Lebanon

Social security contributions

Social security contributions are the following:

• Borne by the employer: 8% for the maternity and sickness benefit schemes, on a maximum base of LL 45 million (amounting to LL 3,600,000 as a maximum per month), and 6% for the family benefit schemes, on a maximum base of LL 12 million (amounting to LL 720,000 as a maximum per month), in addition to 8.5% of total annual earnings for the end-of-service indemnity, with no ceiling.
• Borne by the employee: 3% for the medical scheme, on a maximum base of LL 45 million (amounting to LL 1,350,000 as a maximum per month).

Salaries of foreign staff are normally subject to all contributions, except those for the end-of-service indemnity fund. However, foreign employees do not receive the family allowance benefits nor do they benefit from the medical reimbursements.

On February 1, 2024, the NSSF issued Memorandum no. 740 whereby it set the exchange rate to be used for the conversion of the salaries paid in foreign currencies to the highest official exchange rate published by the Central Bank (currently LL 89,500/USD 1). 

In addition, starting March 2024, the Council of Ministers enacted Decree no. 12962 which increased the monthly ceiling amounts for sickness and maternity social security contributions to be 5 times the minimum monthly wage. 

The Ministry of Labour legislated a Decision no. 224, dated 12 July 2017, giving the right for the insured whose mandatory membership in the National Social Security Fund is terminated due to retirement (age 60 to 64) or due to permanent disability to benefit from the sickness and maternity scheme in accordance with the terms and conditions of the insured workers.

Consumption taxes

Threshold for registration at the VAT department:

Mandatory registration applies to importers and exporters regardless of their turnover, while voluntary registration applies to the taxable persons who achieve a turnover exceeding LL 100 million over a period of one to 4 consecutive quarters.

Those wishing to benefit from special cases of recovery of tax with regards to exempt transactions  shall apply a classification request to the Directorate of Value Added Tax to obtain a registration number and open a tax account allowing the submission of the refund requests.

Classified taxpayers are entitled to submit the refund request starting from the tax period during which they were classified until 31 December, once a year within a period of 20 days from the end of the calendar year, provided that the total refunded VAT amount is not less than LL 50 million (as per the 2022 Budget Law). Any additional amount will be carried forward to next year. The amount less than LL 5 million is carried forward to the following year.

The standard VAT rate in Lebanon is 11%. Unless specifically exempt, VAT is levied on all commercial transactions undertaken by business entities. Export of goods and services and export-related services, international transport, and some of the intermediate operations are zero-rated. Banking, financial services, and insurance operations are exempt from VAT.

The activities performed by nurseries from VAT are now exempt from VAT as per Article 56 of Budget Law 2019.

Sales of yachts, other boats, and pleasure craft with a length of more than 15 metres belonging to non-Lebanese also benefit now from the VAT exemption as per Article 65 of Budget Law 2019. The article also included diesel oil as goods exempt from VAT.

According to the 2022 budget law, fuel, industrial equipment, raw materials used in manufacturing and agriculture are exempt from VAT until 31 December 2024. Solar power equipment used to generate electricity are also exempt from VAT from 15 November 2022 until 31 December 2023 .

Any person who independently provides taxable or zero-rated supplies in the course of an economic activity and has a turnover that exceeds LL 150 million over four successive quarters becomes liable for VAT registration.

On 27 April 2023, the Ministry of Finance (MoF) published Decree no. 11230 in the Official Gazette, whereby Article 18 of the VAT Law no. 7308, which states that VAT should be calculated following the official exchange rate, was replaced to mention that in instances where the price of the service or good is denominated in foreign currency, and until a unified exchange rate is set, the counter value of the foreign currency to be used for VAT calculation purposes should be Sayrafa rate. 

Subsequently, on 15 February 2024, the 2024 Budget Law was published in the Official Gazette which introduced the following amendments. 

1. Any taxable person who achieves a total turnover  in excess of  LL 5 billion over a period of one to four consecutive quarters must register for VAT. 
2. Taxable persons whose total turnover was between LL 100 million and LL 5 billion during any of  the years 2020 to 2023, are no longer required to register for VAT, and may submit a request to deregister in case they have already registered for VAT. 
3. Persons whose turnover didn’t reach the threshold for voluntary registration and who engaged in contracts with governmental institutions involving transactions subject to VAT or exempt with the right to deduct VAT, can apply for registration with the VAT department if their total turnover exceeds LL 5 billion over one to four consecutive quarters.
4. Importers and exporters should register for VAT irrespective of their turnover.

Net wealth/worth taxes

There are no net wealth/worth taxes in Lebanon.

Inheritance, estate, and gift taxes

Estate and gift tax rates vary from 3% to 45%, depending on the amount received and the affinity to the deceased or donor after deducting special exemptions applicable to estate beneficiaries. These tax rates apply cumulatively to all gifts and inheritances made by a specific donor to a specific recipient.

Aids, grants and subsidies received from public funds as well as donations up to LL 14.4 million are exempt from all duties, unless the donee is a non-profit organisation, a sports association, educational, artistic or religious organisation, then the exemption should not exceed LL 900 million as per Article 57 of Budget Law 2022. 

Inheritance tax rates and exemptions are amended as per Article 56 and 59 of Budget Law 2022. 

Inheritance tax rates were further amended as per Article 50 of the 2024 Budget Law. 

Built property tax (BPT)

The BPT is an annual progressive tax, ranging between 4% and 14%, on built property.

The 2022 Budget Law amended the net income brackets subject to built property tax effective starting the year 2022. The brackets were further amended as per the 2024 Budget Law. 

Registration taxes

When transferring ownership of real estate, registration fees of approximately 6% are applicable. As of 26 October 2017, a 2% fee is considered part of the registration fee and should be paid within 15 days from the date the contract was concluded. The real estate should be registered during one year; otherwise, the 2% paid will no longer be recoverable.

Stamp duty

Two kinds of stamp duties are levied. A proportionate stamp duty of 0.4% is levied on all deeds and contracts (written or implied) that mention specific payments or other sums of money. A fixed stamp duty ranging between a minimum of LL 1,000 and a maximum of LL 2 million is applicable on documents in accordance with schedules appended to the stamp duty law.

The 2022 Budget Law amended the Stamp Duty Law to state that the fixed stamp duty due on invoices, receipts and debit and credit notes should be settled through monthly declarations within 15 days after the end of the month starting 1 January 2023. 

The Ministry of Finance issued Decision no. 684 on 23 November 2023 to clarify that the Sayrafa rate is the exchange rate that should be used to convert the value of contracts and deeds (and any other similar documentation) denominated in foreign currency into the local currency (LL) for the purpose of calculating the respective stamp duty.

The 2024 Budget Law amended the Stamp Duty Law to state that; provided the stamp duty fee does not exceed LL 3 billion, the duty can be processed by marking machines operated by authorised individuals. 

In addition, the 2024 Budget Law increased the fixed amount of stamp duty LL 100,000 on contracts that do not contain a specific amount and LL 20,000 on unpaid invoices.