Egypt-US treaty: status and key articles
The Egypt-US tax convention has been in force since 1981. Among older US treaties; rates on royalties are less competitive than newer agreements.
- Article 7 (Business Profits): Egyptian-resident operating profits are taxable only in Egypt without US PE.
- Article 10 (Dividends): 5% for 25%+ ownership. 15% standard.
- Article 11 (Interest): 15% on portfolio interest.
- Article 12 (Royalties): 15-25% depending on type.
- Article 24 (Relief from Double Taxation): Egyptian FTC mechanism.
Withholding rates by income type for Egyptian residents
| Income type | Default US rate | Egypt treaty rate |
|---|---|---|
| US-source dividends (25%+ ownership) | 30% | 5% |
| US-source dividends (standard) | 30% | 15% |
| US-source portfolio interest | 30% | 15% |
| US-source royalties | 30% | 15-25% |
| Business profits without US PE | Generally not taxed | Generally not taxed |
How Egyptian Tax Authority treats US LLCs
Egyptian Tax Authority generally treats US single-member LLCs as transparent for Egyptian tax purposes. LLC operating income flows through to your annual Egyptian tax return and is taxed at progressive Egyptian rates.
Common Egyptian LLC use case: Egyptian consultants serving US/EU clients use Wyoming LLC for USD invoicing while keeping local Egyptian tax compliance through the pass-through.
How to file W-8BEN-E from Egypt
- Line 1: LLC legal name
- Line 4: Chapter 3 status: Disregarded Entity
- Line 5: Country of residence: Egypt
- Line 6: Permanent residence address in Egypt
- Line 8: US TIN (EIN)
- Line 9: Foreign TIN (your Egyptian Tax ID)
- Part III: claim treaty benefits citing the applicable article
Common mistakes by Egyptian founders
- Expecting modern-treaty royalty rates (Egypt-US royalty rates are less competitive)
- Not filing W-8BEN-E with US payers (30% default applies)
- Missing Form 5472 + 1120 ($25K penalty)
- Not declaring LLC income on Egyptian tax return
- Missing CBE (Central Bank of Egypt) approvals for USD inflows