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Lebanon: Tax measures in budget law 2019

Lebanon: Tax measures in budget law 2019

Lebanon’s parliament passed the 2019 budget law that includes changes to the existing tax legislation.

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Among the tax amendments introduced by the Budget Law 143 (31 July 2019) are the following:

  • New payroll tax brackets were introduced effective from 1 August 2019— 
    • Taxable net income between 120 million LBP and 225 million LBP is subject to tax at a rate of 20%. [100 million LBP = approximately U.S. $66,000]
    • A 25% tax rate applies to the part of taxable net income exceeding 225 million LBP. 
  • New income tax brackets (for individuals and partnerships) were introduced effective from the fiscal year 2019—
    • Taxable income between 104 million LBP and 225 million LBP is subject to 21% tax rate.
    • A 25% tax rate applies for the part of taxable net income exceeding 225 million LBP.
  • Increased tax rate on “moveable capital”—the tax rate on bank interest, proceeds from deposits, interest on treasury bonds denominated in LBP, and other revenues was increased from 7% to 10% for a period of three years.
  • “Exceptional revaluation” of fixed assets—taxpayers subject to income tax can perform “an exceptional revaluation” (much like a mark-to-market process) of their fixed assets by paying tax at a rate of 3% provided the revaluation is completed before 31 March 2020, and exempted taxpayers covered by Article 45 of the income tax law can perform “an exceptional revaluation” of their fixed assets an pay tax at a rate of 2% provided the revaluation is completed by 31 December 2019.
  • Tax evasion defined—the definition of tax evasion was added to the tax procedure code.
  • New import duties on imported goods subject to VAT—a new import duty is imposed at a rate of 3% on imported goods that are subject to value added tax (VAT). Gasoline, industrial equipment, and raw material for industry and agriculture are exempted from this duty.

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