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 LBP 2.5 million (amounting to LBP 200,000 as a maximum per month), and 6% for the family benefit schemes, on a maximum base of LBP 1.5 million (amounting to LBP 90,000 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 LBP 2.5 million (amounting to LBP 75,000 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.
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.
Value-added tax (VAT)
The MoF issued the Decision no. 1101, dated 18 July 2017, which amended Article 8 of Decree no. 7365, dated 2 February 2002, for the application of Law no. 379, dated 14 December 2001, (VAT law) and applicable to institutions subject to Article 59 of the VAT Law.
Article 3 is amended as follows:
- Threshold for registration: Mandatory registration applies to importers and exporters regardless of their turnover, while voluntary registration applies to the taxable persons who achieve a turnover exceeding LBP 50 million during the past four consecutive quarters.
Article 8 is amended as follows:
- Those wishing to benefit from the provisions of Article 59 of the Law no. 379 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 LBP 5 million. The amount less than LBP 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.
Any person who independently provides taxable or zero-rated supplies in the course of an economic activity and has a turnover that exceeds LBP 150 million over four successive quarters becomes liable for VAT registration.
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.
Built property tax (BPT)
The BPT is an annual progressive tax, ranging between 4% and 14%, on built property.
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.
Two kinds of stamp duties are levied. A proportionate stamp duty of 0.4%, effective 26 October 2017, 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 LBP 250 and a maximum of LBP 2 million is applicable on documents in accordance with schedules appended to the stamp duty law, effective 26 October 2017.