Tax Issues for Irish Residents Investing in Egyptian Property
EGYPT
Income Tax
An individual who is not resident in Egypt for tax purposes and who is in receipt of rental income from Egyptian property is liable to Egyptian income tax at normal rates on any rental profit.
The rate of income tax in Egypt is 20% and deductions are available for maintenance and expenses in calculating the taxable rent and tax returns must be filed by March 31 each year.
Withholding Tax
Payment of rental income by Egyptian residents to non-residents may be subject to withholding tax at 20% on the full amount of the rental income without deductions.
Property Taxes
There is no Stamp Duty in Egypt. Land registry fees may be payable in connection with the registration of the property. Furthermore, the sale of land/buildings attracts a tax at a maximum cap of 250 Euro. The person making the disposal must file a return and pay the tax by 31st March following the disposal.
Capital Gains Tax/Inheritance Tax
There is no Capital Gains Tax or Inheritance Tax in Egypt.
IRELAND
Income Tax
As an individual resident in Ireland, Irish income tax will be payable on any profit arising in Egypt after normal deductions including interest paid. The deductions will also include any Egyptian income tax paid.
Capital Gains Tax
Irish resident individuals are liable to Irish capital gains tax on profits made in Egypt. Deductions in Ireland in arriving at the chargeable gain include legal and professional fees involved in the disposal whether in Egypt or in Ireland and also Egyptian property tax payable on the disposal.
Gift Tax/Inheritance Tax
Egyptian property will be liable to Irish Gift Tax or Inheritance Tax if, at the date of the gift or the date of death the person making the gift/bequest is resident or ordinarily resident in Ireland for tax purposes, or if the person receiving the gift or inheritance is resident or ordinarily resident in Ireland.
Double Taxation Agreements
Ireland is currently negotiating a double taxation agreement with Egypt. When that agreement is concluded, any income tax paid in Egypt will be available as a direct set off against the equivalent tax in Ireland (rather than as a deduction in arriving at taxable rental profits).
Professional Advice
Note: you are strongly advised to seek independent professional advice tailored to your specific needs before entering into any transaction. The above summary is by definition a brief outline of general tax issues and should not be relied upon for the purpose of any decision to purchase property. No responsibility can be taken for any loss suffered as a result of relying on the content of this summary.
Further Information
Property Management
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