How are expense reimbursements handled in Egypt?



Modified on: Mon, 22 Sep, 2025 at 7:34 PM

TABLE OF CONTENTS


Horizons Egypt ensures that employees are reimbursed for legitimate business expenses in compliance with Egyptian tax laws and company policies. Proper documentation and adherence to procedures are essential to avoid tax implications and ensure smooth processing.



Under Articles 11 and 12 of Egyptian Tax Law No. 91 (2005), any payment made to an employee is considered taxable income unless it is properly classified as a business expense.

To be treated as a non-taxable reimbursement, expenses must comply with Decision No. 323 (2022) issued by the Egyptian Tax Authority.


How to Ensure an Expense Is Treated as a Business Cost

To correctly categorize an expense as a non-taxable business reimbursement, employees must:

  • Ensure the invoice is issued in the name and tax ID of their official employer in Egypt

Horizons Global HR Consulting 

Commercial registration number: 208452

  • Use the Egyptian E-Invoicing Portal for all local vendor invoices.
  • Confirm the correct company name and tax details before arranging any expense.

Reimbursements not supported by a compliant e-invoice will be treated as taxable income.


Travel & Mileage

Mileage Reimbursement

  • Employees using personal vehicles for business travel may claim EGP 10–15 per kilometer.
  • A detailed mileage logmust be maintained, including:
    • Date of travel
    • Purpose of trip
    • Start and end locations
    • Total kilometers traveled

Parking & Tolls

  • Parking tickets and tolls must be submitted as separate expenses with receipts.
  • Illegal parking fines are not reimbursable.

Business Travel Restrictions

  • Travel must be related to the company’s business activity to be accepted by the Tax Authority.
  • There are no specific rules for air, bus, train, tram, taxi, or rental car travel.



Invoicing & Documentation

To be reimbursed tax-free, invoices must include:


For Local Vendors (Inside Egypt):

  • Company name (Horizons Egypt)
  • VAT registration number
  • Company address
  • Must be issued via the Egyptian E-Invoicing Portal


For Foreign Vendors (Outside Egypt):

  • Company name (Horizons Egypt)
  • VAT registration number
  • Company address

Invoice Requirements

  • Invoices are always required
  • Horizons must be listed as the legal employer
  • No threshold under which invoices are not required



Reimbursement & Taxability

Tax-Free Reimbursable Expenses

With proper documentation (e.g., e-invoicing), the following are tax-free:

  • Transportation (e.g., Uber)
  • Business travel
  • Office-related purchases

Per Diems

  • Cash allowances are taxable
  • No official per diem exemption rates provided
  • All per diem payments must be documented and will be taxed unless exempted by law

Entertainment & Gifts

  • All benefits related to employees are subject to tax
  • Includes client entertainment, team gatherings, and gifts

Health & Wellness Expenses

  • Employees may claim medical bills if covered under a company-wide medical insurance policy
  • Individual entertainment or wellness expenses (e.g., gym, yoga) are considered taxable benefits

VAT

  • VAT (Value Added Tax) applies to all reimbursable expenses unless specifically exempted
  • Employers must ensure VAT compliance in accounting



Compliance Considerations

  • Group in-kind benefits (e.g., accommodation, medical care) are non-cash advantages provided to employees collectively and may be tax-exempt
  • All receipts must be accurate and complete
  • Expenses must be incurred directly for business purposes
  • Payments should be made via bank transfer or company card for audit compliance
  • Expenses must be reported within the fiscal year


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