Is Egypt Tax Free? What Foreign Residents Actually Pay (2026)

Egypt is not tax free. It does tax foreign residents more narrowly than many newcomers expect, and some taxes that Europeans pay at home do not exist here at all. When people settling in Sharm El Sheikh ask us "is Egypt tax free?", the real question is usually more personal: will Egypt tax my pension, the rent from my flat, my savings abroad, or the work I do for foreign clients from a laptop by the sea?

Two tests decide it. The first is whether you are tax resident in Egypt. The second is where each part of your income comes from. This guide sets out both as of October 2026, with the rates that apply, the taxes Egypt does not levy, and the points where the general rule stops and your own facts take over.

Is Egypt tax free for foreigners who live here?

Not for Egyptian income. A salary from an Egyptian employer, rent from property in Egypt and profits from a business here are all taxed. Income from abroad is taxed only in one situation, and inheritance, gifts and wealth are not taxed at all. For a foreign resident, the picture looks like this:

Two points sit behind the table. Tax residence is not the same as a residence permit. And "income from abroad" can mean a pension, interest on savings at home, or a foreign salary for work you actually do in Sharm. The sections below take them in turn.

When do you become tax resident in Egypt?

You are tax resident in Egypt if either of these applies:

• you have a permanent home in Egypt; or
• you are in Egypt for more than 183 days within 12 months.

The test looks at your home and your days, not at the card in your passport. Residence permits are granted by purpose, such as work, investment, property ownership, family, study or tourism, and Egypt has no dedicated retirement visa, so a retiree applies under one of the other purposes. The permit routes are compared on our residence permit page. None of them settles the tax question on its own.

If you keep a flat in Sharm, the permanent-home limb deserves as much attention as the day count, because it can make you resident in a year when you spend fewer than 183 days here. How it applies to a holiday flat you use for part of the year depends on the facts, and it is one of the first things we check.

Your home country runs its own residence test at the same time, so you can be treated as resident in both countries. Egypt's tax treaties then set which country may tax which income, for example:

Does Egypt tax income you earn abroad?

The rule, as of October 2026: tax residents are taxed on their Egyptian income, and on foreign income only if their centre of activity is in Egypt. The centre of activity means where your business or professional activity is based, not where you sleep.

On a plain reading, that works in favour of many retirees. Someone living in Sharm on savings and investments held abroad has no business or profession in Egypt to anchor that income here. Someone who runs a company, a practice or a dive business from Sharm is in a different position, and their foreign income may follow their activity into the Egyptian return. It is a test of facts, not of nationality, and we look at it before anything else.

What about remote work from Sharm?

This is where the general rule runs out. If you work from Sharm for a foreign employer or for foreign clients, two questions arise together. Is pay for work physically done in Egypt still foreign income? And has your centre of activity moved here with you? The answer changes with your contract, who pays you and from where, where your clients are, and how much of the year you spend in Egypt. We do not publish a single answer because there is not one.

If you decide to set up locally instead, one detail matters for remote contractors. The simplified regime of Law 6/2025 taxes small businesses and freelance professionals at 0.4% to 1.5% of turnover, but it excludes consultancies that earn 90% or more of their income from one or two clients, which is the usual shape of a remote contract.

Are pensions taxed in Egypt?

According to PwC's summary of Egyptian tax, reviewed on 17 August 2026, pensions and end-of-service bonuses are exempt from Egyptian income tax. For a retiree, that is the headline. Two questions follow, and neither has a one-line answer.

The first is scope. Whether the exemption reaches a pension paid to you from abroad, in the same way as an Egyptian pension, is a point we confirm for each case rather than assume. The second is the country that pays you. The treaty between Egypt and that country decides which of the two may tax your pension, and the answer depends on your pension and on that treaty.

For Italian pensioners, we explain the Italian side in our guide to how an Italian pension is taxed in Egypt. The wider picture for retirees and other foreign residents, from residence days to treaty claims, is on our tax service for expats and retirees in Egypt.

How is rent from a flat in Egypt taxed?

Rent from property in Egypt is Egyptian income. Built property let under the Civil Code and furnished units are taxed the same way: actual rent minus 50%, then the personal income-tax brackets. The 50% is a flat deduction for costs, and there is no option to deduct actual expenses instead: the old Article 40 election was repealed in 2008. Individuals file the return by 31 March of the following year. If you live abroad, your home country may also tax the same rent.

The property itself carries a separate tax, and what you pay on it is credited against the income tax on the rent:

The last line is the real-estate disposal tax (Income Tax Law, as restated by Law 151/2026). It also covers a lease of more than 50 years, which matters for usufruct units in Sharm. Letting to tourists adds a licence from the Ministry of Tourism, explained in our guide to Airbnb rules for Sharm El Sheikh apartments. The yearly filing for owners, from the rent to the property tax, is on our tax filing service for property owners.

What do you pay if you work or run a business in Egypt?

A salary from an Egyptian employer is taxed at the brackets of Law 7/2024 after an annual employee exemption of EGP 20,000, and your employer deducts the tax from your pay. Working for an Egyptian employer normally also needs a work permit under Labour Law 14/2025.

Above EGP 600,000 of net income the lower bands are withdrawn, so a high earner does not keep the 0% band. With a second job, the second employer withholds 10% on account and your main employer recomputes the tax on your total pay.

Payroll also carries social contributions. Social insurance is 11% for the employee and 18.75% for the employer, on an insurable wage between EGP 2,700 and 16,700 a month in 2026. In South Sinai, Universal Health Insurance adds 1% for the employee and 4% for the employer. How these apply to a foreign employee depends on the contract and the nationality, and we settle it when we set up the payroll.

If you run a business, an Egyptian company pays corporate income tax at 22.5%. A sole trader or freelance professional is taxed at the brackets, or under the simplified regime at 0.4% to 1.5% of turnover where turnover is EGP 20 million or less. From tax period 2028, every business must keep regular books.

Does Egypt have inheritance, gift or wealth tax?

No. As of October 2026, Egypt has no inheritance tax, no gift tax and no net-wealth tax.

Property is the exception to watch. The 2.5% disposal tax treats a gift or a will of built property or building land as a taxable disposal when it goes to anyone other than parents, spouses or children, and heirs who later dispose of inherited property pay it too. Your home country may still tax an estate or a gift under its own rules.

Do foreign residents pay VAT in Egypt?

Yes, in the price of what you buy. VAT is 14% on most goods and services, 5% on machinery and, since 29 July 2026, on medical devices. Residential leases are exempt, so a long-term rent on your home carries no VAT.

The tourist VAT refund, for invoices of at least EGP 1,500 and paid to the traveller's own foreign card, is written for visitors: it requires a stay of no more than 3 months and goods that leave Egypt with you.

What does a foreign resident file each year?

Late returns are expensive. A return filed up to 60 days late is fined EGP 3,000 to 50,000, and EGP 50,000 to 2 million beyond that. Late interest runs at the CBE rate plus 2%, capped at 100% of the tax.

We work with foreign residents across Sharm El Sheikh and South Sinai from Office 314, Al Azizia Mall, Ras Kennedy, or remotely on WhatsApp.