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5.1. Tax Base for Resident Entities

Resident companies are subject to tax on their worldwide income. Expenditure and other allowances incurred wholly and exclusively for the generation of income are deductible.


Dividends received by an Egyptian company from a resident or non-resident subsidiary are eligible for a participation exemption, whereby 90% of the amount received as a dividend is exempt from tax provided the recipient has held an interest of at least 25% in the subsidiary for at least 2 years.

Capital Gains

Capital gains are generally treated as ordinary business income and subject to tax at the standard corporate tax rate. Capital gains arising from the disposal of government treasury bills issued during the period from 17 May 2020 until 31 December 2021 are taxable at standard corporate tax rate.

The tax treatment of capital gains is tributary of various factors including the type of gain and the date of realization. For a full overview, see the recapitulative table under Sec.8.1.1.

A capital loss can be offset against a capital gain arising during the same tax year. However, capital gains arising from the sale of shares can be offset only against capital losses arising from the sale of shares. Further, gains and losses on listed shares are pooled separately from gains and losses on unlisted shares, so that capital losses on listed shares can be offset only against gains from listed shares. Excess unutilized capital losses during a tax year can be carried forward for a period of three years and can be offset against capital gains from the sale of shares.