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Please be informed that the Ministry of Finance (MoF) has issued the decision #721/1 dated 3rd October 2023 published in the Official Gazette #42 on 12th October 2023 (attached a scanned copy) in application of the articles 23, 25 & 26 of the Law #10/2022 (Budget Law of the year 2022).
Application of the articles 23 of the Law #10/2022: 75% income tax exemption on industrial exports
According to this MoF decision, net profit generated from the export of Lebanese manufactured products by industrial companies will benefit from a 75% discount on the related income tax for 5 years starting from 1/1/2022 till 31/12/2026 if (i) the proceeds of such export are transferred back to banks operating in Lebanon (with the proof of the Fresh bank account statement) and (ii) reinvested in Lebanon or used in total for the purpose of its industrial activity in Lebanon (with the related proofs). The tax discount will be reduced to 50% starting from 1/1/2027 if the industrial companies continue to abide by the above mentioned conditions.
It is worth noting that the industrial companies that used to benefit from the 50% discount on the net profit of their export sales according to the Law #248/2014 will no longer benefit from this exemption starting from the 15/11/2022 (i.e. publication date of the Budget Law 2022).
The industrial companies that just import and exports goods not produced in Lebanon, or repackage those goods or export services and expertise (except IT programs), as well as industrial companies exporting extracted resources such as cement, oil & gas, etc. or even bottled mineral water cannot benefit from this exemption.
Application of the articles 25 of the Law #10/2022: 100% income tax exemption for Startups
According to this MoF decision, Startup companies established within 5 years from the publication date of the Budget Law 2022 (i.e. between 5/11/2022 and 15/11/2027) shall benefit from a total income tax exemption for a period of 5 years starting from their date of incorporation provided that at least 80% of their employees are Lebanese during all these years. If this ratio is not reached, it loses the right for this tax exemption for the related year and the following years. Are considered as Startup companies any newly incorporated company that innovates with a new high-tech product or service that fills a market gap or is irreplaceable.
Application of the articles 26 of the Law #10/2022: 100% income tax exemption for new industrial & commercial companies established in regions to be defined by the Government
According to this MoF decision, industrial and commercial companies incorporated after the publication date of the Budget Law 2022 and up to the 31st December 2024 and operating in regions that the Government wishes to develop should benefit from a total income tax exemption for a period of 7 years (in addition to a total exemption of construction fees and 50% discount on the registration and annual traffic fees on their vehicles) provided that their invested capital should be at least one million [Fresh] US Dollars and they employ at least 50 Lebanese representing 60% of their total employees.
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