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Tax rates in Lebanon

Tax Rates

Consumption Taxes

Nature of the Tax
VAT (Value-Added Tax)
Tax Rate
11%
Reduced Tax Rate
Export of goods and services and export-related services, international transport, and some of the intermediate operations are zero-rated.
Other Consumption Taxes
Excise taxes are levied on certain beverages and spirits, tobacco products, gasoline, and vehicles.
Inheritance and gift tax rates vary from 3% to 45%, depending on the amount received and the affinity to the deceased or donor after deducting special exemptions applicable to estate beneficiaries. These tax rates apply cumulatively to all gifts and inheritances made by a specific donor to a specific recipient.

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Corporate Taxes

Company Tax
17%
Tax Rate For Foreign Companies
Lebanon adopts a territorial tax system under which all income sourced in Lebanon is subject to tax in the country (while income derived from foreign sources is not subject to tax in Lebanon).
For resident companies, corporate income tax is computed at 17% based on the taxpayer’s accounting profits after adjustments resulting from tax rules (i.e. "real profit method"); while for non-resident companies a withholding tax applies at 2.25% on payments for goods and 7.5% on payments for services.
Branches in Lebanon are taxed in the same way as subsidiaries and branches of foreign entities are subject to an additional 10% remittance tax, regardless of whether profits actually are remitted.
Offshore companies are subject to an annual lump-sum tax of LBP 50 million.
Capital Gains Taxation
Capital gains on the sale of assets (tangible, intangible and financial) are taxed at a rate of 15%. The rate goes up to 20% for the assets of oil and gas companies.
Income from the disposal of shares realised by a company whose main activity is the acquisition of investments is subject to 17% corporate income taxation.
The Budget Law of 2022 has authorized taxpayers to re-evaluate their fixed and real estate assets, which were recorded in their books prior to 1st January 2022. The primary objective of this provision is to adjust for the impact of monetary inflation arising from fluctuations in the value of such assets. Any positive gains arising from this revaluation will be subject to a 5% tax for fixed assets and 3% for real estate. These taxes will be payable within two months from the date of revaluation. If any asset is disposed of within three years of the revaluation, then the gain realized from the sale will be subject to capital gains tax. This tax will be calculated based on the difference between the disposal value and the asset's value before the revaluation.
Main Allowable Deductions and Tax Credits
Organisation and start-up expenses are amortised over a period of three to five years.
Interest on business loans is deductible (under certain conditions), while interest paid on the taxpayer’s capital is not. Bad debts are deductible if all means for collection of the debt did not succeed. Provisions for bad debts are deductible if a debtor has been declared bankrupt. Gifts given by the company in-kind to customers when the amount of each gift exceeds LBP 1 million/person/year and when the total value of gifts in kind exceeds 1% of the turnover are non-deductible.

Employees’ life insurance premiums are deductible as long as they are included in the employees’ benefits subject to payroll tax. Other deductible expenses include: rent of business premises or their depreciation if the premises are owned by the taxpayer; reserves for severance payments, pensions, and disability payments; advertising and publicity expenses (within certain limits); travel, telephone, and vehicle expenses; etc.
Charitable contributions are deductible when made to certain organisations.

Net operating losses can be carried forward up to three years (extended to four years for taxable losses related to 2020, indefinitely for oil and gas companies). The carryback of losses is not permitted.
With the exception of the corporate income tax, taxes and duties incurred in the course of business are deductible.

Other Corporate Taxes
Employers are responsible for withholding and declaring payroll taxes on behalf of their employees. Payroll tax is levied at progressive rates of 2% to 25% (for the bracket in excess of LBP 675 million per year). Social security contributions are borne by the employer, as follows: 8% for the maternity and sickness benefit schemes (on a maximum of LBP 5.6 million per month), and 6% for the family benefit schemes (on a maximum of LBP 3.425 million per month), plus 8.5% of total annual earnings for the end of service indemnity (without any limit).

A built property tax is levied on rental income from Lebanese real property, at rates ranging between 4% and 14%. When transferring ownership of real estate, registration fees of approximately 6% are applicable. A 5% transfer tax is imposed on the fair value of real estate transferred.

A 0.4% stamp duty is levied on most contracts. A fixed stamp duty ranging between LBP 1,000-2 million is applicable on documents in accordance with schedules appended to the stamp duty law. Stamp duty is also levied on the capital subscription and capital increase. Fixed stamp duty of LBP 5 million is levied on oil and gas companies for exploration and production agreements.
An annual lump-sum license fee applies at the following rates: LBP 2 million for joint stock companies, LBP 750,000 for limited liability companies, LBP 550,000 for establishments assessed based on real profit, and LBP 50,000 for taxpayers assessed on assumed profits. Offshore companies are subject to an annual lump-sum tax of LBP 50 million, the same as for holding companies.

Country Comparison For Corporate Taxation

  Lebanon Middle East & North Africa United States Germany
Number of Payments of Taxes per Year 20.0 20.8 10.6 9.0
Time Taken For Administrative Formalities (Hours) 181.0 204.0 175.0 218.0
Total Share of Taxes (% of Profit) 32.2 32.1 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Individual income tax rates 2023 rates
From LBP 0 to 18,000,000 2%
From LBP 18,000,000 to 45,000,000 4%
From LBP 45,000,000 to 90,000,000 7%
From LBP 90,000,001 to 180,000,000 11%
From LBP 180,000,001 to 360,000,000 15%
From LBP 360,000,000 to 675,000,000 20%
Above LBP 675,000,000 25%
Non-resident tax (withholding) 2.25% of the revenue from sale of materials and equipment
7.5% of the revenue in the case of sale of services
Income, revenues, and interest earned from accounts opened at Lebanese banks and from treasury bonds 7% withholding tax (10% until 31 July 2022)
Allowable Deductions and Tax Credits
Individuals are entitled to family deductions from LBP 37.5 million to LBP 62.5 million, based on the taxpayer's family status.

Certain expenses are tax-deductible: payments to pension schemes; scholarships or payments granted by an employer on the birth of a child, on marriage, or death, provided they are granted to all employees and have been approved by the Ministry of Labour; end-of-service indemnities paid in accordance with the relevant laws and regulations; transportation allowances of LBP 65,000/day (LB 95,000/day for the private sector); annual schooling allowance of a maximum total amount of LBP 4 million and for a maximum of three children; reimbursements for expenses and representation allowances below 10% of the basic salaries of managerial staff.

Special Expatriate Tax Regime
Income tax in Lebanon is levied on all persons or entities, whether or not residing in Lebanon, on income or profits derived in Lebanon.
Revenues earned by non-residents in Lebanon are subject to a withholding tax at a rate of 2.25% of the revenue in the case of sale of materials and equipment and 7.5% in the case of sale of services.
stead of being included in the annual income tax filing, nonresident tax is required to be paid on a quarterly basis, with payment due within 15 days following the end of each quarter.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Tax treaties signed by Lebanon
Withholding Taxes
Dividends: 10%; Interest: 10%; Royalties: 0% (residents)/7.5% (non-residents).

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Sources of Fiscal Information

Tax Authorities
Overview of Lebanon's tax measures in response to Covid-19

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Latest Update: February 2024

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