Notifications & Regulations – Page 15 – Aldic

MoF decision #722-1 dated 11 July 2024-Tax penalties reductions (1)

MoF Decision dated 08/07/2020 defining the new deadlines for the tax obligations after the 30th of July 2020 in application of the articles 1 and 2 of the Law No 160 dated 8th May 2020.

Posted on Monday July 13th, 2020 by citylog

The Ministry of Finance (MoF) has issued an information notice (here below) concerning the Minister decision dated 8^th July 2020 which defines the new deadlines for the tax obligations after the 30^th July 2020 in application of the articles 1 and 2 of the Law No 160 dated 8^th May 2020 (suspending the tax obligations between the 18^th October 2019 and the 30^th July 2020 without any delay tax penalty).

According to this MoF information notice, the tax obligations that didn’t reach their deadline on the 18^th October 2019 will still have their remaining period running after the 30^th July 2020 (e.g. the VAT declaration of the 3^rd quarter of the year 2019 had an initial deadline on the 20^th October 2019 with 3 remaining days from the 18^th October 2019, thus, the new deadline has been set on the 3^rd August 2020 which is 3 days after the 30^th July 2020, considering that the 2^nd August 2020 is a Sunday).

As for the tax obligations that had their deadline set during the suspension period (i.e. from the 18^th October 2019 till the 30^th July 2020), their new deadline will start running from the 31^st July 2020 with the same periods defined in the tax laws and regulations (i.e. the Partnerships & Establishments annual income tax declarations had to be filled 3 months after the closing date of their reporting period that was initially the 31^st March 2020 for the income tax declarations of the fiscal year 2019. Thus, the new deadline for the filling of their 2019 annual income tax declaration is set on the 31^st October 2020).

The same rule applies to the fiscal stamp duty that has to be paid within 5 working days from the date of the contract. Thus, the fiscal stamp duty on any contract signed during the suspension period has to be settled before the 6^th August 2020 (i.e. 5 days from the 31^st July 2020, excluding the Sunday).

Also, all the deadlines set in the Article 22 of the Budget Law 2020 that already extended the deadlines of the articles 21, 22, 28, 29, 30 and 32 to 40 of the Budget Law 2019 (i.e. discount on penalties, installment of late payments, extension of the tax objection deadline, real estate registration fees and exceptional revaluation of fixed assets) for 6 months till the 5^th September 2020, have been further extended till the 1^st February 2021.

This information notice also defines the new deadlines related to the built property tax (declaration of vacancy) and registration of rent contracts at the municipalities.

Download (PDF, Unknown)

MoF Instructions No. 1989/s1 dated 29/06/2020 relating to implementation of the exemption of funds and property devolved by donation or by will to religious communities and to legal persons belonging to them from the inheritance tax.

Posted on Monday July 13th, 2020 by citylog

The Ministry of Finance (MoF), has issued the here below Instructions No. 1989/s1 dated 29/06/2020 published in the Official Gazette No. 28 dated 02/07/2020 relating to the possibility of exempting funds and property devolved by donation or by will to religious communities and to the legal persons belonging to said sects from the inheritance tax.

In fact, according to these Instructions, the competent departments in charge of the inheritance tax, and within the framework of the study of the funds and property devolved by will or by donation to a non-heir and in particular to charitable organizations and sports, cultural or artistic or charitable associations are required – in accordance with the provisions of article 16 of the Inheritance & Gift Tax law (Legislative-decree No 146 dated 12/6/1959 with its amendments) – to exempt any donation or will up to /100,000,000/LBP and ensure concomitantly that any amount exceeding this value after deduction is subject to the inheritance & Gift Tax according to the rate provided for to the third category (ascendants other than parents, brothers and sisters) of taxpayers subject to the inheritance tax provided for in the table annexed to the Decree Law No. 146/59. The result of this is that funds and property devolved by donation or by will to religious communities and to legal persons belonging to the latter are therefore liable to the tax in the conditions than those stipulated herein.

Download (PDF, Unknown)

MoF Decision No. 236/1 dated 29/06/2020 relating to the principles of adjustment of penalties for tax infringements incurred between 01/08/2019 until 17/10/2020 (inclusive):

Posted on Monday July 13th, 2020 by citylog

The Minister of Finance, has issued the here below Decision No. 236/1 dated 29/06/2020 published in the Official Gazette No. 28 dated 02/06/2020, relating to the implementing provisions of the Law No. 662 dated 04/02/2005 allowing the Minister of Finance to carry out the adjustment of penalties for tax infringements incurred between 01/08/2019 and 17/10/2020 (inclusive).

This Decision grants taxpayers that are subject to penalties of collection rebates covering all tax infringements related to income tax, VAT, built property tax, inheritance tax and indirect taxes and fees that occurred until 30/09/2020 (inclusive).

The said penalties are reduced from the date of publication of this Decision till 30/09/2020 as follows:

Variable penalties are reduced by 85%,
Lump sum penalties are reduced by 60%.

It should be mentioned in this regard that the variable or the lump sum tax penalties of collection cannot be less than /50.000/LBP in any case after reduction.

The adjustment of any penalty with a value exceeding One billion Lebanese Pounds after reduction is subject to the prior approval of the Council of Ministers.

Besides, this Decision also grants taxpayers that are subject to penalties for delay in payment rebates covering all tax infringements related to either direct and indirect taxes and fees, including fiscal stamp duty and VAT, that are due or that shall be due within the implementation period of this decision, whether the delay in payment occurred before or after the entry into force of this decision or related to fiscal periods that the declaration deadline expired before 17/10/2020 (inclusive).

The delay in payment penalties are reduced for all tax infringements incurred during the above mentioned period by 75%.

The recovery services in charge of rebates of penalties of recovery and collection rebates shall proceed with the reduction upon the payment of the due amounts by the taxpayers and thus, according to recovery programs; provided however that said services shall organize monthly declarations related to the reduced penalties and submit them before the regional financial service.

Thus, according to this decision, the tax penalties rebates are applicable to all tax adjustments settled before 30/09/2020.

Download (PDF, Unknown)

MoF Decision No. 228/1 dated 22/06/2020 relating to the installment for payment of taxes withheld at source and value added tax (VAT).

Posted on Monday July 13th, 2020 by citylog

The Minister of Finance, has issued the here below Decision No. 228/1 dated 22/06/2020 published in the Official Gazette No. 28 dated 02/07/2020 (here below), relating to the installment for payment of taxes withheld at source and value added tax (VAT) due to taxpayers until 31/12/2018 in addition to the due fines and penalties. According to the said Decision, the first installment should represent at least 15% of the due taxes and the installment period should not exceed three (3) years.

Thus, the taxpayer is entitled to submit a tax installment request to the tax authorities, provided however that the value of the amount to be installed shall be greater than /1.000.000/LBP (One Million Lebanese Pounds) for individuals and individual enterprises and /3.000.000/LBP (Three Million Lebanese Pounds) for companies and thus, until 05/09/2020. In case of a failure to pay an installment, all the installments with their interest will be due in addition to a fine (late interest) of 12%.

Download (PDF, Unknown)

MoF Decision No. 208/1 dated 15/06/2020 relating to the implementing provisions of article 42 of the Law No. 144 dated 31/07/2019 (Budget Law 2019) relating to the cancellation of commercial companies and enterprise from the trade register as well as civil companies from the special register of civil companies

Posted on Monday July 13th, 2020 by citylog

The Minister of Finance, has issued the here below Decision No. 208/1 dated 15/06/2020 published in the Official Gazette No. 26 dated 18/06/2020 defining the implementing provisions of article 42 of the Law No. 144 dated 31/07/2019 (Budget Law 2019) relating to the cancellation of commercial companies and enterprise from the trade register as well as the cancellation of civil companies from the special register of civil companies.

According to this Decision, the following commercial companies and enterprises shall be cancelled from the trade register and special register relating to civil companies:

Commercial companies and enterprises which have not effectively carried out their activities since their incorporation and until the year preceding their statute of limitation.
Commercial companies and enterprises which have ceased their activities and did not have assets until the year preceding their statute of limitation and have no employees.
Commercial companies and enterprises which ceased their activities and liquidated their assets during the year preceding the year of their statute of limitation and have no employees.

The competent department before the Ministry of Finance shall verify if the aforementioned conditions are met by all available means.

In order to proceed with the cancellation of these companies and enterprises, these companies should not have debts towards third parties and should have paid all due taxes and penalties to the Ministry of Finance and the National Social Security Fund (NSSF) and to other public administrations and institutions for the periods during which they have carried out activities and prior to the year preceding their statute of limitation.

The Ministry of Finance establishes a list of companies and enterprises fulfilling the above conditions and transmits it to the NSSF as well as to the competent persons before the commercial register and thus, within three months following the date of publication of the Law No. 144/2019, who must submit their observations in this regard to the Ministry of Finance.

The Ministry of Finance publishes, within a maximum period of one month as of the notification of the response of the NSSF and the competent authorities before the commercial register, on its website and in the Official Gazette as well as in two local newspapers, a detailed declaration of the companies and enterprise which will be cancelled, and which will be republished again after the expiration of a period of fifteen days as of the date of the last publication.

Companies, owners of enterprises, public administrations and institutions as well as creditors may object the decision of cancellation before the Ministry of Finance and thus, within three months as of the date of the last publication.

The objection request must be submitted before the competent tax department of the Ministry of Finance, directly or by email and signed by the concerned person or by his legal representative, including the name and address of the concerned person, his registration number registration before the Ministry of Finance, the objection’s motives and the opponent’s requests. Documents justifying the objection must also be attached to the request, under penalty of rejection of the request in its form.

The objection is considered to be duly submitted:

On the date of its delivery to the competent department in the event that the request was filed by hand.
On the date as attested by postmark in the event that the request was sent by courier.
On the date of submission of the courier in the event that the request was sent by postal mail (recommended letter).

The cancellation procedure shall be suspended until the tax administration decides with respect to the Objection.

The concerned person may request the cancellation of the decision of the administration which rejected the objection, before the Council of State, within two months as of the date of notification of the decision, under penalty of rejecting the request in its form.

The Ministry of Finance undertakes to establish, notify and publish the list of companies and enterprises which should be canceled, within three months as of the beginning of each year, starting in 2020.

Download (PDF, Unknown)

Decision No. 193/1 dated 01/06/2020 relating to the determination of the implementing provisions of article 51 of the Law No. 497/2003 (income from movable capital).

Posted on Monday June 15th, 2020 by citylog

The Ministry of Finance (MoF), has issued the here below Decision No. 193/1 dated 1/6/2020 published in the Official Gazette No. 25 dated 11/06/2020 defining the implementing provisions of article 51 of the Law No. 497/2003 modified by virtue of Laws No. 64/2017 (article 17), No.79/2018 (article 36) and No.144/2019 (article 31).

According to this Decision, are subject to the Income Tax Law and to the tax provided for by Chapter 3 of the said Law, interest and income from movable capital resulting from:

1- Creditor accounts opened with banks operating in Lebanon, including savings accounts.
2- Bank deposits and commitments regardless of their currency, including those belonging
to non-residents. Such commitments include particularly:

 Deposit certificates issued by the Banque du Liban.
 Deposit certificates and debt securities issued by banks operating in Lebanon.
 Loans granted to banks operating in Lebanon, including those held by the Banque du
Liban.
 Documentary Credit insurance and guarantees.

3- Fiduciary accounts and investment portfolio management, including those established by virtue of Law No. 520 dated 6/6/1996 (development of the financial market and fiduciary contracts) or Law No. 234 dated 10 / 6/2000 (relating to the regulation of the financial intermediation profession)
4- Bonds and Debt securities issued by Lebanese Joint-Stock Companies.
5- Treasury Bonds in Lebanese currency, including those to which the Banque du Liban has
subscribed.

Thus, interest and income of movable capital derived by fiduciary accounts and investment portfolio management provided for in either clause 3 of paragraph 1 of article 51 of Law No. 497/2003 and its modifications, Laws No.520/1996 and No. 234 dated 10/6/2000, include inter alia the amounts resulting from the operations provided for in article 1 of the Law No. 520/1996 and article 2 of the Law No.234/2000 as well as the decisions rendered by the Central Bank (Banque du Liban) in this regard which are executed and implemented by banks, financial institutions and financial intermediation institutions for the benefit of their clients.

It should be noted in this regard that the following are exempted from the tax:

 Debtor accounts opened with banks operating in Lebanon on behalf of the Lebanese Government, municipalities and public institutions.

 Debtor accounts opened with banks operating in Lebanon on behalf of foreign diplomatic and consular missions.

 Interbank deposits which constitute deposits whose term does not exceed 15 days as from the date of their deposit by the deposited bank with the depositary bank.

The adopted rates relating to the calculation of the tax of all net income subject to the tax of article 51 of Law No. 495/2003 are as follows:

  

7% until 07/31/2019 (included).
10% as from 08/01/2019 and until 07/31/2022 (included).

7% as from 08/01/2022.

However, income from movable capital which is not subject to the tax provided for in article 51 of the Law No. 497/2003 and its amendments remains subject to the general tax at the rate of 10% as provided by article 72 of the Income Tax Law. However, revenues falling within the scope of this article but derived abroad by a Lebanese resident will be assimilated to the revenues from foreign movable assets (proceeds from foreign shares and debentures) in compliance with the provisions of article 77 of the Income Tax Law and subject to the tax at the general rate of 10%. .

Interest and income from movable capital subject to the tax provided for in article 51 of the Law No. 497/2003 and its amendments belonging to taxpayers subject to the income tax on the basis of real profit, remain subject to the tax provided for in article 51. This tax is however deductible from the net profit but the revenue should be added to the profit of the company subject to corporate income tax.

Concerning interest and income from movable capital subject to the tax provided for in article 51 of the Law No. 497/2003 and its modifications belonging to taxpayers subject to the income tax on the basis of deemed profit taxation (lump sum profit) according to article 44 of the Income Tax Law, such interest and income will be subject to the tax provided for in the said article 44 (i.e. it is considered as part of the taxable income subject to deemed profit taxation) after the deduction of the paid tax.

It is to note however that in order to avoid double taxation, it has been set forth that, in the assumption that a tax has been already withheld at source on the investments of the fiduciary accounts and investment portfolio management, the revenues distributed by the said structures to the beneficiaries will not be taxed again as regards to the tax of article 51 of the Law No. 497/2003. Besides, it should be highlighted as well that no set-off or compensation may occur between the revenues subject of the aforesaid article and any realized loss on other investments and transactions of movable assets.

Before paying the interest and capital income subject to the tax provided for in article 51 of the Law No. 497/2003, all institutions are required to withhold the due tax, declare this tax and pay it to the Treasury within fifteen days following the end of the month during which the withholding tax was effected, under penalty of being held responsible for the unpaid amounts in addition to a penalty for late payment provided for by the Law on Tax Procedures.

Download (PDF, Unknown)

MoF Decision No. 171/1 dated 2705/2020 relating to the extension of deadlines provided for the exchange of information for tax purposes

Posted on Monday June 15th, 2020Monday June 15th, 2020 by citylog

The Ministry of Finance (MoF) owing to the COVID 19’ circumstances, has issued and published the here below Decision No. 171/1 dated 27/05/2020 relating to the extension of deadlines provided for the declaration and sending of the required information by virtue of the Decree No. 1022 dated 07/07/2018 and its modifications relating to the exchange of information for tax purposes. Indeed and on the one hand, the deadlines provided for the declaration and sending by the financial institutions and banks of the information provided for in clause (3) of article 5 Decree No. 1022 for the year 2019 are exceptionally extended until September 30, 2020 instead of June 30 initially.

On the other hand, the deadlines provided for the transmission by the Ministry of Finance of information to the Partner States to which Lebanon is committed to automatically exchange financial account information (for the year 2019) provided for in clause (3) of article 5 of the Decree No. 1022 are also extended exceptionally until December 31, 2020 instead of September 30.

Download (PDF, Unknown)

MoF Decision No. 111/1 dated 17/03/2020 relating to the taxpayers’ obligation covered by the provisions of article 82 of the Income Tax Law to declare the income of foreign movable capital by electronic means.

Posted on Wednesday May 27th, 2020Wednesday May 27th, 2020 by citylog

The Ministry of Finance (MoF), has issued and published the here below Decision No. 111/1 dated 17/03/2020 relating to the declaration (tax return) of foreign movable capital’s income electronically. Indeed, all taxpayers (physical or legal persons) covered by the provisions of article 82 of the Income Tax Law, must exclusively declare, by electronic means and within the deadlines provided for in the aforementioned article, foreign movable capital income generated during the year 2019 and beyond (the years that follow).
Besides, taxpayers who do not have an account before the website of the Ministry of Finance (www.finance.gov.lb) can submit requests to obtain such account, by connecting to the aforementioned website, by filling the adopted registration form and submitting it electronically.
Similarly, the central department of taxpayers’ information and services, as well as the departments and branches of taxpayers’ services affiliated to the Revenues Directorate, shall provide taxpayers with electronic personal keys (username, password, code) which will entitle taxpayers to use the electronic declaration service.
Liban Post offices will stop receiving declarations on paper (form w4/c) relating to the income from foreign movable capital generated during 2019 and beyond, as of the entry into force of this Decision.

Download (PDF, Unknown)

MoF Decision No. 125/1 dated 22th March 2020 relating to the suspension of tax obligations and delays.

Posted on Monday May 25th, 2020 by citylog

The Ministry of Finance (MoF), has issued and published the here below Decision No. 125/1 dated 22/03/2020 relating to the suspension of tax obligations. Indeed, according to this Decision, the deadlines related to the taxpayers’ obligations and to taxes and fees collected and recovered by the Public Finance Departments, which have not been extended by virtue of decisions and whose deadlines expire between 03/03/2020 and the date of issue of a decision taken by the Ministry of Finance ending the general mobilization and thus, are suspended until the issuance of said decision.
The abovementioned suspension relates to the deadlines in connection with the following:

Concerning the deadlines related to taxpayers’ obligations:
The start of activity;
The modification of information;
The cessation of activity;
The submission of periodic and annual declarations related to all types of taxes and fees;
The payment of taxes and fees;
The recovery penalties charged to taxpayers who are not subject to a self-adjustment and self-reporting.

Concerning the deadlines related to the rights granted to taxpayers:
The response to the preliminary results assessment;
The objection to the tax adjustment before the Tax Administration;
The objection before the Objection (Appeal) Committee;
The filing of an appeal of the Objection Committee’s decision before the State Council.

Besides, the deadlines related to the obligations of the Tax Administration concerning their provided for by the Law on Tax Procedures and by other laws are also suspended, in particular the following:
The deadlines to address final adjustments in response to preliminary results assessment;
The deadlines to decide on the restitution requests submitted before the Tax Administration;
The deadlines to decide on the objections submitted before the Tax Administration;
The deadlines to appeal the decisions of the Objection Committee before the State Council and to prepare a reply.

Download (PDF, Unknown)

Decision No. 158/1 dated May 8, 2019 relating to the reportable Partner States

Posted on Monday May 25th, 2020 by citylog

The Ministry of Finance (MoF), has issued and published in the official gazette the here below Decision No. 158/1 dated 08/05/2019 which has updated the list of Partner States to which Lebanon is committed to automatically exchange financial account information of their resident taxpayers for the year 2020 and the following years (CRS/AEOI). Reminding that Lebanon will be entitled to receive same information about its residents once it reaches level 3 of the peer review of the Global Forum. This list includes till this date the following Partner States:

Argentina	Faroe Islands	Japan	Pakistan	Turkey
Australia	Finland	Jersey	Panama	United Kingdom
Austria	France	Korea	Poland	Uruguay
Azerbaïjan	Germany	Latvia	Portugal
Belgium	Gibraltar	Liechtenstein	Russia
Brasil	Greece	Lithuania	Saint Lucia
Canada	Greenland	Luxembourg	San Marino
Chile	Guernesey	Malaysia	Saudi Arabia
China	Honk Kong, China	Malta	Seychelles
Colombia	Iceland	Mauritus	Singapore
Croatia	India	Mexico	Slovak Republic
Cyprus	Indonesia	Monaco	Slovenia
Czech Republic	Ireland	Netherlands	South Africa
Denmark	Isle of Man	New Zealand	Spain
Estonia	Italy	Norway	Sweden