Law No. 91 of the year 2005 Law No. 91 of the year 2005 promulgating the Income Tax promulgating the Income Tax

LawLaw

Salaries And The LikeSalaries And The Like

Article : 9Article : 9

The tax shall apply to salaries and the like asThe tax shall apply to salaries and the like as follows:follows: 1 - All earnings due to the taxpayer resulting from 1 - All earnings due to the taxpayer resulting from

his/her work with third parties with or without a his/her work with third parties with or without a contract, periodically or non-periodically, whatever the contract, periodically or non-periodically, whatever the names, forms or reasons of those earnings, and names, forms or reasons of those earnings, and whether they are for works performed in Egypt or whether they are for works performed in Egypt or abroad and paid by a source in Egypt, including abroad and paid by a source in Egypt, including wages, remunerations, incentives, commissions, wages, remunerations, incentives, commissions, grants, overtimes, allowances, shares and portions in grants, overtimes, allowances, shares and portions in profits, as well as the monetary privileges and profits, as well as the monetary privileges and allowance in-kind of all types;allowance in-kind of all types;

2- Earnings due to the taxpayer from a 2- Earnings due to the taxpayer from a foreign source for works performed in Egypt;foreign source for works performed in Egypt;

3- Salaries and remunerations of chairmen 3- Salaries and remunerations of chairmen and members of the boards of directors in and members of the boards of directors in the public sector companies and the public the public sector companies and the public business sector companies, who are not business sector companies, who are not shareholders;shareholders;

4- Salaries and remunerations of chairmen, 4- Salaries and remunerations of chairmen, members and directors of the boards of members and directors of the boards of directors in the associations of capital in directors in the associations of capital in return for their administrative work;return for their administrative work;

The executive regulations of the present law shall determine the The executive regulations of the present law shall determine the

bases of estimating the value of the allowance in-kindbases of estimating the value of the allowance in-kind.. The company's cars subject to the personal disposal of The company's cars subject to the personal disposal of

the worker : the value of the benefit is specified at 20% of the worker : the value of the benefit is specified at 20% of the cost of fuel, insurance, and periodic maintenance the cost of fuel, insurance, and periodic maintenance with respect to such cars, whether owned by the with respect to such cars, whether owned by the company or leased. company or leased.

Mobiles are subject to tax at rate of 20% from the Mobiles are subject to tax at rate of 20% from the communication expenses. communication expenses.

Loans offered to employees are subject to tax, in case its Loans offered to employees are subject to tax, in case its amount exceeds 6 months' salary up to 7%. amount exceeds 6 months' salary up to 7%.

The employer share regarding employee life insurance The employer share regarding employee life insurance are subject to tax. are subject to tax.

The company's stocks granted at a value less than the The company's stocks granted at a value less than the stock market value:stock market value:

The value of the benefit is specified on the The value of the benefit is specified on the difference between the stock market value on difference between the stock market value on the date of receiving the grant, and the value the date of receiving the grant, and the value required to be paid by the worker. required to be paid by the worker.

In case of restrictions existence on transferring In case of restrictions existence on transferring the title, the benefit shall not be realized the title, the benefit shall not be realized provided that these restrictions are elapsed. provided that these restrictions are elapsed.

In all cases, the employer shall withhold and pay In all cases, the employer shall withhold and pay it according to article (14) of the law, and include it according to article (14) of the law, and include the annual reconciliation all the benefits received the annual reconciliation all the benefits received by each employee as per the preceding rules. by each employee as per the preceding rules. The party is committed to receive the revenue is The party is committed to receive the revenue is required to withhold the tax and pay it if he required to withhold the tax and pay it if he obliged to article (16) of the law. obliged to article (16) of the law.

Non Residents + Who work in other than work placesNon Residents + Who work in other than work places In exception to the provisions ofarticle-8 of the In exception to the provisions ofarticle-8 of the

present law, the tax shall apply to all the amounts present law, the tax shall apply to all the amounts paid to the non-residents whichever is the entity or paid to the non-residents whichever is the entity or organization employing them for performing organization employing them for performing services under its supervision. The tax shall also services under its supervision. The tax shall also apply to the amounts obtained by the residents from apply to the amounts obtained by the residents from other than their original work places at a rate of other than their original work places at a rate of (10%) without any reduction for facing the costs and (10%) without any reduction for facing the costs and without making any other deduction.without making any other deduction.

In all cases, the tax shall be held and delivered to the In all cases, the tax shall be held and delivered to the concerned Taxation Administration within the first concerned Taxation Administration within the first fifteen days of each month according to the rules fifteen days of each month according to the rules and procedures to be determined in theand procedures to be determined in the

The following shall not be taxableThe following shall not be taxable::

1- Pensions;1- Pensions; 2- Severance pay.2- Severance pay.

Exemptions + CostsExemptions + Costs

Subject to the other tax exemptions Subject to the other tax exemptions prescribed in special laws, the following prescribed in special laws, the following shall be exempted from the tax:shall be exempted from the tax:

1-An amount of 4,000 pounds, 1-An amount of 4,000 pounds, an annualan annual personal exemption for the taxpayer;personal exemption for the taxpayer;

2- Social insurance and other 2- Social insurance and other contributions to be deducted according contributions to be deducted according to the provisions of the social insurance to the provisions of the social insurance laws or any other alternative systems;laws or any other alternative systems;

3- Employees' contributions to the 3- Employees' contributions to the private insurance funds established private insurance funds established according to the provisions of the according to the provisions of the Private Insurance Funds Law as Private Insurance Funds Law as promulgated by law No.54 for the year promulgated by law No.54 for the year 1975;1975;

4- Premiums of Life and health 4- Premiums of Life and health insurance on the taxpayer in his favor insurance on the taxpayer in his favor or in favor of the spouse or minor or in favor of the spouse or minor children, and any insurance premiums children, and any insurance premiums for pension entitlement;for pension entitlement;

The following The following collective allowancecollective allowance in-kindin-kind::

a) Meals distributed to the workers;a) Meals distributed to the workers; b) Collective transportation of workers or b) Collective transportation of workers or

equivalent transportation cost;equivalent transportation cost; c) Health care;c) Health care; d) Tools and uniforms necessary for d) Tools and uniforms necessary for

performing the work;performing the work; e) Tenements provided by the employer e) Tenements provided by the employer

to the workers for performing their work;to the workers for performing their work;

7- All that is obtained by members of 7- All that is obtained by members of the diplomatic and consular corps, the the diplomatic and consular corps, the international organizations, and other international organizations, and other foreign diplomatic representatives foreign diplomatic representatives within the context of their official work, within the context of their official work, conditional upon reciprocity of conditional upon reciprocity of treatment and within the limits of that treatment and within the limits of that treatment.treatment.

With regard to items (3 and 4), it is With regard to items (3 and 4), it is stipulated that the total exemption stipulated that the total exemption accorded to the taxpayer shall not accorded to the taxpayer shall not exceedexceed

15% of the net income or15% of the net income or threethree thousand pounds, whichever is thousand pounds, whichever is

more, and the same contributions and more, and the same contributions and premiums shall not be re-exempted premiums shall not be re-exempted from any other income prescribed in from any other income prescribed in article-6 of the present law.article-6 of the present law.

The tax shall be payable on the excess of five thousand The tax shall be payable on the excess of five thousand pounds of the total net income realized by the resident pounds of the total net income realized by the resident

taxpayer taxpayer during the yearduring the year.. The tax rates shall be as follows:The tax rates shall be as follows: First bracket:First bracket: More than 5,000 pounds up to 20,000 pounds (10%)More than 5,000 pounds up to 20,000 pounds (10%) Second bracket:Second bracket: More than 20,000 pounds up to 40,000 pounds (15%)More than 20,000 pounds up to 40,000 pounds (15%) Third bracket:Third bracket: More than 40,000 pounds (20%)More than 40,000 pounds (20%)         The annual total net income shall be rounded, when The annual total net income shall be rounded, when

calculating the tax, up to the nearest less ten poundscalculating the tax, up to the nearest less ten pounds