Latest Amendments to Income Tax Law in Egypt Law No. 26/2020 – Income Tax
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Income tax in Egypt applies to any natural person – Egyptian or foreign – on their income from Egyptian sources, whether this income is salary, self-employment, rent collection or fees for services.
Based on this amendment, the first EGP 15,000 that the taxpayer earns annually in Egypt is exempt from tax. In addition, he will receive an amount of EGP 9,000 as a personal allowance.
There is also another advantage that has been added to this law, as there is a classification of income levels into six brackets, according to which one can determine the rate of tax that will be deducted. As shown in the following table:
Practical case :
For example, if an employee’s salary is EGP 30,000 per month, here is how to calculate their income tax.
EGP30,000 x 12 = EGP360,000
Based on his annual income, he will be in the first bracket, so the calculation will be as follows:
EGP 360,000 – EGP 9,000 (personal allowance) = EGP 351,000
According to the calculation above, the monthly tax deduction for this employee will be: 64,600 EGP/12 = 5,383.3 EGP.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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