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 18 million (amounting to LBP 1,440,000 as a maximum per month), and 6% for the family benefit schemes, on a maximum base of LBP 3.425 million (amounting to LBP 205,500 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 18 million (amounting to LBP 540,000 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 MoL 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 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, and raw materials used in manufacturing and agriculture are exempt from VAT until 31 December 2024. Solar power equipment used to generate electricity is 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 LBP 150 million over four successive quarters becomes liable for VAT registration.
On 27 April 2023, the 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 the Sayrafa rate.
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 LBP 14.4 million, are exempt from all duties, unless the donee is a non-profit organisation, a sports association, or an educational, artistic, or religious organisation, then the exemption should not exceed LBP 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.
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 BPT effective starting the year 2022.
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% 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 1,000 and a maximum of LBP 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 MoF 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 (Lebanese pounds) for the purpose of calculating the respective stamp duty.