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flag Lebanon Lebanon: Business Environment

In this page: Accounting Rules | Tax Rates | Intellectual Property | Legal Framework | Standards | Business Practices

 

Accounting Rules

Tax Year
The fiscal year begins on 1 January and ends on 31 December of the same year.
Accounting Standards
Lebanon has tried to reorganize its economy after 16 years of civil war, and part of this has been establishing accounting standards. They are close to those of the IASB (International Accounting Standards Board).
Accounting Regulation Bodies
BDL
Lebanese Ministry of Finance
Accounting Reports
Lebanon has introduced obligations regarding accounting and financial matters through decrees. Annual financial reports must be realized in accordance with the standards in force. They must therefore include:
- a balance sheet
- a profit and loss account
- notes to the accounts
- a cash flow statement.
Publication Requirements
All financial intermediation institutions must publish their financial statements periodically, their balance sheets linked to their operations and their accounts which must reflect their real financial situation.
Professional Accountancy Bodies
LACPA , Lebanese Association of Certified Public Accountants
Directory of Lebanese accountants
Middle East Society of Associated Accountants
Certification and Auditing
The control of accounts is compulsory and must be made by an auditor independent of the company. This independent auditor must be registered by the Lebanese Association of Certified Public Accountants and the Middle East Society of Associated Accountants or be a member of the IASC.
Accounting News
Review of the Lebanese Association of Certified Public Accountants

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Tax Rates

Consumption Taxes

Nature of the Tax
VAT (Value Added Tax).
Tax Rate
10%
Reduced Tax Rate
Some products (in Arabic) are VAT exempted or zero-rate taxed, such as livestock, books, unprocessed agricultural products, domestic butane, pesticides, bread...
Other Consumption Taxes
None

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Corporate Taxes

Company Tax
15% on income from profits.
Tax Rate For Foreign Companies
For more information consult the Ministry of Finance.
Capital Gains Taxation
Gains on the sale of fixed assets are principally taxed at a rate of 10%. However, gains, or a proportionate part thereof, are exempt of tax where the proceeds are invested in the construction of flats for company staff.
Main Allowable Deductions and Tax Credits
Local or foreign firms who set up business in disadvantaged areas or in certain sectors (agrifood, agriculture and IT), under certain conditions concerning the amount invested, number of jobs, and economic, environmental and technological impact, can benefit from total or partial exemptions.    
Other Corporate Taxes
There are different sorts of extra taxes: stamp duty on contracts and bills, forming, propagation or transformation of companies, tax on advertising, registration tax on real estate. A municipal tax is also levied. It is calculated annually on the basis of the rental value of the buildings. The rate is 7% for companies, to which 1.5% must be added for the maintenance of the sewerage system and roads. The total amount must be equal to LBP 50,000 at least. Finally, a professional tax has just been set up. It applies to capital companies, partnerships, individual companies, commercial activities and the liberal professions. Access the Investment and development authority of Lebanon website for additional information.
Other Domestic Resources
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 

Country Comparison For Corporate Taxation

  Lebanon Middle East & North Africa United States Germany
Number of Payments of Taxes per Year 19.0 19.0 11.0 9.0
Time Taken For Administrative Formalities (Hours) 180.0 184.0 175.0 207.0
Total Share of Taxes (% of Profit) 32.3 32.3 46.7 46.8

Source: Doing Business - Last Available Data.

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Individual Taxes

Tax Rate

From LBP 0 to 6,000,000 2%
From LBP 6,000,000 to 15,000,000 4%
From LBP 15,000,000 to 30,000,000 7%
From LBP 30,000,000 to 60,000,000 11%
From LBP 60,000,000 to 120,000,000 15%
Over LBP 120,000,000 20%
Allowable Deductions and Tax Credits
There are allowances according to the domestic situation:
Single individual: LBP 7.5 million
Married Couple: LBP 10 million
Married Couple (spouse works): LBP 7.5 million each
Children: LBP 0.5 million per child.
Special Expatriate Tax Regime
There is no special tax rate for foreigners.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of the conventions signed
Withholding Taxes
Dividends: 10%, Interest: 5 -10%, Royalties: 7.5%

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Sources of Fiscal Information

Tax Authorities
Lebanese Customs website
Finance Ministry website
Other Domestic Resources
2014 edition of the Doing Business in Lebanon guide published by the IFC

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Intellectual Property

National Organizations
Lebanon’s intellectual property (IP) legislation is generally compliant with international standards, and enforcement has improved in recent years. At the national level, the National Office for the protection of intellectual property operates.

Registration of patents and trademarks is on a first-in-time, first-in-right basis, so it is advised to apply for trademark and patent protection even before selling products or services in the Lebanese market. In January 2013,The Ministry of Economy and Trade launched online trademark registration.

Regional Organizations
Arab Society for Intellectual Property
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
 

National Regulation and International Agreements

 
Type of property and law Validity International Agreements Signed
Patent
 
Patent Law n° 240 of 2000
20 years from the date of payment of registration fee.
Trademark
 
Law of 1924 amended in 1946
15 years renewable indefinitely
Design
 
Law n°4 on patents, designs and industrial models of 15 May 2005
25 years renewable one time for 25 years.  
Copyright
 
Law on copyright 1999
Up to 50 years after the author's death Berne convention For the Protection of Literary and Artistic Works
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
Industrial Models
 
Law n°4 on patents, designs and industrial models of 15 May 2005
25 years renewable one time for 25 years.  

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Legal Framework

Independence of Justice
The new appointments to judicial bodies should strengthen the independence of justice.
Equal Treatment of Nationals and Foreigners
Equal treatment by the judicial institutions between Lebanese and foreigners.
The Language of Justice
The judicial language in the country is Arabic.
Recourse to an Interpreter
It is possible to have recourse to an interpreter.
Sources of the Law and Legal Similarities
The main source of the law in the country is the constitution of 1926 (amended many times, most recently through the Tariff Agreement). The legal system is a mix of Ottoman law, Napoleonic code and civil law. Lebanon has not accepted compulsory ICJ jurisdiction.
Checking National Laws Online
Website where certain Lebanese laws are listed.
Website of the Council of Ministers
Website of the Ministry of Finances
Site of the Bank of Lebanon (laws concerning the banking sector)

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Standards

National Standards Organizations
Lebanese Standards Institution
Integration in the International Standards Network
Standards are defined by the Lebanese Standards Institution Libnor. This institute is a member of the International Organization for Standardization ISO.
Classification of Standards
Standards are presented in the following way: LN then EN if it is a national standard, if it is an ISO standard then ISO is written, then the number corresponding to the product's field, then the year of its adoption.
Online Consultation of Standards
They are accessible on the Libnor website but the article is under construction.
Certification Organizations
Libnor is also competent for certification.

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Business Practices

General Information
Canada Agrifood Trade Service
Opening Hours and Days
Administrations and Banks are open from 8 am to 2 pm, Monday to Friday. Some banks stay open until 5 pm. Some of them are open from 8 am to 11 am on Saturday. Public administrations close on Friday at 11 am.
The liberal professions have flexible hours according to the nature of the work.
 

Public Holidays

New Year's Day 1 January
Feast of St Maroun 9 February
Labor Day 1 May
Feast of the Assumption 15 August
Independence Day 22 November
Christmas Day 25 December
The Good Friday according to the Catholic rite The Good Friday according to the Orthodox rite
The Good Friday according to the Orthodox rite Variable
Aid el Adha 70 days after the end of Ramadan, variable
Achoura Variable - 1 day
Muslim New Year Variable - 1 day
Birth of the Prophet Variable
The day of Ramadan Variable - 2 days
 
Holiday Compensation
There is compensation for Labor Day.
 

Periods When Companies Usually Close

Aid el Adha 2 days, 70 days after Ramadan.
Summer holidays It is not an official holiday period but everything slows down in August.
 

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Last Updates: October 2014