Emerging Markets Rates and Currencies Handbook

Tax Summary – Egypt Egypt Country Tax Deductibility and Considerations Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equities W/H Tax • Loans above 3 year maturity – No WHT • Loans below 3 year maturity – 20% WHT • Under certain tax treaties reduction below 20% possible on country-by-country basis • No WHT • N/A • 10% WHT on dividends paid to non-resident/ resident shareholders from shares unlisted on the Egyptian stock exchange. • 5% WHT on dividends paid to non-resident/ resident shareholders from shares listed on the Egyptian stock exchange. • WHT rates mentioned above on dividends paid to non-resident shareholders could be reduced under certain tax treaties. Deductibility of interests • Deductible, provided certain conditions are met: • • Interest rate not exceeding 2x discount rate determined by CB of Egypt at the start of year • • Thin Capitalization rule is followed at a debt to equity ratio of 4:1 is • • Transfer pricing, i.e. arms length rule is being followed • • The loan is business related • N/A • N/A Deductibility of (FX) Losses • Unrealized FX losses should not be treated as deductible cost in the annual corporate income tax and should be added to the taxable amount. • Realized FX losses are accepted and should be treated as deductible cost in the annual Corporate income tax. • Unrealized FX losses should not be treated as deductible cost in the annual corporate income tax and should be added to the taxable amount. • Realized FX losses are accepted and should be treated as deductible cost in the annual Corporate income tax. Other Taxes/Duties • If loan received from parent or holding company, it is not subject to VAT • If loan received from inter- company (affiliate), sister company (i.e. any other company which is not a direct • N/A • N/A • N/A • N/A