When Container Charges Become a Tax Issue in Egyptian Ports

In Egyptian ports, charges that look like routine operational costs — terminal handling charges, maritime agency fees, logistics services — can quickly become tax and regulatory questions once a foreign shipping company or an international transport operation is involved.

The questions we are asked most often start in the same place: how should Terminal Handling Charges (THC) be characterized for tax purposes? What VAT treatment applies to maritime and logistics services rendered to a foreign principal? And where a shipping line channels payments through more than one jurisdiction, which country has the right to tax which part of the transaction?

Double Taxation Agreements (DTAs) sit at the centre of many of these disputes. Egypt is party to a wide network of DTAs, and the characterization of a maritime activity — is it shipping income, a service fee, or something else — determines which treaty article applies, and therefore how much tax is actually due. Getting this characterization wrong at the outset is usually what turns a routine filing into a dispute with the tax authority.

VAT treatment raises its own set of questions. Maritime and logistics services connected to international transport can qualify for exemptions or zero-rating in some circumstances, but the conditions are specific, and disputes often center on whether a given service was genuinely ancillary to international transport or a separate, taxable supply.

For foreign shipping companies and their local agents, the practical risk is that these questions surface only after an assessment has already been raised — at which point the dispute is defensive rather than preventive. Structuring contracts and documentation with the tax treatment in mind from the outset, rather than after a claim, is what keeps port-related costs predictable.

This is where maritime law and tax law meet in practice. A dispute over container charges at an Egyptian port is rarely just a shipping question or just a tax question — it is usually both, and it is resolved fastest by counsel who can hold both threads at once.

This reflects the kind of integrated advisory our Tax & Customs practice, led by Yehia Mostafa Mohamed, provides alongside our maritime team.