The United States–Egypt Income Tax Treaty is designed to prevent double taxation and promote trade and investment between the two nations. The treaty provides clear rules on how income earned in both countries is taxed, ensuring fairness for U.S. and Egyptian residents, as well as businesses operating internationally.

At Z Tax & Accounting, our international tax specialists help individuals and businesses apply the U.S.–Egypt Tax Treaty to reduce global tax liability, maintain compliance with both U.S. and Egyptian tax authorities, and optimize cross-border tax strategies.

Key Provisions of the U.S.–Egypt Tax Treaty

1. Elimination of Double Taxation
   The treaty provides mechanisms such as foreign tax credits or exemptions to prevent the same income from being taxed in both countries. U.S. taxpayers can generally claim credits for taxes paid to Egypt, reducing their U.S. tax liability.
   
   

2. Residency and Tie-Breaker Rules
   Residency determines which country has primary taxation rights. In cases of dual residency, the treaty applies tie-breaker rules based on permanent home, center of vital interests, and habitual abode.
   
   

3. Business Profits and Permanent Establishment (PE)
   Profits from a business are generally taxed only in the country where the company has a Permanent Establishment, such as a branch, office, or factory. Without a PE, business income is typically taxed only in the country of residence.
   
   

4. Dividends, Interest, and Royalties
   
   

   • Dividends: Withholding tax rates are reduced to 5%–15% depending on ownership.
     
     

   • Interest: Often subject to reduced withholding rates or exemptions.
     
     

   • Royalties: Typically taxed at lower rates under the treaty to encourage licensing and cross-border transactions.
     
     

5. Employment Income and Personal Services
   Wages and salaries are taxable in the country where the services are performed unless the individual is present for a short duration or employed by a nonresident employer.
   
   

6. Pensions and Social Security Benefits
   Pension income is generally taxed only in the recipient’s country of residence. U.S. Social Security payments to Egyptian residents are usually taxable in the United States under treaty rules.
   
   

7. Capital Gains
   Gains from the sale of property are generally taxed in the country of residence, except for real property or assets connected to a Permanent Establishment in the other country.
   
   

8. Exchange of Information
   The treaty facilitates cooperation between the IRS and the Egyptian Tax Authority, allowing for the exchange of information to combat tax evasion and ensure compliance.
   
   

Treaty Benefits for Individuals

• Avoid double taxation on wages, pensions, dividends, and investment income.
  
  

• Benefit from reduced withholding tax rates on cross-border payments.
  
  

• Clarify residency and tax obligations under treaty rules.
  
  

• Access foreign tax credits and exemptions for income taxed abroad.
  
  

• Maintain compliance with both U.S. and Egyptian authorities.
  
  

Treaty Benefits for Businesses

• Prevent double taxation on profits from U.S.–Egypt operations.
  
  

• Reduce withholding taxes on dividends, interest, and royalties.
  
  

• Determine Permanent Establishment status to minimize tax exposure.
  
  

• Structure international operations efficiently to maximize tax savings.
  
  

• Gain legal certainty for cross-border transactions under treaty provisions.
  
  

Z Tax & Accounting – International Tax Experts

Z Tax & Accounting assists individuals and businesses in leveraging the U.S.–Egypt Tax Treaty. Our services include:

• Treaty-based return preparation and compliance
  
  

• Cross-border income reporting and foreign tax credit optimization
  
  

• Residency and Permanent Establishment analysis
  
  

• Structuring international business operations for treaty benefits
  
  

• IRS representation for expatriates and foreign nationals
  
  

We help you navigate complex international tax rules while minimizing global tax liabilities.

Contact Z Tax & Accounting

For professional guidance on U.S.–Egypt tax treaty benefits, contact Z Tax & Accounting. Our experts ensure compliance and optimize treaty advantages for individuals and businesses.

📞 Phone:  (214)  699-4790
📍 Office: 600 E John Carpenter Freeway, Suite 268, Irving, TX 75062

Z Tax & Accounting — Trusted Experts in International and Cross-Border Taxation

The above Summary may not include specifics about individual taxpayer's specific situation and is for general information. Contact us directly to discuss your situation. The link to the actual Tax treaty is as under: