Lebanon

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

Limited companies and limited liability companies are taxed on their profits at a 15% rate. Individuals and Partnership companies are subject to tax on profits, after deduction or family allowances, on a progressive scale as follows:
of 0 to 9,000,000 LBP: 4%
of 9,000,000 to 24,000,000 LBP: 7%
of 24,000,000 to 54,000,000 LBP: 12%
of 54,000,000 to 104,000,000 LBP: 16%
Beyond 104,000,000 LBP: 21%

However, holding and off-shores companies benefit from exceptional conditions: holding companies are taxed at a percentage of their capital+reserves and which can not exceed 5,000,000 LBP. Offshore companies are taxed at a forfeiting amount of 1.000.000 LBP.

Moreover, since 2000, a yearly forfeiting tax is levied for each establishment of a SA (2.000.000 LBP) and of a SARL (750.000 LBP).

   
Tax rate on long-term capital gains Capital gains are taxed at the rate of 10%.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies The tax on dividends rate is 5% when the company is exempted from the corporate tax. However, dividends shared by holdings and offshore companies are tax-exempted.
   
Tax rate on branches The corporate tax is levied on branches in Lebanon in the same way as any other companies. Profits earned by branches of foreign companies are deemed to be distributed dividends and are subject to 10% distribution tax on the amount of the profit after deduction of business income tax.




Income tax

Fiscal year The fiscal year begins on January 1st and ends on December 31st of the same year.
   
Income tax rate The tax rate on wages, salaries and benefits is progressive (held to source by the employer) ranging from 2% to 20%. In 1999, Tax Shedule was:
From 0 to 6,000,000 LL2%
From 6,000,000 to 15,000,000 LL4%
From 15,000,000 to 30,000,000 LL7%
From 30,000,000 to 60,000,000 LL11%
From 60,000,000 to 120,000,000 LL15%
Beyond 120,000,000 LL20%
   
Tax deductions or other allowances There are abatements according to the domestic situation:
Single individual: 7.5 millions LBP
Married Couple: 10 millions LBP
Married Couple (spouse works): 7.5 millions LBP each
Children: 0.5 millions LBP per child.



VAT rates

Standard rates 10%
   
Reduced rates Some items are VAT exempted or zero-rate taxed.



Other important taxes


Name of tax
Rate
Stamp duties  
0,015% to 0,03%.  
Tax of land transfer  
6%  
Municipal tax  
6,5% to 11,5%  
Successions and donations  
3% to 33%  


 

Accounting

Introduction
After 16 years of civil war, Lebanon is engaged in a phase of reorganization of its economy. This reorganization implies notably the fixation of precise accounting standards. These standards are strongly inspired with those of the IASC, in spite of some discrepancies specific to the country.


Obligations and publications
Lebanon has established accounting and financial obligations by means of decrees. Annual financial reports must be realized in accordance with the current standard. They must include:
- A balance sheet
- A profit and loss account
- An appendix
- A cash flow statement.

Certification and auditing
The control of accounts is compulsory and must be made by an independent auditor 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.

Professionals and representative organizations
The "Lebanese Association of Certified Public Accountants" ( LACPA).



Useful links
For further information, please contact the Ministry of Finance of Lebanon.

Last modified in 2006 - ongoing update
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