How are expense reimbursements handled in Egypt?

In Egypt, expense reimbursements must follow specific procedures to ensure they are treated as legitimate business expenses and not as taxable benefits to the employee. Failure to comply with these procedures may result in the reimbursement being subject to full income tax under Egyptian law.

Understanding the Taxation Rules

Under Articles 11 and 12 of Egyptian Tax Law No. 91 (2005), any payment made to an employee is considered taxable income unless it is properly classified as a business expense. This classification must be supported by documentation that complies with the regulations issued by the Egyptian Tax Authority, specifically Decision No. 323 (2022).

How to Ensure an Expense is Treated as a Business Cost

To correctly categorize an expense as a non-taxable business reimbursement, the following steps must be followed:

The expense must be invoiced using the name and tax ID number of the employee's official employer in Egypt.
The invoice must be issued through the Egyptian E-Invoicing Portal, in accordance with the Egyptian Tax Authority's electronic invoicing requirements.

Employees should review their employment agreement to identify the name and tax ID of their official local employer, as this information must appear on all submitted invoices.

Key Reminders

Reimbursements not supported by a compliant e-invoice will be treated as taxable income.
Employees are encouraged to confirm the correct company name and tax details before arranging any expense reimbursement.

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Egypt

How are expense reimbursements handled in Egypt?