Filing Salary Tax Declarations in Egypt: Key Rules and Provisions

In Egypt, filing salary tax declarations and their equivalents is a critical responsibility for employers and other entities obligated to pay taxable income. These declarations must be submitted through the Egyptian Tax Authority’s electronic portal or any other authorized electronic channel designated by the Ministry of Finance. Taxpayers are required to register on these platforms and obtain a secure password, taking full responsibility for the accuracy of the information they submit.

Proof of Payment and Compliance

Taxpayers must provide proof of tax payment based on their declarations using one of the legally approved payment methods within the prescribed deadlines. Payments made through non-cash means are considered valid payments to the tax authority. Failure to withhold and remit the salary tax within the legal deadlines will result in a delay penalty as per Article (2/110) of the Income Tax Law No. 91 of 2005.

Proof of Payment and Compliance

The obligation to submit salary tax declarations applies to a range of entities, including:

• Employers and entities required to pay taxable income as outlined in Article (9) of the Income Tax Law No. 91 of 2005.
• Companies and projects established in free zones.
• Companies and projects established in special economic zones.
• Medium, small, and micro enterprises subject to the provisions of Law No. 152 of 2020.
• Establishments with insured or uninsured employees, including establishments dealing in price-controlled goods.
• Recipients of taxable revenue (employees) if the employer or the party obligated to pay the taxable revenue is not resident in Egypt or does not have a permanent establishment in Egypt.
• Establishments with employees where the annual net income from salaries and their equivalents for each employee does not exceed the exemption limit stipulated by the Income Tax Law.

Establishments without any employees (insured or uninsured) are exempt from submitting salary tax declarations and their equivalents.

Employer Obligations Related to Salary Tax

Employers and those obligated to pay salary income and its equivalents must adhere to the following:

• Remit the amount withheld on account of the due tax within the first fifteen days of each month for the amounts paid during the previous month.
• Withhold and remit the tax on amounts paid by a secondary employer to residents within the first fifteen days of each month for the amounts paid during the previous month using Form No. (2 Salaries).
• A secondary employer from whom the employee receives more than 50% of their income is considered the primary employer and must withhold and remit an amount on account of the tax for the amounts paid to the employee, with an annual reconciliation and calculation of the due tax on Form No. (3 Salaries) in January of each year.
• Submit quarterly declarations in January, April, July, and October of each year using Form No. (4 Salaries). Submit an annual tax declaration with the final settlement at the end of the year in January of each year.
• If the employer or the party obligated to pay the revenue is not resident in Egypt:
• The non-resident revenue recipient must submit a statement of the amounts received and the due tax before leaving Egypt.
• The resident revenue recipient must submit a comprehensive statement of the total amounts received during the previous year on January 1st of each year.

In all cases, the statement referred to must be submitted using Form No. (5 Salaries).

Conclusion

Tax declarations on salaries and the like must be submitted through the Egyptian Tax Authority’s electronic portal or any other electronic channel designated by the Ministry of Finance, with the necessity of registering the taxpayer and obtaining a confidential password. The taxpayer must provide proof of payment of the due taxes within the legal deadlines and through one of the legally approved payment methods. The obligation to submit declarations applies to business owners and projects in free zones, special zones, and small and medium enterprises. Business owners must settle any reserved taxes within the first 15 days of each month, and submit quarterly and annual declarations. Special provisions apply to non-residents regarding the submission of due tax information.

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