Author: citylog

Decision No. 2048/1 issued by the Ministry of Finance on 31/12/2018 (hereinafter), has defined the implementing provisions of articles 4 and 12 of the Law No. 57 dated 05/10/2018 (the Law on the Offshore Petroleum Fiscal Regime) as regards to the costs and expenses which may be deducted from the gross revenues paid by employers covered by the said Law No. 57 to their employees and which are subject to the tax on wages and salaries of Title II of the Income Tax Act. This concerns in particular, expenses and charges incurred under the performance of their duties as well as certain allowances, within the framework of predefined ceilings.

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Decision No. 2047/1 issued by the Ministry of Finance on 31/12/2018 (hereinafter), has defined the implementing of the fiscal stamp duties that applies on authorizations to occupy the public domain granted by the State and municipalities (item 4 of Annex 1 of Legislative Decree No. 67/1967 and its amendments) and as specified in the said Decision.

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Decision No. 2046/1 issued by the Ministry of Finance on 31/12/2018 (hereinafter), has defined the implementing provisions of article 6 of the Law No. 57 dated 05/10/2018 (the Law on the Offshore Petroleum Fiscal Regime) as regards to the investments undertaken by companies under the said Law in financial securities (particularly Hedging and Derivatives). This Decision subjects these operations and their results to the provisions of the Income Tax Law (Legislative-Decree No. 144 of 12/06/1959 and its amendments). Taxpayers must integrate all direct and indirect income and expenses resulting from these transactions and process them during the transition from the accounting result to the taxable result.

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The Ministry of Finance (MoF) has issued, by virtue of the enclosed Decision No. 2045/1 dated 31/12/2018 new forms to be adopted for the “beneficial owners”.

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Decision No. 2044/1 issued by the Ministry of Finance on 31/12/2018 (hereinafter), has defined the implementing provisions of sections (3) and (4) of article 13 of the Law No. 57 dated 05/10/2018 (the Law on the Offshore Petroleum Fiscal Regime) as regards to the procedures of declaration and payment of taxes on salaries and wages of resident employees working on behalf of non-resident employers. The said decision provides, on the one hand, for resident employees (as defined by the Code of Tax Procedures and the said Law No. 57), the obligations of registration near the tax authorities, tax calculation and quarterly payments which are in principle, in the responsibility of their non-residents employers (Title II of the Income Tax Act). This situation may be useful indeed to apply the same procedure for all similar cases in commercial, industrial and other activities. On the other hand, this Decision also requires resident employers who deal with non-resident parties performing work and services on the Lebanese territory through employees, to notify the Lebanese Tax Administration, within three months of the commencement of the activity, the name of said non-resident employees, to register them and to withhold at source the due tax in respect of the payments made to the latter and to pay it quarterly, until the concerned employee becomes a resident and is responsible himself for doing so under the provisions of the aforementioned section 3.

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Decision No. 2043/1 issued by the Ministry of Finance on 31/12/2018 (hereinafter), has defined the implementing provisions of article 10(2) of the Law No. 57 dated 05/10/2018 (the Law on the Offshore Petroleum Fiscal Regime) as regards to the withholding tax on payments due to non-residents. This Decision recalls that all companies and persons involved in the petroleum business are required to withhold the tax due in respect of payments made to non-residents in return of their services and to pay it on a quarterly basis unless the said company or person has a permanent establishment in Lebanon or has a tax residence thereof. Moreover, this Decision introduces a novelty which aims to expand the basis of resident and non-resident taxpayers by compelling local companies to obtain a fiscal number from the Lebanese Authorities for any non-resident natural person or legal entity with wish it deals and trades. It is to be noted that in accordance with the tax conventions aiming to avoid double taxation, duly ratified by Lebanon, contracting parties resident in the countries bound to Lebanon by these conventions will be entitled to recover taxes withheld at source through a request submitted within the non-prescribed deadlines.

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Decision No. 2034/1 issued by the Ministry of Finance on 31/12/2018 (hereinafter), has defined the implementing provisions of article 41 of the Budget Law No. 79 dated 18/04/2018 (exemption of the work contracts from the fiscal stamp duties). This Decision recalls that this exemption is limited to Lebanese employees and is conditioned by their regular registration at the National Social Security Fund (NSSF) on 19/04/2018 (and the preceding period). Moreover, this Decision subjects the work contract of employees registered after that date for the preceding period of employment, to the fiscal stamp duty in addition to the applicable penalties in the event of default or delay. It should be noted however, concerning the latter point, that the Decision has interpreted implicitly the intention of the legislator which had not provide a clear taxation in Article 41 for the period prior to 19/04/2018 concerning non-registered employees at the NSSF.

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Decision No. 2013/1 issued by the Ministry of Finance on 28/12/2018 (hereinafter), defines the implementation conditions of article 59 of the Law No. 379/2001 (Value Added Tax) regarding the VAT recovery for exempted transaction.

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Decision No. 2010/1 issued by the Ministry of Finance on 27/12/2018 (hereinafter), defines the implementation conditions of article 52 of the Law on built property tax (the Law of 17/09/1962) as amended by article 28 of the law No. 79 dated 18/04/2018 (Budget Law for 2018) that governs the allowances (deductions) that shall apply to residential properties. It states indeed that the annual deduction of /6.000.000/LP for each residential unit, up to two units throughout the Lebanese territory, shall apply till the end of the year 2017, whereas the annual deduction of /20.000.000/LP shall apply starting 01/01/2018. The implementation details are defined in the said Decision.

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