CRS News Flash 21 November 2023 – EGYPT – Income Tax Amendments effective November 2023
NOVEMBER 2023 – EGYPT
AMENDED INCOME TAX LAW It is important that employers note the following:
Income tax amendments effective November 2023
In addition to the amendments through Law No. 30 of 2023, which was published in the official Gazette on 15 June 2023, the Egyptian Parliament has further amended the Income Tax Law through Law No. 175 of 2023, as published in the official Gazette dated 1 November 2023.
The law aims to alleviate the tax burden on low-income earners to achieve social justice in distributing the tax burden according to income levels.
Law No. 175 of 2023 raises the tax exemption limit to EGP 45,000 annually, divided into a personal exemption of EGP 15,000 without modification and a zero bracket of EGP 30,000 instead of EGP 21,000. It also removes the 2.5% tax bracket.
Under the newly approved amendments, any income exceeding EGP 45,000 (inclusive of the EGP 15,000 personal allowance) will be taxed progressively, with rates as follows, effective 1 November 2023:
The definition of a permanent establishment (PE) has also been amended to include non-resident companies operating in Egypt. As per the amended law, the following, among other things, will be considered a PE:
· Activities carried out in Egypt related to exploration, extraction and exploitation of natural resources for a period(s) exceeding 90 days during a year;
· Services, including consultancies, provided for a period(s) exceeding 90 days during the year;
· Insurance project affiliated with any country, in case premiums were collected in Egypt or insured risks were in Egypt;
· A person who works for an affiliated project; and
· If a person in Egypt undertakes work in Egypt on behalf of a project that exists outside Egypt or signs contracts on behalf of this project.
Please note that Law No. 30 of 2023 is not yet publicly available.
