A legal entity which is considered a resident of Lebanon (meaning that it is set up or registered under the local legislation), or which is doing business from a fixed office in the country for more than 6 months in any 12 consecutive months in public contracting projects is taxed on its worldwide income in Lebanon. Exception to this rule are the foreign branches and subsidiaries.
In this article, our company formation agents in Lebanon present the taxation system in Lebanon.
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The taxation for companies in Lebanon
The income tax in Lebanon is applied on the taxable income connected with all the business operations, unless there is an exemption provided by the local legislation.
The taxable income is calculated as being revenue minus the eligible expenses, except for insurance businesses, public contractors, oil refineries and global transportation companies. Our Lebanon company formation consultants can provide further information on this matter. We can also help you open a company in Lebanon.
For these exceptions, the taxable income is calculated as a percentage of the entire revenues.
The income taxes in Lebanon include:
• The corporate tax on profits: it is set at 17% for companies and between 4% and 21% for private persons;
• Taxes on wages and salaries (the Payroll Tax): it stands at between 2% and 20% at the present;
• Taxes on income for movable capital: it is set at 10%.
Dividends in this country which are received from a foreign company are taxed with 10%. Dividends which are received from a local company are deducted from the taxable income for the income tax calculation.
The capital gains which derive from the disposal of tangible and intangible assets, as well as financial assets, are taxed in Lebanon with a rate of 10%.
Exceptions and reliefs from taxes in Lebanon
In Lebanon, there are certain exceptions and reliefs from taxes, among which our company registration agents in Lebanon would like to mention:
• Exemptions from the corporate taxes on profits for holding entities, offshore businesses, education institutions, hospitals, cooperative associations, trade unions, local air and sea transportation businesses and touristic entities;
• A 30% reduction for the taxable salary for foreign employees which are hired in offshore businesses when they work in the country;
• An exemption from acquitting the social security contributions for foreign citizens if they are working in the country as a result of a contract signed abroad with foreign companies and if they have a similar benefit in their countries of origin.
If you have more questions about the taxation schemes in Lebanon, or for help in opening offshore companies in Lebanon, please contact us.