Auteur : citylog

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The Ministry of Finance (MoF) has recently replied to a request from the LACPA (Lebanese Association of Certified Public Accountants) for clarifications on the conditions for a Lebanese industrial company to benefit from 75% tax discount on the profit of its export sales according to the article 23 of the Budget Law of the year 2022.

 According to the article 23 of the Budget Law of the year 2022 (Law #10), profits generated from the export of Lebanese manufactured products by industrial companies will benefit from 75% discount on the related income tax if the proceeds of such export are transferred back to banks operating in Lebanon and reinvested in Lebanon or used in total for the purpose of its industrial activity in Lebanon. Industrial companies that meet these conditions can benefit from this increased tax discount rate (from 50% to 75%) for five years starting from the year of the publication of this Law (i.e. until the fiscal year 2026).

 In its recent reply to the LACPA dated 12^th November 2024 (attached a scanned copy of this letter with the reference #622/S2), the MoF has clarified the condition related to the transfer of the export proceeds to “banks operating in Lebanon” whereby it allows the industrial companies to use bank accounts opened in foreign countries to satisfy the other condition of using the proceeds of their export sales in total to purchase goods or equipment for the purpose of their industrial activity in Lebanon, within a short period of time that does not exceed a year.

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Désolé, cet article est seulement disponible en Anglais Américain. Pour le confort de l’utilisateur, le contenu est affiché ci-dessous dans une autre langue. Vous pouvez cliquer le lien pour changer de langue active.

The Ministry of Finance (MoF) has issued on the 30^th October 2024 the decision #1122/1 (attached a scanned copy) extending the following tax filing deadlines (previously extended till end of October 2024 by the MoF decisions #990, 991 and 959) till the 29^th November 2024:

1)      Further extension of the deadline for the filing and the payment of the Corporate Income Tax and the related Ultimate Beneficiary Owner (UBO) declaration of the fiscal year 2023.

2)      Further extension of the deadline for the filling of the annual declaration forms (including the UBO M18 form) for the year 2023 for taxpayers subject to income tax based on the lump sum regime (deemed profit basis) and institutions who are exempt from income tax (including associations and NGOs) and adopting the cash basis of accounting and the payment of the related tax as well as for submitting the annual non-resident tax (G5 form) due as per article 41 and 42 of the income tax law.

3)      Further extension of the deadline for the filling of the annual declaration forms (including the UBO M18 form) for the year 2023 for taxpayers subject to tax on a real profit basis (sole proprietorships, partnerships and institutions who are exempted from income tax and adopting the accrual basis of accounting) and the payment of the related tax as well as for submitting the annual non-resident tax (G5 form) due as per article 41 and 42 of the income tax law.

4)      Further extension of the deadline for the Tax on Sayrafa profits (article 93 of the 2024 budget law) filling and the payment of the related due tax.

5)      Further extension of the deadline for the Non-resident tax declaration of the 2^nd quarter of the year 2024 and the payment of the related tax.

6)      Further extension of the deadline for the tax declaration of multiplace taxpayers (R8) of the year 2023 and the payment of the related due tax.

7)      Further extension of the deadline for the annual tax on salaries declarations (R5,R6,R7) of the year 2023 and the payment of the related due tax.

8)      Further extension of the deadline for the Tax on salaries declarations of the 1^st and 2^nd quarters of the year 2024 and the payment of the related tax, knowing that the deadline for the Tax on salaries declaration of the 3^rd quarter of the year 2024 was already extended by the MoF decision #959 till the 29^th November 2024.

This decision also extended the deadline for the filing and the payment of the Corporate Income Tax and the related Ultimate Beneficiary Owner (UBO) declaration of the fiscal year 2023 for the companies that adopted a special fiscal year ending on the 31^st October 2024 till the 29^th November 2024.

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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 built 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 where 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 22^nd March 2024 two Memos setting in place the mechanism to declare and settle fiscal stamp duties till the 31^st December 2024 due to the shortage of sticker stamps in the market. Taxpayers should declare these fiscal stamps on paper forms (attached to these Memos) within 15 days following the month where these fiscal stamps were due through LibanPost and pay the related dues through commercial banks, money transfer companies or LibanPost.

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Désolé, cet article est seulement disponible en Anglais Américain. Pour le confort de l’utilisateur, le contenu est affiché ci-dessous dans une autre langue. Vous pouvez cliquer le lien pour changer de langue active.

Désolé, cet article est seulement disponible en Anglais Américain. Pour le confort de l’utilisateur, le contenu est affiché ci-dessous dans une autre langue. Vous pouvez cliquer le lien pour changer de langue active.

Désolé, cet article est seulement disponible en Anglais Américain. Pour le confort de l’utilisateur, le contenu est affiché ci-dessous dans une autre langue. Vous pouvez cliquer le lien pour changer de langue active.

Désolé, cet article est seulement disponible en Anglais Américain. Pour le confort de l’utilisateur, le contenu est affiché ci-dessous dans une autre langue. Vous pouvez cliquer le lien pour changer de langue active.

According to NSSF Memo #770 dated 15^th October 2024, employers should settle the end of service indemnity (EOSI) adjustment amounts of their employees in cash or by Fresh bank check starting from the 1^st November 2024.

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