Capital Gains Tax in Egypt: Complete Investor's Guide
Detailed explanation of capital gains tax on stocks and real estate in Egypt with calculation methods and exemptions
Many Egyptian stock market investors don't know they owe tax on their profits until a surprise letter arrives from the tax authority. A 10% capital gains tax on stocks and 2.5% on real estate significantly cuts your real return. Understanding this tax and planning legally around it can save you thousands of pounds annually.
Capital Gains Tax on Listed Stocks
Egypt applies a 10% tax on net realized capital gains from listed stocks. Calculated as: selling price minus purchase price minus trading commissions.
**Practical Example:**
| Item | Amount |
|---|---|
| Purchase cost (1,000 shares × 20 EGP) | 20,000 EGP |
| Sale proceeds (1,000 shares × 30 EGP) | 30,000 EGP |
| Commissions and fees | 500 EGP |
| Net taxable profit | 9,500 EGP |
| Tax due (10%) | 950 EGP |
Collection: either automatically at settlement, or through annual tax return.
Loss Offsetting
One of the most valuable features: you can deduct losses from gains in the same tax year.
| Item | Amount |
|---|---|
| Gains from Company A shares | 20,000 EGP |
| Losses from Company B shares | 8,000 EGP |
| Net taxable gains | 12,000 EGP |
| Actual tax (10%) | 1,200 EGP |
| Tax saving | 800 EGP |
Net losses can be carried forward for up to 3 years.
Dividend Tax
- Rate: 10% on cash dividends
- Exemption: first 10,000 EGP annually is exempt
- Mechanism: withheld at source before distribution
Asset Type Tax Comparison
| Asset Type | Tax Rate | Calculation Basis | Notes |
|---|---|---|---|
| Listed stocks | 10% | Net profit | Loss offsetting available |
| Cash dividends | 10% | Gross amount | First 10K EGP exempt |
| Real estate | 2.5% | Full selling price | Not just the profit |
| Unlisted shares | Up to 22.5% | Profit | Private companies |
Real Estate Tax in Detail
Selling property is subject to a 2.5% real estate transaction tax on the full selling price — not just the profit.
Example: You sell an apartment for 2,000,000 EGP that you bought for 1,200,000 EGP. Tax = 2,000,000 × 2.5% = 50,000 EGP. Regardless of original purchase price.
There is an exemption for first residential units below a certain value. Inheritance transfers have special provisions.
Legal Strategies to Reduce Tax Burden
- **Tax-loss harvesting**: sell losing shares before year-end to reduce net taxable gains
- **Deferral**: hold shares longer = defer paying tax until actual sale
- **Document everything**: keep all buy/sell records and commission receipts to prove real costs
- **Use exemptions**: first 10,000 EGP of dividends is exempt annually
- **Consult a specialist**: a tax accountant is essential for large portfolios or multiple asset types
Make sound investment decisions first, then optimize your tax position within that framework. Don't hold a losing stock just to avoid tax, and don't sell a winner out of fear of it.
Frequently Asked Questions
Does capital gains tax apply to all stock market investors?+
Yes, it applies to all individual investors and companies that realize profits from selling listed shares on the Egyptian Stock Exchange. There is no minimum exemption threshold for stock capital gains, but cash dividends are exempt up to 10,000 EGP annually.
How is the stock gains tax collected?+
Either automatically at trade settlement through the brokerage firm, or via an annual tax return filed by the investor with the tax authority. Check with your brokerage firm to understand which collection method applies to your account.
Can I offset losses from a prior year against current year gains?+
Yes, net tax losses can be carried forward for up to 3 years. So if you had a net loss in 2025 that wasn't fully offset, you can deduct it from 2026 or 2027 gains.
Is the 2.5% real estate tax calculated on the profit or the full selling price?+
It is calculated on the full selling price, not just the profit. This makes it different from the stock gains tax. Selling an apartment for 2 million EGP means 50,000 EGP in tax regardless of what you originally paid for it.
What is tax-loss harvesting?+
It's the strategy of selling losing shares before year-end to offset gains from winning shares and reduce total tax. For example: you earned 30,000 in gains and lost 10,000 in other shares — sell the losers and you only pay tax on 20,000. You can repurchase the shares after a waiting period.