Income Tax Law: Egypt Introduced New Amendments to this Law in 2024
In February 2024, the Egyptian Government gave its approval to issue Law No. 7 of 2024 regarding the amendment of certain provisions of Article No. 8 and Article No. 13 of the Income Tax Law promulgated by Law No. 91 of 2005 concerning the tax on salaries.
Who did the Changes Apply to?
These changes applied to employees and those involved in various sectors, such as commerce, real estate, intellectual activities, and non-commercial endeavors.
When did the Changes Take effect?
These amendments to the Income Tax Law came into effect on the 1st of March 2024. For business activities, occupations, and real estate revenues, the new rule will apply from the tax period ending after the publication of the Act.
The Purpose of the Amendments to the Income Tax Law
These amendments seek to establish an integral system to restructure Income Tax in Egypt with the aim of preserving social justice, supporting investments, enhancing digital transformation and the electronic tax system, and expanding the number of individuals benefiting from tax exemptions.
Key Amendments Introduced by the Amending Law
Article no. 8
The new regulation has increased the lower tax brackets for the tax year 2024 as follows:
Tax Rate (%) | Not Exceeding EGP 600,000 | Between EGP 600,000 and 700,000 | Between EGP 700,000 and 800,000 | Between EGP 800,000 and 900,000 | Between EGP 900,000 and 1,200,000 | Exceeding EGP 1,200,000 |
0 | 1 to 40,000 | – | – | – | – | – |
10 | Exceeding 40,000 to 55,000 | 1 to 55,000 | – | – | – | – |
15 | Exceeding 55,000 to 70,000 | Exceeding 55,000 to 70,000 | 1 to 70,000 | – | – | – |
20 | Exceeding 70,000 to 200,000 | Exceeding 70,000 to 200,000 | Exceeding 70,000 to 200,000 | 1 to 200,000 | – | – |
22.5 | Exceeding 200,000 to 400,000 | Exceeding 200,000 to 400,000 | Exceeding 200,000 to 400,000 | Exceeding 200,000 to 400,000 | 1 to 400,000 | – |
25 | Exceeding 400,000 | Exceeding 400,000 | Exceeding 400,000 | Exceeding 400,000 | Exceeding 400,000 | 1 to 1,200,000 |
27.5 | – | – | – | – | – | Exceeding 1,200,000 |
Note:
- The 0% tax bracket for annual income has been raised from EGP 30,000 to EGP 40,000, with an increase of EGP 10,000 compared to the previous year.
Taxpayers with a higher net taxable income are not allowed to avail of the lower tax brackets:
- The annual net income tax, ranging between 600 000.00 and 700 000.00, is not eligible for the 0% tax bracket.
- The annual net income tax, ranging between 700 000.00 to 800 000.00, is not eligible for the 0% and 10% tax brackets.
- The annual net income tax, ranging between 800 000.00 and 900 000.00, is not eligible for the 0%, 10%, and 15% tax brackets.
- The annual net income tax, ranging between 900 000.00 and 1, 200 000.00, is not eligible for the 0%, 10%, 15%, and 20% tax brackets.
- The annual net income tax, above 1, 200 000.00, is not eligible for the 0%, 10%, 15%, 20%, and 22.50% tax brackets.
Article no. 13
The annual personal exemption for the individual and disabled individual taxpayer has increased as follows:
Taxpayer Category | Year 2023 (in EGP) | Year 2024 (in EGP) |
Other than disabled | 15,000 EGP | 20,000 EGP |
Disabled | 22,500 EGP | 30,000 EGP |
Explanation:
- The annual personal exemption limit has been changed from EGP 15,000 to EGP 20,000.
- The annual personal exemption limit for a person with disability or caregiver for a person with a disability has been amended to 1.5 times the annual personal exemption. Hence, the limit of annual personal exemption in this case would be EGP 30,000.
How These Amendments Positively Affect the Individuals & the Economy?
For individuals, these amendments aimed at relieving the tax burden on low and middle-income earners. By adjusting tax brackets and rates, the revised income tax law ensures a fairer distribution of the tax burden. This provides relief to individuals, allowing them to retain a larger portion of their hard-earned income. Increased disposable income will have a positive ripple effect on individuals’ quality of life, leading to improved consumer spending and a boost to the overall economy.
In addition to the direct benefits for individuals, the amendments to the income tax law also impact Egypt’s economy as a whole. By reducing the tax burden on individuals, the revised law stimulates consumer spending, which drives demand and supports businesses across various sectors. Increased consumer spending can lead to more job opportunities as businesses expand to meet rising demand, ultimately contributing to economic growth and reducing unemployment rates.
And now you know everything you need to know about the Amendments made to the income tax law in Egypt in 2024. For more information about these amendments, click here.
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