Tax is levied on all corporeal/natural and incorporeal/artificial persons, resident in Lebanon or outside, on all profits that they generate in Lebanon. The main premise for considering profits to have been realised in Lebanon is when such profits have occurred from an effort exerted in Lebanon, irrespective of the identity of the taxpayer or place of residency.
Tax is levied on profits generated by two categories of taxpayers: resident taxpayers and non-resident taxpayers.
The Lebanese Parliament legislated a new Law no. 60, dated 3 November 2016, relating to the amendment of Law no. 44, Tax Residency in Lebanon, including that any company is considered tax resident in Lebanon if it has:
- been established according to the Lebanese laws
- been registered according to the Lebanese laws, or
- a place of business in Lebanon.
Non-resident taxpayers can consist of persons residing in Lebanon and persons residing outside Lebanon. A corporeal person residing in Lebanon is subject to the non-resident WHT (see the Withholding taxes section for more information) if neither of the following two terms are satisfied:
- Practise a certain trade in a normal and repetitive manner in Lebanon, irrespective of whether or not they have a known registered place of business.
- Have a known registered place of business in Lebanon.
A person residing outside Lebanon is subject to the non-resident WHT on the amounts, revenues, profits, or proceeds obtained from Lebanon as a result of undertaking an activity in whole or in part on Lebanese territory or as a result of exploiting rights in Lebanon.
Permanent establishment (PE)
There are no clear provisions in the Lebanese income tax law to define PE.