Egypt Income Tax Deductions: A Guide for Foreign Investors (2025)

1. Corporate Income Tax (CIT) Deductions:

• General Business Expenses:
  • Ordinary and necessary business expenses are generally deductible. This includes:
  • Salaries and wages
  • Rent and utilities
  • Office supplies
  • Marketing and advertising costs
  • Travel expenses (within reasonable limits)
  • It is vital to keep detailed records with proper documentation.
• Depreciation of Assets:
  • Depreciation of tangible and intangible assets is deductible.
  • The Egyptian Tax Authority (ETA) sets depreciation rates and methods. It is very important to see the current rules from the ETA.
  • Maintain detailed records of asset acquisition and depreciation calculations.
• Interest Expenses:
  • Interest expenses on business loans are generally deductible, subject to certain limitations.
  • Thin capitalization rules may apply, limiting the deductibility of interest paid to related parties.
  • It is very important to keep all loan agreements.
• Bad Debts:
  • Bad debts can be deducted if they are proven to be irrecoverable.
  • Adequate documentation is required to support the claim.
  • Research and Development (R&D) Expenses:
  • R&D expenses may be deductible, particularly if they contribute to the Egyptian economy.
  • It is very important to follow the Egyptian Tax Authority guidance on this matter.
• Social Insurance Contributions:
  • Employers contributions to social insurance are deductible.
  • Donations to Approved Charitable Organizations:
  • Donations to approved charitable organizations within Egypt may be deductible.

2. Individual Income Tax (PIT) Deductions:

• Personal Allowance:
  • A basic personal allowance is typically granted to all taxpayers.
  • The amount of this allowance is subject to change, and therefore it is very important to see the current rules from the ETA.
  • Social Insurance Contributions:
  • Mandatory social insurance contributions are deductible.
• Specific Expenses:
  • Certain expenses, such as medical expenses or educational expenses, may be deductible under specific conditions.
  • It is very important to see the current rules from the ETA.
  • Donations to Approved Charitable Organizations:
  • Donations to approved charitable organizations within Egypt may be deductible.

Important Considerations for Foreign Investors:

• Documentation:
  • Maintain accurate and complete records of all expenses.
  • Documentation is essential to support your deductions.
• Compliance with ETA Regulations:
  • Stay updated on the latest regulations and guidelines issued by the ETA.
• Tax Treaties:
  • Familiarize yourself with the relevant double taxation treaty between Egypt and your home country.
• Professional Advice:
  • Seek professional tax advice from experts in Egypt to ensure compliance and maximize your deductions.
• Egyptian Tax Authority (ETA) Guidelines:
  • It is very important to keep up to date with the guidelines published by the ETA.