Egyptian Income Tax Law No. 91 of 2005

المادة 1

In applying the provisions of this law, the following definitions apply: - Tax: the income tax - The Minister: Minister of Finance - Commissioner: Commissioner of the General Income Tax Authority - The Authority: the General Income Tax Authority - Taxpayer: natural or legal persons taxable according to the provisions of this law - Corporations: joint stock companies, companies limited by shares, and companies with limited liability - Partnerships: general partnerships and limited partnerships - De Facto Corporation: company established by natural persons without fulfilling the establishment or notarization procedures, except for cases resulting from the inheritance of a sole proprietorship - Project: an economic entity practicing its main activity in Egypt, or a permanent establishment in Egypt affiliated to an economic entity abroad. - Related Person: any person related to a taxpayer in a way that affects the determination of the tax base, including: 1- Husband, wife, descendents, and ascendants 2- A corporation and the person who directly or indirectly holds therein at least 50% of the number or value of shares, or voting rights 3- Partnerships, active partners, and silent partners 4- Any two or more companies in which another person holds at least 50% of the number or value of shares, or voting rights in each - Neutral price: the price upon which two or more unrelated persons deal, determined according to market forces and transaction conditions - Royalties: amounts paid, of any kind, in return for using, or the right to use, copyrights related to a literary, artistic, or scientific work, including cinema movies, and the use of any patent, trademark, design, model, plan, formula, or secret process, or in return for using or the right to use scientific, commercial, or industrial equipment, or information related to scientific, commercial, or industrial expertise

المادة 2

In applying the provisions of this law, a natural person is an Egyptian resident, in any of the following cases: 1- If having permanent residency in Egypt 2- If residing in Egypt for more than 183 continuous or intermittent days within twelve months 3- An Egyptian working abroad, and receiving income from an Egyptian treasury A legal person is deemed a resident of Egypt in any of the following cases: 1- If established according to Egyptian law 2- If its main or effective managing headquarters is in Egypt 3- If its a corporation in which the state or any state-owned legal person hold more than 50% of its capital This law's executive regulation will define the rules for determining permanent residence and effective managing headquarters.

المادة 3

Income earned from a source in Egypt includes the following: (a) Income from services rendered in Egypt, including salaries and the like. (b) Income paid by an employer residing in Egypt, even if the work is performed abroad. (c) Income earned by a sportsman, or an artist for activity performed in Egypt. (d) Income earned by a non-resident, for work undertaken through a permanent establishment in Egypt. (e) Income from the disposal of movable property of a permanent establishment in Egypt. (f) Income from the use and disposal of real estate and the like located in Egypt, and annexed property thereof. (g) Share distributions of a corporation resident in Egypt (h) Dividends paid by a partnership resident in Egypt. (i) Revenue paid by the government, local Authority Units, state-owned legal persons or any resident in Egypt, and revenue paid by a permanent establishment in Egypt even if the owner thereof is not residing therein. (j) Rent payments, licensing fees, and royalties paid by a person residing in Egypt or by a permanent establishment in Egypt even if the owner is not resident therein. (k) Income from any other activity carried out in Egypt.

المادة 4

A permanent establishment, in applying the provisions of this law, means each fixed business place through which some or all works of projects of a non-resident in Egypt is carried out. This particularly includes: (a) A place of management (b) A branch (c) A building used as a sales outlet (d) An office (e) A factory (f) A workshop (g) A mine, oil field, natural gas well, quarry, or any other place for extracting natural resources, including timber or any other product from forests (h) A farm or plantation (i) A building site, construction project, assembly, preparations, or supervisory activities related to any of these There shall be deemed as a permanent establishment a person working for an affiliated project who has the authority to conclude and ratify contracts in the name of the project, unless such person's activity is restricted to the procurement of commodities or goods for the project. The following are not deemed to be a permanent establishment: 1- Using special facilities only for the storage and display of goods and commodities owned by a project; 2- Maintaining an inventory of commodities and goods owned by a project for storage or display purposes; 3- Maintaining an inventory of commodities and goods owned by a project only for the purpose of reprocessing them by another project; 4- Maintaining a permanent place for an activity that only undertakes the purchase of goods or commodities or the gathering of information for a project; 5- Maintaining a permanent place for an activity that only undertakes work of a preparatory or supporting nature to a project; 6- Maintaining a permanent place of work in which any group of activities referred to in the aforementioned items is undertaken, provided that the overall activity of the fixed place of work, and the result of the activities, is only of a preparatory or supporting nature. 7- Industrial or commercial works carried out by a foreign company through a broker or a general agent on commission, or any other independent agent, unless it is proved that the broker or agent has dedicated most of its time or effort during the tax period for the interest of the foreign company. Control by a non-resident company over another resident company shall not mean that the resident company is a permanent establishment for the other.

المادة 5

A tax period is the fiscal year beginning the first of January and ending on 31st of December each year, or any period of twelve months which is used as a base for computation of the tax. Tax may be calculated for a period shorter or longer than twelve months. The executive regulation of this law shall determine the accounting procedures for such period. Tax becomes due on the day following the end of a tax period, and shall also become due on the death of a taxpayer, or cessation of a taxpayer's residency, or the permanent discontinuance of a taxpayer from practicing the activity.

المادة 6

An annual tax shall be imposed on the total net income of resident and non-resident natural persons in respect of their incomes earned in Egypt. The total net income comprises the following sources: 1- Salaries and the like; 2- Commercial or industrial activity; 3- Professional or non-commercial activity; 4- Real estate.

المادة 7

Tax is due on the total net income in excess of five thousand pounds earned by a resident taxpayer during the year.

المادة 8

The tax rates are as follows: First bracket: More than 5,000 up to 20,000 pounds 10% Second bracket: More than 20,000 up to 40,000 pounds 15% Third bracket: More than 40,000 pounds 20% On computing the tax, the total annual net income shall be rounded to the nearest lower ten pounds.

المادة 9

The tax applies to salaries and the like as follows: 1- All earnings by a taxpayer resulting from work for third parties, with or without a contract, on a regular or irregular basis, regardless of such dues names, forms or reasons, whether they are for works performed in Egypt or abroad, and the consideration thereof was paid from a source in Egypt, including wages, bonuses, incentives, commissions, grants, additional payments, allowances, dividends or shares in profits and cash and in-kind benefits of all types; 2- All earnings by a taxpayer from a foreign source for work performed in Egypt; 3- Salaries and remunerations of non-shareholding chairpersons and board members of public sector and public business sector companies; 4- Salaries and remunerations of chairpersons, board members and managers of corporations in return for their administrative work. The Executive Regulation of this law shall determine the basis for estimating the value of in-kind benefits.

المادة 10

Revenues included in the taxable base shall be determined for each part of a year in which any taxable revenue was earned in proportion to a year, based on the monthly revenue after transferring it to annual revenue. If a change occurs in the taxable base, the calculation of the base shall be adjusted from the date of change based on the new or old base, whichever is less, after transferring such to annual revenue. An adjustment must be made every year according to the procedures and rules specified by the Executive Regulation of this law. Block salaries, wages and the like paid in a single payment in a specific year must be apportioned among the years of entitlement, after excluding payments in lieu of vacations. Income included in the tax base must be recalculated for each year, and the tax due shall be adjusted accordingly.

المادة 11

As an exception to the provisions of article (8) herein, tax is imposed on all amounts paid to non-residents, regardless of the agency or body employing them, for undertaking services under its supervision. Tax is also imposed on amounts earned by residents from other than their original place of employment at a rate of (10%) without any reduction to cover costs, and without further deductions. In all cases, the tax shall be withheld and remitted to the competent tax office within the first fifteen days of every month, according to the rules and procedures specified in the Executive Regulation of this law.

المادة 12

Tax shall not apply on: 1- Pensions 2- Severance allowances

المادة 13

Without prejudice to other tax exemptions granted by special laws, the following are tax exempt: 1- An amount of 4000 pounds as the annual personal exemption for the taxpayer; 2- Social insurance contributions and other payments deducted according to the provisions of the social insurance laws or any alternative systems thereto; 3- Employees' subscriptions in private insurance funds established according to the provisions of the Private Insurance Funds Law, promulgated by law no. 54 of 1975. 4- Life and health insurance premiums for the taxpayer, or in favor of his wife or minor children; or any insurance premiums for pension entitlement. 5- The following collective in-kind benefits: (a) Meals offered to employees; (b) Collective transportation of employees or the equivalent cost; (c) Health care; (d) Tools and clothing necessary for performing the work. (e) Accommodation provided by an employer to employees for the performance of work. 6- Employees' dividends distributed according to the law. 7- Amounts received by members of the diplomatic and consular corps, international organizations and other foreign diplomatic representatives, in the scope of their official work, on condition and to the extent of reciprocity. For items (3) and (4), the total exemption for a taxpayer shall not exceed (15%) of the net revenue or three thousand pounds, whichever is greater. The same contributions and premiums (paid) from any other income stipulated in article (6) of this law may not be repeatedly exempted.

المادة 14

Employers and those required to pay taxable revenues, including companies and projects established under the free zones regime, shall withhold, from the amounts payable and stipulated in article (9) of this law, an amount on account of the due tax, according to the percentage determined by the Executive Regulation of this law. They shall remit to the competent tax office within the first fifteen days of each month the payments withheld in the previous month. Employers and those required to remit such revenue shall pay any tax differences due, without prejudice to their right to claim from the taxpayer what is owed.

المادة 15

The person responsible for withholding and remitting the tax according to article (14) of this law shall: 1- Submit, to the competent tax office, a quarterly return in January, April, July and October of each year, using the form developed for such purpose. 2- Provide the employee, at the employee's request, with a statement indicating full name, amount and type of income and amount of tax withheld. The Executive Regulation shall specify the rules and procedures for implementing the provisions of this article.

المادة 16

If an employer or a person required to pay taxable revenue is a non-resident of Egypt, or does not have a headquarters or an establishment therein, the obligation to remit the tax falls on the person entitled to such taxable revenue, according to the rules and procedures determined by the Executive Regulation of this law.

المادة 17

Profits from commercial and industrial activity shall be determined based on the revenue resulting from all commercial and industrial operations. This includes profits from the sale of a company's assets as stipulated in items (1), (2) and (4) of article (25) herein, profits realized from compensation received by a taxpayer because of depreciation or acquisition of any of such assets, as well as the liquidation proceeds realized during the tax period after allowing all deductible costs. Net profit is determined based on the income statement developed according to the Egyptian Accounting Standards. The tax base is determined by applying the provisions of this law to the net profit.

المادة 18

The tax accounting rules and the principles and procedures for collecting the tax on profits of small enterprises shall be issued by a Minister's decree. This shall not conflict with the provisions of The Small Enterprises Development Law promulgated by Law no. 141 of 2004, and shall be consistent with their nature and facilitate their tax treatment.

المادة 19

Tax shall apply to the profits of commercial and industrial activity, including: 1- Profits of commercial, industrial, mining, quarrying and petroleum establishments; 2- Profits of artisans and small businesses; 3- Profits realized from any commercial or industrial activity even if limited to one transaction. The Executive Regulation of this law shall indicate the rules of what is deemed to be a single transaction when applying the provisions of this clause. 4- Profits from a transaction or transactions carried out by brokers and agents on commission, and in general, all profit realized by any person who is engaged in the brokerage business to purchase, sell or lease real property or any kind of goods, services or movable assets. 5- Profits from the leasing of a commercial or industrial shop, whether the lease includes all or part of its tangible or intangible elements; as well as profits from leasing mechanical and electrical machinery, excluding farm tractors, irrigation machines and their accessories, and machinery and equipment used in agriculture. 6- Profits from all kinds of transportation activity. 7- Profits by those engaged in the construction or purchase of real property with the intention of selling them professionally, whether the profits result from selling the property as a whole or divided into apartments, rooms, administrative or commercial units or otherwise. 8- Profits from land parceling operations whether for sale or construction. 9- Profits from land reclamation or cultivation establishments, poultry farms or mechanical hatcheries projects, cattle and livestock farms of more than 20 head, and fish farms and fisheries projects.

المادة 20

Tax shall not apply to profits from the revaluation of the assets of a sole proprietorship when providing this as an in-kind share to the capital of a joint stock company, providing that the shares corresponding to the in-kind share are nominal, and shall not be disposed of within five years.

المادة 21

The taxable net income of an establishment is determined, for all long-term contracts it is engaged in, on the basis of what percentage of each contract is executed during the tax period. The percentage of the part of each contract that has been executed is determined on the basis of the actual cost of the works implemented until the end of the tax period prorated to the contract's total estimated cost. The calculated contract profit is determined by the difference between contract values and cost estimates. The contract's estimated profit for each tax period is determined by the percentage of the profit, estimated according to the previous paragraph, prorated to that executed during the tax period; provided that the contract profit is adjusted at the end of the tax period in which the contract was completed. Such profit shall be calculated on the actual revenues reduced by the actual costs after deducting the previously estimated profits. If the statement of the tax period in which the contract was completed denotes a loss, the loss shall be deducted from the profits of previous tax period(s) when the contract was implemented, providing that the deduction does not exceed the contract profit during the period. The tax must be re-calculated on this basis and the taxpayer shall recover the excess that had been paid. If the loss from the contract execution exceeds the limits referred to in the previous paragraph, the residual losses shall be carried forward to the following years, according to the provisions of article (29) herein. In applying the provisions of this article, a "long-term contract" means a manufacturing, preparation or construction contract, or performance of associated services thereof, carried out by an establishment for third parties based on a fixed value, and the implementation shall take more than one tax period.

المادة 22

The taxable commercial and industrial net profit is determined on the basis of the gross profit after deducting all costs and expenses needed to realize such profits. The deductible costs and expenses must be: 1- Related to the commercial or industrial activity of the firm and essential for carrying out the activity. 2- Real and supported by documents, except for costs and expenses which customarily have no supporting documents.

المادة 23

The following costs and expenses are deductible: 1- Interests on loans used in the activity, regardless of their value, after deducting the non-taxable or legally exempted credit interest. 2- Depreciation of the firm's assets, as stipulated in article (25) of this law. 3- Fees and taxes paid by the firm, except for the tax paid by the taxpayer according to this law. 4- Social insurance contributions by employers in favor of their employees and their own personal interest, which are paid to the National Authority for Social Insurance. 5- Amounts deducted annually by firms from their finances or profits for the account of the special saving or pension funds or others, whether these firms are established in accordance with the Private Insurance Funds Law no. 54 of 1975, or the Alternative Private Social Insurance Systems Law no. 64 of 1980, or according to a system that has its own special regulations or terms, provided that the amount deducted does not exceed (20%) of the total salaries and wages of their employees, and provided that the system has its own regulations or terms stipulating that the payments made by them under such a system serve as severance or pension, and that the funds of the system are separated or independent from the firm's funds and are invested for its own account. 6- Insurance premiums taken out by the taxpayer against his disability or death, or to provide for a sum of money or annuity, provided that the amount of the premium is not more than 3000 pounds per annum. 7- Donations to the government, Local Authority Units and other public legal entities, whatever their value. 8- Donations and subsidies to Egyptian non-governmental organizations and foundations registered in accordance with the provisions of their respective regulatory laws, as well as to educational institutions and

المادة 24

The following costs and expenses are not deductible: 1- Different types of reserves and allowances. 2- Fines, financial penalties and indemnities ruled against a taxpayer due to his or one of his affiliates' commission of an intentional felony or misdemeanor. 3- The income tax due according to this Law. 4- Interest paid on loans which exceed double the credit and discount rate declared by the Central Bank at the beginning of the calendar year in which the tax period ends. 5- Interest on loans and debts of different types paid to non-taxable or tax exempt natural persons.

المادة 25

Depreciation of a firm's assets are to be calculated as follows: 1- (5%) of the cost of procuring, constructing, developing, renovating or reconstructing any building, establishment, ships and aircrafts, for each tax period. 2- (10%) of the cost of procuring, developing, improving or renewing any of intangible assets purchased, including goodwill, for each tax period. 3- The following two categories of assets are to be depreciated according to the Depreciable Base System at the rates corresponding to each: (a) For computers, information systems, software and data storage equipment, 50% of the depreciable base for each tax year. (b) For all other assets, 25% of the depreciable base for each tax year. 4- No depreciation shall be calculated for land, works of art, monuments, jewelry and other assets which by nature are not depreciable.

المادة 26

In applying the provisions of Article (25) hereof, the depreciable base means the book value of the assets as included in the opening balance sheet for the tax period. This base shall increase insomuch as the cost of the assets used and the cost of development, improvement, renewal or reconstruction during the tax period. The base shall decrease insomuch as the annual depreciation amount, the value of the proceeds of selling the assets and the value of compensation received as a result of their loss or depreciation during the tax period. If the depreciation base is negative, the sale value of the asset or the damages thereof shall be added to the taxpayer's commercial and industrial profits. However, if the depreciation base does not exceed ten thousand Egyptian Pounds, the entire depreciation base shall be treated as a due deductible cost.

المادة 27

30% of the cost of the machinery and equipment used in production shall be deducted, whether they are new or used, at the beginning of each tax period during which such assets are used. The depreciation base stipulated in Article (25) thereof, shall be calculated for that period after the deduction of the said 30% amount. For the provisions of the two preceding paragraphs to apply, the taxpayer must maintain proper books and accounts.

المادة 28

Deduction of bad debts excluded by the taxpayer from the firm's books and accounts may be permitted if he presents a report by an accountant enrolled on the Accountants and Auditors Register indicating the fulfillment of the following requirements: 1- That the firm keeps proper accounting records. 2- That the debt is associated with the firm's business. 3- That the amount of the debt has been previously included in the firm's accounts. 4- That the firm has taken serious actions to recover the debt, but failed to collect it after 18 months of its due date. Serious actions to recover the debt include the following: a- Obtaining a writ for payment in cases where this is possible. b- Issue of a judgment by a court of first instance obliging the debtor to pay the amount of the debt. c- Claiming the amount of the debt during procedures of implementing a court judgment for the debtor's bankruptcy or concluding a conciliatory agreement preventive of bankruptcy. If the debt or part, is collected, the amount collected must be included in the firm's revenues in the year in which the collection took place.

المادة 29

If the final account of a year is closed in a loss, the loss shall be deducted from the succeeding year's profits. If, however, part of the loss remains, it shall be carried forward to the succeeding years up to the fifth, after which no loss can be carried forward.

المادة 30

If related persons have set conditions for their commercial or financial transactions other than those operative among non-related persons, either to reduce the tax base or to shift the tax burden from a taxable person to an exempt or non-taxable one, the Authority is entitled to determine the taxable profit on the basis of the neutral price. The Commissioner may conclude agreements with such related persons to follow one or more ways in determining the neutral price in their transactions. The Executive Regulation of this Law shall determine methods of calculating the neutral price.

المادة 31

Tax exempted: 1- Profits of land reclamation or cultivation enterprises, for ten years from the date of activity inception. 2- Poultry farming, apiculture, livestock husbandry and fattening, fisheries, fish farming enterprises and fishing boats enterprises profits, for a period of ten years from the date of activity inception. 3- Physical persons' income received from their investment in securities registered with the Egyptian Stock Exchange Market. Any losses resulting from these transactions cannot be deducted or carried forward to succeeding years. 4- Physical persons proceeds from: - Securities and financial deeds of different types, registered with the Egyptian Stock Exchange Market, whether issued by the State or shareholding companies. - Dividends from shares in joint stock companies and partnerships limited by shares. - Dividends from equity quotas in limited liability companies, partnerships, and partnerships limited by shares. - Dividends from investment securities issued by investment funds. 5- Interest which physical persons receive from their deposits and saving accounts in banks registered in the Arab Republic of Egypt; investment, saving and deposit certificates issued by said banks; deposits and saving accounts in post office funds and securities and deposit certificates issued by the Central Bank. 6- Profits from new projects set up by funding from the Social Fund for Development (SFD) to the extent of such funding for a period of five years from the date of starting the activity or starting production, as applicable. This exemption will only apply to those whose names were signed in the loans of the Fund.

المادة 32

The tax shall be imposed on: 1- Net revenues on self-employed professions and other non-commercial professions which the taxpayer practiced independently and of which the basic element is work, if they have resulted from the practice of the profession or activity in Egypt. 2- Revenue received by intellectual property rights' holders from selling or using their rights. 3- Any other revenues from any occupation or activity not stipulated in article 6 of this law.

المادة 33

Revenues included in the taxable base shall be determined annually on the basis of net revenues during the preceding year. The revenue of non-commercial professions includes proceeds from the disposal of any professional assets and those resulting from the transfer of expertise or from the assignment in full or in part of the office of the profession's practice or any receipts from the closure of the office. The determination of net revenues is those revenues from various operations according to the provisions of this law, after deducting all costs and expenses necessary for carrying out the profession, including asset depreciation in accordance with the simplified accounting principles issued by a decree from the Minister. The following costs are deductible: 1- Registration fees, annual subscriptions and profession's practice fees. 2- Taxes paid by the taxpayer for the practice of the profession, other than the tax paid in accordance with this Law. 3- Amounts paid by the taxpayer to his syndicate in accordance with its pension system. 4- Life and health insurance premiums paid by the taxpayer in his own favor or in favor of his wife and minor children. In the application of the provisions of items 3 and 4, the total amount exempted from the taxable revenue cannot exceed 3000 LE per annum. The same deductions cannot be applied to other income stipulated in article 6 of this law.

المادة 34

Donations to the Government, local Administrative Units, Public Legal Persons may be deducted from net revenues as stipulated in article 32 provided that the amount deducted does not exceed the net annual revenue. Also, donations and assistance granted to recognized Egyptian NGOs according to the provisions of their respective regulatory laws and to educational institutions and hospitals that are subject to the supervision of the government as well as Egyptian scientific research institutions, but not more than 10% of the annual net revenue. The same deductions cannot be applied to other income stipulated in article 6 of this law.

المادة 35

From the taxpayer's total revenue, all costs and expenses necessary to earn the revenue may be deducted based on the proper accounts supported with related documents, including costs and expenses which customarily have no supporting documents according to the Executive Regulation of this law; however, in case no proper accounts are maintained, the deduction will be limited to 10%. In applying the provisions of this Part, article 29 of this law will apply if the taxpayer was maintaining proper books.

المادة 36

The following shall be tax exempt: 1- Educational institutions, subject to the supervision of the government, public legal persons, Public Sector or State-Owned Enterprises (SOE). 2- Revenues of editing and translating books and religious, scientific, cultural and literary articles, except for proceeds from the sale of printed work or translation with a view to producing it in an audio or visual format. 3- Revenues received by teaching staff at universities and institutes for their books and teaching notes authored for distribution among students according to the regulations and prices set by the universities and institutes. 4- Revenues of members of the Formative Artists Syndicate pursuing the production of photography, sculpture and engraving artworks. 5- Revenues of self-employed professionals registered as members of their professional syndicates in their fields of specialization, but only for three years from the date of practice. They shall not be liable to tax until the beginning of the month following the lapse of the aforementioned exemption period, added to which is the training period required by the profession's practice law, public service period, military service or reserve service period if it is subsequent to the date the practice commenced. The period of exemption will be limited to one year for whoever practices the profession for the first time if fifteen years have elapsed since graduation. For the exemption to be valid, the taxpayer must practice the profession individually, without partnership with others, unless they are also tax-exempt.

المادة 37

Taxable revenues include the following: 1- Revenues from agricultural land. 2- Revenues from constructed real estate. 3- Revenues from furnished units.

المادة 38

1- Agricultural land revenue is determined as the rental value taken as a base for assessing the tax imposed according to law no. 113 of 1939 concerning agricultural land tax, after deducting 30% for all costs and expenses. 2- Revenues from horticultural crops from productive orchards are determined on areas exceeding three feddans, and from ornamental, medicinal and aromatic plants on an area exceeding one feddan, and nurseries, regardless of their crop areas, unless those nurseries are for the personal use of their owners, and based on a value equivalent to the rental value considered as a base for imposing the tax according to law No. 113 of 1939 above-cited, if the nursery owner is a tenant. If the nursery owner is the landlord himself, the revenues are determined on the basis of twice the rental value aforementioned. The taxable revenues stipulated in item (1) of this article shall not be included in the taxable base. The taxable bases are determined after deducting 20% of these revenues for all costs and expenses. The Minister shall, in consultation with the Minister of Agriculture, issue a decree specifying the age at which fruit trees are considered productive, together with a list of horticultural crops. The net taxable revenues are determined in the name of the landholder, whether he was the landowner or a tenant of the land. No other agreement or condition shall be binding to the tax authority. The taxpayer, his spouse and his minor children are considered one landholder in applying the provisions of item (2) of this article. Revenues shall be determined in his own name, unless ownership has been transferred to his wife or minor children from other than the husband or the father according to each case. The landholder, either as the landlord or a tenant, is obliged to submit data about the crop areas to the competent tax authority for each species of fruit trees grown, within thirty days from the date those trees were considered productive.

المادة 39

Revenues from constructed real estate are determined on the basis of the gross rental value considered as the base for the tax imposed by law no. 56 of 1954, after deducting 40% for all costs and expenses, in addition to the rental value of the private residence of the taxpayer and his family. Revenues from the right of usufruct report are treated the same as revenues from wholly owned property. The taxable revenue is determined on the actual rental value, reduced by 50% for all costs and expenses, for those revenues from the lease of real estate or part of it, according to the civil law provisions.

المادة 40

The taxpayer may request that the taxable income of real property, stipulated in article 38 and the first paragraph of article 39 of this law, be calculated on the basis of the actual revenue, provided that his application includes all his agricultural lands and constructed real estate. An application must be filed within the period set for the filing of annual returns, and the taxpayer must be maintaining proper books fulfilling the requirements stipulated in the Executive Regulation of this law.

المادة 41

The tax shall apply on revenues from renting any furnished unit or part thereof, whether it was intended for housing or for practicing a commercial or industrial activity or a non-commercial profession, or any other purpose. The taxable revenue is determined on the basis of the actual rental value, reduced by 50% for all costs and expenses.

المادة 42

A tax of 2.5% is imposed without any further reduction, on the gross revenues from the disposal of constructed real estate or lands within the cities' boundaries, whether the disposal commenced on the land parcel as it exists or after constructing buildings thereon, whether the disposal is inclusive of the entire real estate or part of it or a residential unit thereof or a unit for any other purpose, and whether the buildings were constructed on land owned by the taxpayer or by third parties. Exceptions to this tax on disposals are those disposals by an heir of the real estate transferred to him through inheritance, and also when the property is offered as an in-kind share in the capital of shareholding companies, on the condition that the equivalent shares shall not be disposed of for five years. Notary offices must notify the tax authority of the taxable notarized disposals, according to the provisions of this law, within thirty days from the date of notarization. In applying the provision of this article, a taxable action of disposal implies a gift to other than descendents or husbands and wives or ascendants, or a right of usufruct assigned for the real property, or renting it for a period is less than fifty years. Compulsory sales, whether administrative or judicial, and dispossession or appropriation for public interest or improvement are not considered taxable actions of disposal. Likewise treated are donations or grants to the government, local Authority Units, public legal persons, or projects of public benefit (utility).

المادة 43

The following are exempt from tax: 1- Revenues of agricultural activity except those stipulated herein. 2- Revenues of areas planted in desert lands for a period of ten years starting from the date the land is considered productive. The Minister shall, in agreement with the Minister of Agriculture, issue a decree specifying guidelines for the determination of the date on which land is considered productive.

المادة 44

Whoever owns one or more real estate or agricultural lands and whose total net revenues accrued from rental value, stipulated in clause 1 of article 38 and clause 1 of article 39 of this law, exceed the exempt bracket stipulated in article 7 thereof, is required to file a statement of the owned real estate and agricultural lands and their rental values to a competent real estates and agricultural lands tax collection office within the jurisdiction in which the real estates are located and on the form to be defined by the Executive Regulation of this law.

المادة 45

Amounts paid by the taxpayer for the real estate taxes imposed by law no. 113 of 1939 on agricultural lands tax and law no. 56 of 1954 on real estates tax, as applicable, shall be deducted from the tax due according to the provisions of Part Five of Book Two of this law, provided that the amount deducted does not exceed this tax.

المادة 46

The provisions of articles 38 and 39 of this law do not apply to agricultural lands and real estate included in the assets of an establishment or company.

المادة 47

An annual tax shall be levied on the net aggregate profits of legal persons whatever their objectives. Tax shall apply to: 1- Legal persons residing in Egypt, with respect to all profits whether realized in Egypt or abroad, with exception of the Agency of National Service Projects of the Ministry of Defense. 2- Non-resident legal persons, with respect to the profits through a permanent establishment in Egypt.

المادة 48

In applying the provisions of Article 47, the following are treated as legal persons: 1- Capital associations and partnerships whatever the law they are subject to, as well as corporations de facto. 2- Cooperatives and their unions, taking into consideration exemptions stipulated by law. 3- Public authorities and other public legal persons in relation to activity exercised by them that is subject to tax, without prejudice to exemptions provided in the laws establishing them. 4- Banks, companies and foreign firms even if their head offices are based abroad and their branches are in Egypt. 5- Units established by the local Authority with respect to their activity that is subject to tax.

المادة 49

The tax base is rounded to nearest lower ten pounds and it shall be subject to tax at the rate of 20% of the net annual profits. With exception to the rate mentioned in the preceding paragraph, the profits of Suez Canal Authority, the Egyptian General Petroleum Corporation and the Central Bank are subject to tax at the rate of 40%, and the profits of oil and gas exploration and production companies are subject to tax at the rate of 40.55%.

المادة 50

The following are exempt from tax: 1- Ministries and government bodies. 2- Educational establishments subject to the supervision of the State, and which are basically not-for-profit entities. 3- Non-governmental organizations and institutions established under the provisions of the Non-governmental Organizations and Institutions law promulgated by law no. 84 of 2002, within the limits of the purpose for which they were established. 4- Non-profit making bodies that carry out activities of a social, scientific, sports or cultural nature as long as those activities are not of a commercial, industrial or professional nature. 5- Profits of private insurance funds subject to the provisions of law no. 54 of 1975. 6- International organizations, technical cooperation bodies and their representatives, for which international agreements provide their exemption from tax. 7- Profits and dividends of investment funds established according to the Capital Market Law promulgated by law no. 95 of 1992 and the revenue of bonds registered in the official schedules at the stock exchange. 8- Returns received by resident legal persons for their investments in securities registered on the Egyptian stock exchange market with the loss resulting from such transactions not to be deducted or carried over to subsequent years. 9- Returns received by legal persons on securities issued by the Central Bank of Egypt or revenues from transactions involving them; with an exception from provision of Article 56 of this law. 10- Dividends, profits and shares, which resident legal persons receive for their participation in other resident legal persons. 11- Profits of land reclamation and cultivation companies for a period of ten years from the date of starting the business or of starting production as applicable according to the rules to be determined by the Executive Regulation of this law. 12- Profits of companies engaged in poultry production, bee breeding, cattle breeding and fattening pens and the companies of fisheries and fish farms for a period of ten years from the date of exercising the activity.