Egypt is imposing a 5% tax increase (from 25% to 30%) for individuals earning over EGP 1,000,000 annually, effective from tax year 2014 for a 3-year period.
Recently, Egypt's government approved a temporary 5-percent tax on wealthy individuals intended to help fund the country’s social programs, but more immediately to help address the country’s deficit problem.1
This tax rise potentially affects high-income earning employees on assignment in Egypt and those Egyptian assignees overseas who are subject to taxation in Egypt. This could raise the costs related to such assignees and impact tax equalizations.
In addition, if budgeting for assignments to/from Egypt, when considering employees for such assignments that are high-income earners, budget projections may need to take into account this new temporary tax increase.
The tax increase from 25 percent to 30 percent is effective from tax year 2014 for a 3-year period and applies to those earning over one million Egyptian pounds (app. $142,200) a year.
Law 44 for 2014 amending Income Tax Law 91 for 2005, which was published in the Official Gazette (Al Gareedah Al Rasmeyah) on 4 June 2014, ushered in this tax increase.
Until this change, individuals earning above EGP 250,000 a year were taxed at a rate of 25 percent. Now that rate is capped at EGP 1,000,000 and those earning over EGP 1,000,000 are taxed at a 30-percent rate.
The table below illustrates the new tax schedule.
|Annual taxable income
[EGP 1 = EUR 0.1043 | EGP 1 = USD 0.14 | EGP 1 = GBP 0.0826]
The information contained in this newsletter was submitted by the KPMG International member firm in Egypt.
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