According to the principle of territoriality, taxes on salaries are due in Lebanon if one of the following conditions is met:
- The beneficiary of the salary is resident in Lebanon, regardless of the source of funding.
- The services that triggered the income are executed on Lebanese territory or have contributed to the welfare of a company located in Lebanon, even though the source of funding is outside Lebanon.
- The source of funding is in Lebanon, regardless of where the beneficiary resides or where the effort was made.
Personal income tax rates
Personal income tax (PIT) is levied on wages and salaries at progressive rates between 2% and 20% and on business income (e.g. sole proprietorships, general partnerships) at progressive rates between 4% and 21%. See Business income in the Income determination section for more information.
Tax on capital gains and investment income
A new Law no.64 dated 26 October 2017 introduced new tax measures related to the capital gains on disposal of real estate (not other types of fixed assets) that is taxed at 15% instead of 10% (N/A for individuals up to two principal residency and if owned more than 12 years.
Tax on interest
Income, revenues, and interest earned from accounts opened at Lebanese banks and from treasury bonds are subject to a 7% withholding tax (WHT).
Tax on piecemeal compensation
Lump-sum wages paid to labourers and wage earners in an ad hoc manner to undertake temporary work on a piecemeal or quantity basis are taxed at 3%, regardless of their magnitude and without any deductions.
Revenues earned by non-residents in Lebanon are subject to an effective tax rate of 2.25% of the revenue in the case of revenue from sale of materials and equipment and 7.5% of the revenue in the case of sale of services. The non-resident tax is a WHT.