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Answer
Q: Two
Basic salary = 1500×12 18,000
Variable wages (3000+400+100+200)×12 12,000
Total 30,000
Deduct
Exemptions by special laws:
- special raises added to the basic salary = 200×12 2,400
- special raises not added to the basic salary = 100×12 1,200
Exemptions by article no.13 of the tax law:
- personal annual exemption, item 1 4,000
- social security subscription for the 1,176
basic salary = 8,400×14% = 1176 660
variable wages = 6,000×11% = 660
Net revenues (temporarily) used to calculate: life insurance 24,570
premiums.
Actual amount paid = 100+100 x 12 (2,400)
Total amount of taxable revenue 18,164
Deduct:
Personal deduction according to article no.7 of the tax law (5,000)
Taxable income (or tax base): 13,164
Tax is calculated according to the provision of article no.8 as follows:
Taxes due for the year = 13,164 x 10% = 1,316
Taxes due per months = 1,316/12 = L.E. 110
Net salary (Monthly) = 30,000/12 – 110 = 2,390
Q: Three (A)
Donations to the government, Local Authority Units and other public legal entities, whatever their value.
Donations and subsidies to Egyptian non-governmental organizations and foundations registered in
accordance with the provisions of their respective laws, as well as to educational institutions and hospitals
subject to governmental supervision, and Egyptian scientific research institutions, providing they do not exceed
10% of the taxpayer’s annual net profit.
Q: Three (B)
Depreciable Tax
value depreciation
The original cost of the plant in Jan.2,007 1,000,000
The cost of the plant is being consumed at a rate of 5%=1,000,000 × 5% 50,000 L.E.
The cost of the new plant as of 7.1.2007= 1,500,000
Original cost of the plant – cost of land = 2,000,000 – 500,000 =
1,500,000 L.E.
Depreciation = 1,500,000 × 5% × (6/12) 37,500 L.E.
The cost of renewal as of 10.01.2007 = the cost of renewal – 80,000
maintenance = 100,000 – 20,000 = 80,0000
Depreciation = 80,000 × 5% × (3/12) 1,000 L.E.
Total depreciation 88,500 L.E.
Q: Four (B)
1- 30 x 30 x 100/14 = 6428.5
2- 40 x 40 x 100/14 = 11428.5
3- Not taxable
4- 100 x 700 = 70,000
87,857
Deductible expense
30% x 87,857 = (26357)
61,500
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Answer
Q: Two
Solution

Total income
Basic salary = 500×12 6,000
Variable wages (100+50)×12 1,800
Total 7,800
Deduct
Exemptions by article no.13 of the tax law:
- personal annual exemption, item 1 4,000
- social security subscription for the 840
basic salary= 6000×14% = 840 198
variable wages= 1800×11% =198
Total (5,038)
Total amount of taxable revenue 2,762
Deduct:
Personal deduction according to article no.7 of the tax law (5,000)
Taxable income (or tax base): (2,238)
No tax is due on the employee during the period from January 1 to June 30, 2015.

(2)

Total income
Basic salary = 550×12 6,600
Variable wages (150+440+60)×12 7,800
Total 14,400
Deduct
Exemptions by article no.13 of the tax law:
- personal annual exemption, item 1 4,000
- social security subscription for the 924
basic salary= 6600×14% 660
variable wages= 6000×11%
Total (5,584)
Total amount of taxable revenue 8,816
Deduct:
Personal deduction according to article no.7 of the tax law (5,000)
Taxable income (or tax base): 3,816
Tax is calculated according to the provision of article no.8 as follows:
Taxes due for the year= 3,810 × 10% = L.E.318
Taxes due per months = 318/12 = L.E. 31.75 for the period from July 1 to December 31,
2015.

(3) Taxes due on the bonus:

Taxes due on the bonus may be calculated separately. we do not have to add it to the total amount of
taxable income of the employee, since it will not shift him to higher slice (still less than 15,000).

No deduction for special security subscription since he has been incurred for maximum amount of
variable wages L.E. 6,000.

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(4) Tax reconciliation statement at the end of the year:

Total income during the year

Basic salary = 500×6+ 550×6 6,300
Variable wages:
Nature of work allowance 100 ×6 + 150×6 1,500
Overtime 50×6 + 60×6 660
Incentives 440 × 6 2,640
bonus 600
Total 5,400
Total income 11,700
Deduct
Exemptions by article no.13 of the tax law:
- personal annual exemption, item 1 4,000
- social security subscription for the
basic salary= 6300×14% 882
variable wages= 5400×11% 594
Total (5,476)
Total amount of taxable revenue 6,224
Deduct:
Personal deduction according to article no.7 of the tax law (5,000)
Taxable income (or tax base): 1,224
Tax is calculated according to the provision of article no.8 as follows:
Taxes due for the whole year = 1,224 × 10% 122
Deduct: taxes paid during the year:
For the first 6 months = 0× 6 0
For the second 6 months = 31.75 × 6 190.5
For the bonus 60
Total 250.5
Taxes paid by employee is more than taxes due by the amount of L.E. 96.5
(250.5 – 122).
This amount should be refunded to the employee.

Q: Three
Solution

Statement Depreciation base Tax depreciation

Balance (depreciation base) in 01.01.2007 45,000
(+) Additions
On 1/4/2007 = 15,000 L.E.
On 1/10/2007 = 18,000 L.E.
Total 33,000 L.E.
(-) The accelerated depreciation 33,000 × 30% =
(9,900)
(=) The value of additions after depreciation 33,000 9,900
– 9,900 = 23,100
Total 23,100
(-) Realizable value 68,100
Balance 12/31/2007 (8,100)
The annual depreciation tax 60,000 × 25% 60,000
Balance 01/01/2008
(15,000) 15,000
45,000

Total tax depreciation 24,900

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Q: Three
Second
Solution

Year 2006 2007 2008 2009 2010 2011 2012

Year
income 22,000 (20,000) 38,000 35,000 30,000 7,000 5,000
(loss)
Losses
carried 120,000 (98,000) (98,000) (60,000) (25,000) - -
forward
2005 (98,000) (98,000) (60,000) (25,000) 5,000 7,000 5,000
loss
2007 ---- (20,000) (20,000) (20,000) (20,000) (15,000) (8,000)
loss
Year
income (98,000) (118,000) (80,000) (45,000) (15,000) (8,000) (3,000)
(loss)

Q: Four
Net profit before tax from the income statement 80,000
Add:
Donations paid to the poor (3,500 – (100 + 700 + 1,200) 600
Donations to registered Egyptian charitable organizations (temporarily 1,200
added)
Interest of a loan to finance project belongs to son of the owner 2,500
Losses from selling securities registered in the stock exchange market 3,500
Accounting depreciation for machinery and equipment 9,000
The increase in the insurance expense (3,200 – 3,000) 200
Bad debts (not fulfill the conditions) 4,000
Real estate revenue (according to the accrual basis) = (600 × 12 – 2,200
5,000) = (7,200 – 5,000)
Total 23,000

Deduct: 103,000
Tax depreciation for machinery and equipment 41,000
Adjusted net income before deducting donations for registered (41,000)
Egyptian charities
The amount paid 1,200 L.E. or the maximum= 103,000 × 10 ÷ 110 = 1,200 (1,200)
210,3004,655 whichever is less
Adjusted net profit 60,800
Deduct:
Dividend from shares of joint stock company 3,000
(3,000)
Taxable net profit 57,800

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Q: Five
The taxable revenues:
Office visit fees 120,700
Surgery fees 221,700
Renting half of building 32,000
Rent of advertising 4,800
Fees from El-Mahla 39,000
Fees from participating MTV 16,000
Gain from sale old equipment 6,000
Total taxable revenues 440,200
Less deductible expenses:
Salaries 189,600
Purchase new advanced 100,000
Utilities 25,100
Property tax on building 16,000
Car expense (9,000+6,000) 15,000
Dep.expense 14,600
Salary of his son 18,000
Retirement insurance 6,000
Total deductible expenses 384,300
Net revenue 55,900
Less: donation to gove ( 6%x 40,000) (24,000)
Donation to private 40% x 40,000 = 16,000 but Ma. Limit 10% (5,590)
x 55,900 = 5590 (3,000)
Less: insurance premium (10,000)
Less: Losses carried forward
Taxable net revenue 13,310
Due Tax:
5,000 exempted
8,310 x 10% = 831
Less:
3,900 x 5% = (1,950)
16,000 x 5% = (800)
Q: Six
Explanation Assessed rental Gross revenue
value(ARV) (ARVx2)
1. Dues per acre = total dues / number of acres =
= 18,900 / 30 = 630 per acre

Number of taxable acres= 30 acres – 3 acres L.E. 121,500 L.E. 121,000

exempted= 27 acre

27 acres x 630 dues x 100/14 = L.E. 121,500

2. The land bought by her husband is taxable under
his name since he bought it from non-family member.
He would follow the same determination above but
under his name as taxpayer.
3. ARV per acre= total ARV / numbers of acres =
= 70,0000 / 10 = 7,000 per acres L.E. 63,000 L.E. 63,000

Number of taxable acres = 10 acres – 1 acre exempted

= 9 acres

9 acres x 7,000 ARV = L.E. 63,000

Total gross revenue L.E. 184,000
Less: 20% expenses and costs L.E. 63,900
Taxable net revenue L.E. 147,600

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