Author: citylog

Further extension of the deadline for the declaration of the income from foreign movable assets of the fiscal year 2022 according to the article 82 of the Income Tax Law till the 30^th June 2023 inclusive.

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Further extension of the electronic filling and paying the built property tax of 2022 for taxable amounts exceeding LBP 40 million till the 30^th June 2023 inclusive.

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Further extension of the deadline for the filling and payment of the personal annual employees’ income tax return (R8 form) for the year 2022 till the 30^th June 2023 inclusive.

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Further extension of the deadline for the annual tax on salaries declarations (R5,R6,R7) the year 2022 and the payment of the related due tax (if any) until the 30^th June 2023 inclusive.

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Further extension of the deadline for the filling and payment of the annual Corporate Income Tax with the related Ultimate Beneficiary Owner (UBO) declaration of the fiscal year 2022 until the 30^th June 2023 inclusive.

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The Ministry of Finance (MoF) has issued on the 15^th May 2023 the decision #323/1 (attached a scanned copy) in application of the article 39 of the Budget Law 2022 (Law #10). According to this article of the Budget Law 2022, the capital gain (i.e. difference between the acquisition cost and the effective selling price) generated by individuals from the transfer of their shares in the following joint-stock companies (SAL) are subject to a tax equal to the transfer and registration fees on real estate properties (i.e. 3% for Lebanese nationals and 5% for foreigners):

1)      Companies whose sole or main object is to own lands or build properties.

2)      Companies whose main activity is trading real estate properties or real estate development.

3)      Companies with real estate properties (net value after depreciation) exceeding 50% of their total fixed assets.

A 50% discount on the tax due is applied if the transfer of shares is concluded between shareholders (including legal entities) or with their direct relatives (lineal ancestors or descendants) but excluding spouses.

The capital gain generated by individuals in other joint-stock companies (SAL) is exempted from this tax while capital gain generated by partners (including non-residents) in limited liability companies (SARL) is subject to capital gain tax according to the article 45 of the Income Tax Law with the obligation to declare this capital gain and pay the related tax within 2 months from the notarized transaction date.

Shareholders are allowed to do an exceptional revaluation of their shares for one time only before the 30 June 2023 to be performed by a certified public accountant member of the LACPA. The revaluation of the shares has to be done in Lebanese Pounds at their effective value at the publication date of the Budget Law 2022 (i.e. 15^th November 2022).The revaluation variance is subject to 1% tax.

The seller has the obligation to declare the transfer of shares transaction and pay the related taxes within a period of two months from the transfer date according to new declaration forms to be prepared by the MoF, knowing that both the seller and the buyer are jointly liable to pay the taxes resulting from this transaction. The effective selling price of the shares has to be based on the company’s financial statements of the year preceding the transfer and the tax authorities have the right to challenge and modify the selling price according to the article 10 of the tax procedures law (Law #44).

The holding and offshore companies are exempted from capital gain tax on the transfer of shares in foreign companies while the holding company is also exempted from capital gain tax on the transfer of shares in Lebanese affiliated companies if these shares were held for more than two years.

The share transfer agreements are subject to the 4‰ fiscal stamp duty.

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The Ministry of Finance (MoF) has issued on the 15^th May 2023 the decision #322/1 (attached a scanned copy) in application of the article 87 of the Budget Law 2022 (Law #10) related to the tax on income generated from foreign movable assets based on the articles 81 and 82 of the Income Tax Law.

According to the article 87 of the Budget Law 2022, the 10% tax on the income generated from foreign movable assets should be paid in the same currency (USD, EUR or other currencies converted to USD) starting from the 15 November 2022 [i.e. starting from the year 2022). Each currency should be declared separately (i.e. all income in USD are declared together while the income in EUR are declared in another declaration and the income in other currencies such as GBP or CHF should be converted to USD and also declared separately. These tax declarations should be done electronically according to the new forms established on the website of the Ministry of Finance and the related tax paid in the same currency in cash or transferred to the “external fresh accounts” of the Ministry of Finance opened at the Central Bank with the accounts numbers by currency specified in the attached MoF decision.

The deadline for submitting the declaration on the income from foreign movable assets of the year 2022 and paying the related tax (in Fresh currency) has been postponed till 31 May 2023 (inclusive). However, the new tax declaration form (ث4/ج) is not yet available on the Ministry of Finance’s website to enable the taxpayers to submit their tax declarations.

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