How are expense reimbursements handled in Egypt?

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

TABLE OF CONTENTS

Understanding Taxation Rules
How to Ensure an Expense Is Treated as a Business Cost
Travel & Mileage
Invoicing & Documentation
- Required Documentation
  - For Local Vendors (Inside Egypt):
  - For Foreign Vendors (Outside Egypt):
- Invoice Requirements
Reimbursement & Taxability
Compliance Considerations
Best Practices for Employees

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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Egypt