Corporate - Deductions

Last reviewed - 04 April 2024


Depreciation of property, plant, and equipment (at rates fixed by ministerial decree) is deductible. The depreciation method to be used is the straight-line method. If a depreciation rate that is higher than the low rate is adopted, the MoF should be notified. The allowable depreciation rates are as follows:

Assets Low rate (%) High rate (%)
Buildings (commercial, touristic, and services) 2 5
Buildings (industrial and artisanal) 3 10
Buildings and constructions (commercial or industrial) 6 20
Freehold improvements and decorations 6 25
Technical installations and industrial equipment 8 25
Computer hardware and software 20 50
Vehicles (cars) 10 25
Vehicles (transport of goods/buses) 6 20
Sea transport 5 10
Air transport 20 25
Office equipment and furniture 8 25
Glassware and silverware (hotels, restaurants, etc.) Inventory at year-end Inventory at year-end
Gas cylinders 8 20


Under Lebanese tax rules, goodwill cannot be amortised.

Organisation and start-up expenses

Organisation and start-up expenses are amortised over three to five years for tax purposes.

As per the 2022 Budget Law, start-up companies are exempt from the income tax on profits for five years since inception if at least 80% of their employees are Lebanese nationals.

Interest expenses

Interest on business loans is deductible, under certain conditions. Interest paid on the taxpayer’s capital is not deductible.

Bad debt

Bad debts are deductible if all means for collection of the debt have been exhausted.

Provisions for bad debts are deductible if a debtor has been declared bankrupt. Surplus provisions are added to profits.

Charitable contributions

Charitable contributions are deductible if made to approved charitable, social, cultural, or sporting institutions, within certain limits.


Gifts given by the company in cash are non-deductible.

Gifts given by the company in-kind to customers when the amount of each gift exceeds LL 1 million per person per year and when the total amount of gifts in-kind exceeds 1% of the turnover are non-deductible.

Fines and penalties

Fines and penalties are not deductible in Lebanon.


Taxes and duties incurred in the course of business (except CIT) are deductible.

Taxes due to foreign governments on income earned in Lebanon are non-deductible.

Exceptional taxes and fines are non-deductible.

Other significant items

Other deductible expenses include:

  • Cost of goods sold.
  • Cost of services rendered.
  • Rent of business premises or, if the premises are owned by the taxpayer, their depreciation.
  • Salaries, wages, and other employee benefits, including end-of-service indemnities.
  • General business expenses, including insurance premiums.
  • Reserves for severance payments, pensions, and disability payments. Surplus provisions are added to profits.
  • Advertising and publicity expenses, within certain limits.
  • Travel, telephone, and vehicle expenses, within certain limits.
  • Entertainment expenses that are properly supported.
  • Board remuneration against services performed.
  • Accrued expenses as long as their occurrence is certain.
  • Employees’ life insurance premiums are deductible as long as they are included in the employees’ benefits subject to payroll tax.
  • Termination/severance payments granted to employees during the period between 1 July 2019 and 30 September 2022 as per the 2022 Budget Law.
  • Financial support payments/benefits granted to employees during 2022 as per the 2022 Budget Law.

Other non-deductible expenses include:

  • With the exception of normal maintenance expenses, costs that increase the value of the property, plant, or equipment (such costs should be capitalised and depreciated in accordance with the fiscal depreciation rates).
  • Losses or share-in-costs resulting from enterprises, offices, and branches situated outside Lebanon.
  • Representation allowances in excess of 10% of an employee’s basic salary, as well as unjustifiable and unreasonable salaries.
  • Personal expenses, such as payments deducted by an employer or partner for the management of the business and for certain business expenses incurred by the employer or partner.
  • Appropriations made to board members that do not comprise remuneration for work done.
  • Provisions, other than those specifically allowed by law. Examples of non-deductible provisions include provisions for bad debts, provisions for slow moving items, and provisions for bonuses, contingencies, and charges.

Net operating and capital losses

Tax losses may be carried forward for up to three years after the year in which they were originally incurred. The carryback of losses is not available.

The 2022 Budget Law stated that taxable losses related to 2020 can be carried forward for an additional year (i.e. 2024 instead of 2023).

Capital losses may be used to offset taxable profits of the current year but may not be carried forward.

Payments to foreign affiliates

Payments to foreign affiliates are generally subject to WHT.

Based on guidance issued by the MoF, recharges from the head office located abroad (including advertising) are deductible up to a certain limit, calculated as follows:

(Assets of the branch in Lebanon / Consolidated assets) x Central administrative expenses

However, a ceiling of 3% of the branch’s revenues is applied.