What is a Tax Declaration?

Tax declarations are documents submitted by individuals or companies to tax authorities (like the Tax Authority) to disclose financial information related to income, expenses, deductions, profits, and taxes paid. The purpose of the declaration is to determine the amount of tax an individual or entity must pay, based on their income and economic activities over a certain period. The types of tax declarations vary depending on the type of income or economic activity.

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Types of Tax Declarations in Egypt

There are several types of tax declarations submitted by individuals and companies based on their economic activity or income. Below are the key types of tax declarations in Egypt:

• Income Tax Declaration for Individuals:
• Submitted by individuals earning income from various sources like wages, freelance activities, or rentals. It includes details about total income, deductible expenses, and taxes previously paid.
• Income Tax Declaration for Companies:
• Submitted by companies to determine the income tax owed based on their annual profits. It includes revenues, expenses, allowable deductions, and net profits.
• Value Added Tax (VAT) Declaration:
• Submitted by commercial entities that provide goods or services subject to VAT. The tax owed or paid on sales and purchases is calculated and submitted monthly or quarterly.
• Commercial and Industrial Profits Tax Declaration:
• Submitted by individuals or entities engaged in commercial or industrial activities. This declaration is used to calculate taxes owed based on profits made from business or industrial activities.
• Rental Income Tax Declaration:
• Submitted by individuals or companies receiving income from renting properties. It includes details about rental income and related property expenses.
• Stamp Tax Declaration:
• Submitted for transactions like signing contracts or issuing certain legal documents. It includes the tax amount due for transactions subject to stamp duty.
• Distribution Tax Declaration (Capital Gains Tax):
• Submitted when profits are distributed to shareholders or capital assets like shares and properties are sold. It includes the amount of capital gains tax due on distributions or profits from sales.
• Payroll Tax Declaration:
• Submitted by employers who pay wages to employees. It includes details about paid wages, allowable deductions, and taxes withheld from salaries.

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Who Must Submit Tax Declarations in Egypt?

Several individuals and entities must submit tax declarations to the Tax Authority, depending on their type of economic activity or income. Below are the key categories that must submit tax declarations:

• Individuals earning income from employment must submit an income tax declaration if their earnings exceed the tax exemption threshold.
• Freelancers or self-employed professionals (like doctors, lawyers, engineers) must submit an income tax declaration.
• Companies engaged in commercial or industrial activities must submit an annual income tax declaration.
• Entities selling goods or services subject to VAT must submit VAT declarations periodically (monthly or quarterly).
• Individuals and companies with rental income must submit a rental income tax declaration.
• Individuals or entities selling capital assets must submit a capital gains tax declaration.
• Small business owners whose income exceeds the threshold for exemption must submit a tax declaration.
• Employers paying wages must submit payroll tax declarations for their employees, and income tax is withheld from their wages.
• Entities conducting transactions subject to stamp duty must submit stamp tax declarations.
• Financial institutions and banks offering financial services like loans or investments must submit tax declarations related to profits or interest.

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Tax Declaration Deadlines in Egypt

Tax declaration deadlines vary based on the type of tax and economic activity. Below are some important deadlines for submitting tax declarations in Egypt:

• Income Tax Declaration for Individuals:
• Personal income tax (wages or salaries) must be submitted annually by the end of March the following year.
• Freelancers must submit their tax declarations by the end of March of the following year.
• Company Income Tax Declaration:
• Companies engaged in trade or industry must submit their income tax declaration by the end of April the year following the end of the fiscal year.
• VAT Declaration:
• VAT-registered entities must submit their VAT declarations either monthly or quarterly:
• Monthly: By the 15th of the month following the sales.
• Quarterly: Small businesses may submit quarterly by the 15th of the month following the quarter's end.
• Payroll Tax Declaration:
• Employers must submit monthly payroll tax declarations, with taxes due by the last day of the month of payment.
• Stamp Tax Declaration:
• Stamp tax declarations are submitted close to the transaction date, such as when signing contracts or issuing legal documents.
• Capital Gains Tax Declaration:
• Must be submitted by the end of the month following the sale of capital assets like shares or property.

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Important Tax Laws Related to Declarations in Egypt

Several laws and regulations govern the tax system and define how tax declarations are to be submitted and the taxes calculated. Key tax laws in Egypt include:

1. Income Tax Law No. 91 of 2005
2. This is the main law regulating income tax, detailing how taxable income is calculated, including income from freelance work, salaries, and commercial or industrial profits. It also covers the timing of tax declarations and penalties for delays.
3. Value Added Tax Law No. 67 of 2016
4. Regulates VAT on goods and services, including who must register for VAT, declaration deadlines, and payment methods.
5. Stamp Tax Law No. 111 of 1980
6. Regulates stamp tax on legal and administrative transactions, such as contract signings and issuing legal documents.
7. Unified Tax Procedures Law No. 206 of 2020
8. Covers all tax procedures, including submission, audits, and collection. It defines the rights and duties of taxpayers and tax authorities and allows electronic submission of tax declarations.
9. Capital Gains Tax Law (Law No. 82 of 2017)
10. Regulates capital gains tax on individuals or companies selling capital assets like real estate or stocks.
11. Corporate Tax Law No. 159 of 1981
12. Regulates income tax collected from companies, covering profit calculations and allowable deductions.

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Tips for Avoiding Mistakes When Submitting Tax Declarations

Here are some tips to help avoid mistakes when submitting tax declarations:

1. Gather All Required Documents:
2. Ensure all financial documents and supporting paperwork are collected before submitting the declaration.
3. Review Income and Expenses Carefully:
4. Double-check all sources of income and allowable expenses for accuracy.
5. Ensure Accuracy in Calculations:
6. Verify all numbers and calculations to prevent errors.
7. Adhere to Deadlines:
8. Submit the declaration before the deadline to avoid penalties.
9. Use Electronic Systems:
10. If registered with the Tax Authority's electronic system, use it for more accurate and easier submissions.
11. Consult a Tax Advisor:
12. If unsure about any part of the declaration, consider seeking advice from a tax consultant or accountant.

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