Tax Accounting

Contents Part 1: Income Tax on Natural Persons Ch 1: Introduction Ch2: Characteristics of tax on natural persons. Ch3: Tax on Salaries and the Like. Ch4: Tax on Commercial and industrial activity. Ch5: Tax on Non-Commercial activity. Ch6: Tax on Real Estate Wealth. Dr. Amr Nazieh

Chapter 1: Introduction Dr. Amr Nazieh

Classification of taxes Tax is A cash levy collected by the government from individuals and establishments in accordance with determined rules with the aim of financing public expenditure and achieving economic and social welfare Dr. Amr Nazieh

Classification of taxes The Egyptian tax system includes: Tax on Salaries. Tax on Revenues of Commercial and Industrial Activities. Tax on Revenues of Non - Commercial Professions. Tax on Real Estate Wealth Revenues. Tax on profit of Juridical Persons. Sales tax Dr. Amr Nazieh

Classification of taxes The major types of taxes are: Direct and indirect taxes. Qualitative and unified taxes. Personal and in-kind taxes. Proportional and progressive taxes. Taxes paid by the payer directly and taxes deducted from the income of the tax-payer at source. Dr. Amr Nazieh

Classification of taxes Direct and indirect taxes Direct Indirect The person who bears its charge is the one who pays the tax When transfer its burden to another person Dr. Amr Nazieh

Classification of taxes Qualitative and unified taxes Qualitative Unified When imposing on each kind of income as an independent tax separately. When imposing on total incomes regardless their sources at a unified rate. Dr. Amr Nazieh

Classification of taxes Personal and in-kind taxes Personal In-kind When considering the tax-payer’s payment capability and allow him some exemptions When imposing tax on total income regardless the tax-payer’s personal circumstances. Dr. Amr Nazieh

Classification of taxes Proportional and progressive taxes Proportional Progressive When imposing a fixed rate on the taxable amount regardless its value. When the tax rate related to the taxable amount. Dr. Amr Nazieh

Classification of taxes Taxes paid directly and taxes deducted from the income at source. Paid directly Deducted at source Taxes are paid directly to the tax administration. Taxes are retained from source by an intermediary who is obligated to pay tax to the tax administration. Dr. Amr Nazieh

Classification of taxes Income taxes in Egypt Income tax on Natural Persons Salaries Commercial and Industrial activities Non-Commercial professions Real Estate wealth Tax on Profit of Juridical Persons Partnership. Corporations. Dr. Amr Nazieh

Income Tax on Natural Persons Part 1 Income Tax on Natural Persons Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. The person who bears its charges is the one who pays it without transferring this charge to another person. It imposes only on natural persons not on corporate entities. 1 It is a direct tax imposed on natural persons only Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. It is imposed on the total net income realized by the tax-payer during one whole year. 2 It is an annual tax Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. The tax is imposed on the income of natural persons usually resident in Egypt, and on the non-resident in Egypt in relation to income realized in Egypt only. 3 It is a tax adopted the principle of economic and social appurtenance Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. First: Persons usually resident in Egypt The tax applies to the income of each natural person resident in Egypt, whether he is an Egyptian, or a Foreigner. Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. First: Persons usually resident in Egypt The tax is imposed on his total income whether realized in Egypt or abroad as per the principle of social appurtenance. Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. First: Persons usually resident in Egypt The conditions that considering the tax-payer normally resident in Egypt are: Residing in Egypt for a period exceeding 183 continuous or interrupted days during the fiscal year. Egypt is the principal place of residence.

Ch2: Characteristics of tax on natural persons. First: Persons usually resident in Egypt The conditions that considering the tax-payer normally resident in Egypt are: (3) Egypt is the main centre of his commercial, industrial or professional activity. (4) The Egyptian who performs functions of his position abroad and receives his income from the Egyptian treasury.

Ch2: Characteristics of tax on natural persons. Second: Non- resident Persons The tax is imposed on the income of natural persons not resident in Egypt, whether Egyptians or foreigners, on their income realized in Egypt in accordance with the economic appurtenance . Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. Second: Non- resident Persons The Law excepted some persons from being subjected to taxation as follows: (1) Ambassadors and Ministers Plenipotentiary and other political representative, as well as Foreign Consuls and Consular representatives, on condition of reciprocity and within limits of that treatment. Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. (2) Foreign technicians and experts residing in Egypt whenever their employment is at the request of the government, one of the public Authorities, private companies, or an individuals as regards their revenues resulting from sources outside Egypt. Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. It grants the tax- payer an exemption to face the minimum limit of the cost of living and family charges L.E.6500. As for the tax-payer with incomes only from salary or wages the law grants him or her L.E. 7000. 4 It is a personal tax Dr. Amr Nazieh

Ch2: Characteristics of tax on natural persons. The first slice more than L.E. 6500 up to L.E.30000 (10%). The second slice more than L.E.30000 up to L.E.45000 (15%). The Third slice more than L.E. 45000 up to L.E. 250000 The last slice more than L.E. 250000 (22.5%) 5 It is a progressive tax Dr. Amr Nazieh