by the difference between contract values and cost estimates.

The contract's estimated profit during each tax period is determined by the percentage of the profit, estimated according to the previous paragraph, prorated to that executed during the tax period; provided that the contract profit is adjusted at the end of the tax period in which the contract was completed. Such profit shall be calculated on the actual revenues reduced by the actual costs after deducting the previously estimated profits.

K. The Taxable amount:

• Costs and expenses that are not customarily supported by documents means those costs and expenses that are not customarily supported by external documents according to their nature, but internal payment orders or pricelists are available, Such as:
1. Domestic transportation expenses.
2. The cafeteria expenses for the internal hospitality for the firm's clients.
3. Cleaning expenses.
4. Ordinary and syndicate stamps necessary for the firm's operations workflow.
5. Ordinary maintenance expenses.
6. Daily, weekly, or monthly newspapers or magazines, if it is required by the nature of the profession or the activity.

It is provided that expenses that are not customarily supported by documents, including tips, cannot exceed 7% of the total general and administrative expenses supported by documents.

• Interests on loans used in the activity, regardless of their value, after deducting the non-taxable or legally exempted credit interest.

L. Depreciation:

1. Depreciation of the firm's assets should be calculated according to article 25 of the income tax law.
2. 30% of the cost of the employed machinery and equipment used in investment in the field production shall be deducted, whether they are new or used, at the beginning of each tax period during which such assets are used.