Tax on legal persons in Egyptian Tax Law No. 91 of 2005

Corporate Income Tax in Egypt’s Law No. 91 of 2005

Introduction

In Egypt’s modern business landscape, corporate income tax—applied to legal entities such as companies and institutions—has become a cornerstone for achieving tax fairness and supporting the national economy. Law No. 91 of 2005 marked a turning point in regulating the relationship between the state and the private sector, providing a clear and transparent framework for tax calculation, with a focus on encouraging investment and simplifying compliance. Whether you manage a company or are considering establishing a business entity in Egypt, this article highlights the key practical and legal aspects of corporate tax, along with marketing tips to help boost your compliance and competitiveness.

What Are Legal Entities?

Legal entities include organizations such as joint-stock companies, limited liability companies, partnerships, and both public and private institutions that conduct economic activities in Egypt or through a permanent establishment in the country. The net profits of these entities are subject to tax, regardless of their founding purpose or the nature of their activities.

Legal Basis for Taxation

Income Tax Law No. 91 of 2005is the primary reference governing corporate taxation in. Egypt

. The tax applies to annual net profits generated from all commercial, industrial, service, and investment activities.

. This includes profits from both local and international operations, provided the management or activity center is in Egypt.

Corporate Tax Rate

. Standard Rate: 22.5% of the annual net profits subject to tax for most companies and legal entities.

. Exceptions:

• Certain sectors, such as the Suez Canal Authority, the Central Bank, and petroleum companies, are subject to different rates according to special agreements

. Non-resident companies: Tax applies only to profits generated through a permanent establishment in Egypt.

1Determine total annual revenuesfrom all activities

2-Deduct legally allowed operating expenses and costssuch as salaries, rent, depreciation, and financing costs, excluding non-deductible items like fines.

3- Calculate the taxable net profitafter deducting expenses and exemptions

4- Apply the tax rate(22.5%) to the net profit.

Pay the tax electronicallyvia the Egyptian Tax Authority’s online portal

* In recent years, a series of amendments have aimed to support small and medium-sized enterprises, introducing simplified tax filing systems and reduced rates for companies with lower revenues (ranging from 0.4% to 1.5% of annual revenues for companies with sales not exceeding 20 million EGP, according to new 2025 laws).

* There is a grace period for voluntary registration of unregistered companies, with exemptions from penalties and interest if compliance occurs within the specified timeframe.

* Strengthening trust with clients and investors: Tax compliance reflects the credibility of the company and attracts both local and international partners.

* Avoiding penalties and sanctions:Delays or evasion can lead to penalties of up to 100% of the tax due.

* Accessing government incentives: Compliant companies benefit from support programs and tax exemptions.

* Supporting the national economy: By contributing effectively to funding public services and infrastructure.

* Maintain accurate and up-to-date financial records to facilitate tax audits.

* Consult a certified tax advisor to ensure proper application of the law.

* Stay updated on legal amendments via the official website of the Egyptian Tax Authority to ensure ongoing compliance.

Corporate income tax in Egypt is not just a legal obligation—it is an essential part of any company’s growth and sustainability strategy. With clear laws and advanced digital systems, tax compliance has become easier and more transparent, giving companies a more competitive and investment-friendly business environment. If you manage a company or are planning to enter the Egyptian market, make tax compliance a core pillar of your strategy to ensure success and continuity.