Guide to Lebanon Tax Law Research

Transcription

1 October 2004 Guide to Lebanon Tax Law Research 1. In general In addition to detailing the sources of Lebanese tax laws, the following guide provides information on the availability and accessibility of tax law texts, in hard copy format and through the web. Lebanon is a unitary country, and the power to levy taxes is held by the parliament. There are both national and municipal taxes in Lebanon, the first kind being collected by the Tax Administration, while the latter is collected by the municipalities themselves. Laws establishing municipal taxes are passed by the parliament. 2. Constitution The Constitution of the Lebanese Republic dated May 23, 1926, as amended in 1947, contains only a few provisions directly relevant to taxation. Articles 81 and 82 state that no tax can be established, amended or canceled without a law; and that taxes are to be applied on all the Lebanese territory without any exception. Article 83 and the following articles state the budget approval procedure within the parliament. There are no provisions directly relating to equality when it comes to taxes, but article 7 of the Constitution stipulates that all Lebanese nationals have the same public rights and obligations, establishing equality before the law. The Constitutional Court has only rarely applied this provision in the tax area, with the exception of the 2002 decision concerning the Value Added Tax (VAT), in which members of parliament were granted an exception from the VAT. 3. Legal System & Language The Lebanese legal system is a civil law system, originally heavily influenced by the French legal system. Today, the legal system has evolved such that tax laws of different countries (civil law countries and common law countries) are considered in drafting Lebanese bills. The official language of Lebanese legal acts is Arabic. Unofficial translations of a few tax laws are available in French and/or English and published by ARGUS Bureau of Lebanese and Arab Documentation (Phone numbers or , fax number: ).

2 4. Publication of Laws All Lebanese laws are published in the Official Gazette (O.G.) of the Lebanese Republic as a final step before their entry into force. The O.G. is usually issued every Thursday, in addition to some extraordinary issues. The O.G. includes texts of laws, decrees, ministers' decisions, and Constitutional Court decisions. Information regarding subscription to the O.G. is available at An official website for the O.G. is under construction. Meanwhile, issues of the O.G. can be bought either at Sader Printing, (Phone numbers: and ) or at Aybeks Printing, I. & H. Mneymeh & Cie (phone numbers: /3) (depending of the year of issuance requested). 5. Tax Administration and Procedure The Tax Administration which is one of the Directorates of the Ministry of Finance, is governed by the Decree-Law N. 2868, dated December 16, 1959 and amended subsequently by several laws. The Decree-Law defines the organization of the Ministry, Whish is divided into Directorates, Departments, and Units, and assigns to each its tasks and mission. 6. Tax Laws In addition to the below mentioned laws, Budget laws include provisions amending existing taxes or creating new ones. Budget laws are published in the O.G. The amending provisions are usually incorporated in the last version of the text of the law concerned Direct Taxes Income Tax: Legislative Decree N. 144 dated June 12, 1959 as amended. Available in the original Arabic version in the O.G. or in the hard copy compilations. It is also available in English and French at Argus. Related declaration forms and guides are available in Arabic and can be downloaded from: Income Tax on Holdings: Decree Law Nº 45 (June 24, 1983) Income Tax on Offshore Companies: Decree Law Nº 46 (June 24, 1983) Tax on Interests from Financial Income: Established by article 51 of law N. 497 dated 30/1/2003 published in the O.G. N. 8 dated 31/1/2003, and amending the third Chapter of the Legislative Decree N. 144, and its application decision N. 403/1 dated 18/3/2003. Inheritance Tax: Legislative Decree N. 146 dated June 12, 1959 with amendments. Available in the original Arabic version in the O.G. or in the hard copy compilations. Related declaration forms and guides are available in Arabic on: Built-Up Property Tax: Law dated September 17, 1962 amended. Available in the original Arabic version in the O.G. or in hard copy compilations. It is also available in French at Argus. Related declaration forms and guides are

3 available in Arabic on: Investments Promotion: Law N. 360 dated August 16, 2001 and published in its original Arabic version in the O.G. N. 41 dated August 18, This law provides for tax incentives. The English version is available at Indirect Taxes Value Added Tax: Law N. 379 dated December 14, 2001, and published in issue N. 63 of the O.G. dated December 24, Related regulation (implementation Decrees and circulars) is published in the O.G. N. 5 dated December 30, The law is also available in Arabic, English and French on You can find the Arabic version of the Decrees at the same website. Stamp Duty: Law Decree Law N. 67 dated August 5, 1967 amended by several subsequent laws. Related forms and guides are available in Arabic at Excise Taxes: Laws on excise and similar taxes are established on some products and services. Related forms and guides are available in Arabic at All laws establishing an excise tax are reproduced in the hard copy compilation of the laws under the "indirect taxes" section. Specific laws are as follows: 1. Tax on alcoholic beverages enacted by a law dated of 7/6/ Tax on hotels accommodation and food and beverages in restaurants not liable to VAT, enacted by article 43 of the budget law of 2001 Nº 326 dated 28/6/ Entertainment tax imposed by the decree law Nº 66 dated 5/8/ Departure tax imposed by the law Nº 27/67 dated 8/5/ Gambling tax imposed by the law dated 5/3/ Tax on electronic games imposed by the law Nº 24/75 dated 14/8/ Tax on video films imposed by the law Nº 7/85 dated 10/8/ Tax on the entrance of the Jeita grotto imposed by the decree Nº 538 dated 1/2/1971. Municipal Fees: Law N. 60/88 dated 12/8/1988. It covers the fees that municipalities are authorized to levy and collect. Custom Duties: Related laws and regulations, available at Procedure Tax Collection Act: Decree law Nº 147 (June 12, 1959) and following amendments.

4 8. Treaties The names of countries and status (i.e. dates of signature, ratification, and entry into force) of the Conventions for the Avoidance of Double Taxation signed by Lebanon as well as the related legal reference (i.e. the number and date of issue of the ratification law and the number and date of the issue of the O.G. in which it is published) and full text of the treaty, are available at the Ministry's website at 9. Administrative Circulars and Guides Decisions and circulars related to all direct taxes are published in the Arabic language in a compendium "Majmou't EL Yafi". VAT decisions and circulars are on the web. The Ministry of Finance issued certain "citizen guides" as explanatory notes addressed to citizens on how to implement some tax laws. These guides are available only in Arabic at the Information Office of the Ministry located at Bechara El-Khoury Street or on the website address mentioned above. 10. Court Decisions Appeals to the decisions of the tax opposition commissions are directly presented to the "Conseil d'etat", the highest administrative Court. The decisions of the Conseil d'etat related to taxes and duties are published in the "Review of the Administrative Jurisdiction of Lebanon, Taxes and Duties", issued by the Conseil d'etat. Tax appeals include three stages: 1. An internal appeal within the tax administration 2. Since administrative courts have not been created yet, appeals are directed to a regional quasi-judicial committee, comprised of tax officials, sector representatives, and presided over by judges whose votes prevail in case of even votes 3. A final appeal to the Conseil d'etat. Tax crimes are prosecuted in the ordinary courts, but tax penalties are imposed within the administrative system and are appealed according to the same procedures of tax appeals. There are no statistics related to decisions rendered by the administration or the regional committee. However, an archive is kept at each competent administration. Regarding the Conseil d'etat there are no statistics covering the number of tax cases, although a register is kept at the court, comprising decisions related to taxation. 11. The Ministry of Finance Website The official website of the Lebanese Ministry of Finance ( contains:

5 Public Finance Information: Budget reports, public debt and fiscal performance statistics, as well as publications covering public finance, trade, and other economic and monetary developments, published on a monthly, quarterly, and yearly basis Detailed List of Tax Conventions and Investments Agreements signed, ratified or enforced by the Ministry of Finance VAT laws, regulations, circulars, guides and forms (the law is available in Arabic, French and English) Circulars and Forms related to the deduction at source on salaries (in Arabic) Forms and Guides related to income tax, indirect taxes, built property tax and inheritance tax, as well as forms and guides related to tax settlement (in Arabic) 12. Hard Copy and CD-Rom Publications related to Tax Laws A compendium of laws whose title is "Laws of Lebanon" published by Dar El Manshourat Al Houqouqiyé, Sader Printing. It is sub-divided by respective ministries. Volumes 8, 8/1, 9 and 9/1 relat to the Ministry of Finance. A second compilation of laws under the title "Comprehensive Lebanese Legislation" published by "Halabi Legal Publications". Volume 13 includes all legal texts related to direct and indirect taxation. Phone number: , Fax number Compilations of laws and decrees and, eventually, high Court decisions are edited in a CD-Rom form by different private companies.