Income Tax Violations and Penalties Table (First Chapter, Second Chapter, Third Chapter)
| Violation | Article | Penalty |
|---|---|---|
| Violations related to keeping records and documents | ||
| Failure to keep accounting records and documents | Art. 114 |
50% of the undeclared net tax, provided that it is not less than:
|
| Failure to present accounting records and documents, or failure of the records to meet one of the legal requirements for example: aggregate entries without details, failure to follow chronological order of entries, absence of detailed inventory documents, etc. | Art. 115 |
50% of the due unpaid tax, provided that it is not less than:
|
| Failure to issue an invoice whenever required by law | Art. 113 (Item 1) | 2% of the value of the transaction subject of the invoice. |
| Failure to show on invoices or similar documents, whose issuance is mandatory by law, the tax number and other formal information that does not affect verification of the correctness of the tax due | Art. 113 (Item 2) | 0.5% of the value of the transaction subject of the invoice. |
| Failure to keep the employee register, refusal to allow the administration to inspect it, or omission of names. | Art. 123 | LBP 25,000 for each omitted name. |
| Failure to register employees according to form R3, or providing incorrect information about them. | Art. 124 | LBP 50,000 for each employee not registered with the tax administration within two months of employment. |
| Failure to prepare schedules of coupons and financial securities | Art. 127 | LBP 300,000. |
| Failure to keep the two registers related to payment, sale, or purchase of coupons and other financial securities. | Art. 128 | LBP 300,000. |
| Failure to prepare a summary of Register No. 1 allocated to payment transactions that required withholding tax directly by the person responsible for it | Art. 129 | LBP 300,000. |
| Violations related to declarations | ||
| Failure to declare, or delay in declaring, commencement of business. | Art. 107 (Item 1) |
|
| Failure or delay in notifying the administration of a partial cessation of business, or of changes to taxpayer information according to Article 32, Item 2. | Art. 107 (Item 2) |
Partial cessation of business means cessation relating to a specific activity while the taxpayer carries out another activity or owns an establishment other than the one sold or transferred. |
| Failure to submit the declaration of business results, or delay in submitting it, and failure by the administration to amend it | Art. 109 |
In case of late declaration: a penalty of 5% per month of the tax due according to the declaration is imposed. In case of non-declaration: a penalty of 5% of the tax due according to the profit determined by the administration is imposed. In both cases, the penalty is due for each month of delay, and a fraction of a month is considered a full month, up to a maximum equal to the tax due, provided that it is not less than:
|
| Delay in declaring business results and amendment of the declaration by the administration | Articles 109 and 110 |
5% per month of the full tax due for each month of delay, with a fraction of a month considered a full month, after deducting the assessment penalty paid by the taxpayer upon declaration. This penalty may not exceed a maximum equal to the tax due and may not be less than:
Article 110 penalty is also imposed at 20% of the difference between the net tax due and the declared net tax, provided that it is not less than LBP 750,000 for joint-stock companies and partnerships limited by shares, LBP 500,000 for partnerships and limited liability companies and institutions exempt from tax, and LBP 100,000 for individuals, regardless of the method of assessment. |
| Failure or delay in submitting the annual declaration (R5 + R6), regardless of payment | Art. 109 |
5% of the tax due according to the declaration, or as determined by the administration, for each month of delay, with a fraction of a month considered a full month, up to a maximum equal to the tax due, provided that it is not less than:
|
| Failure or delay in submitting the personal declaration for salaries and wages tax (R8) | Art. 109 | 5% of the tax due according to the declaration or the profit determined by the administration for each month of delay, provided that it does not exceed the tax amount and is not less than LBP 100,000. |
| Failure or delay in declaring income from foreign shares and securities if transferred abroad or collected abroad. | Art. 109 |
5% of the tax due according to the declaration or the profit determined by the administration for each month of delay, provided that it does not exceed the tax amount and is not less than LBP 750,000 for joint-stock companies and partnerships limited by shares, including companies benefiting from exemptions.
|
| Failure or delay in declaring amounts and financial securities that lapse by prescription | Art. 109 |
In case of violation, the offender is required to pay the full amount lapsed by prescription, with a penalty equal to 5% per month of that amount, with a minimum of: LBP 750,000 for joint-stock companies and partnerships limited by shares, including companies benefiting from exemptions. LBP 500,000 for limited liability companies, including companies benefiting from exemptions. |
| Amendment of the annual or periodic declaration | Art. 110 | 20% of the tax due according to the amendment, provided that it is not less than LBP 750,000 for joint-stock companies and partnerships limited by shares, LBP 500,000 for partnerships and limited liability companies and institutions exempt from tax, and LBP 100,000 for individuals, regardless of the method of assessment. |
| Failure or delay in declaring cessation of business. | Art. 108 | LBP 2,000,000 for joint-stock companies and partnerships limited by shares, including companies benefiting from exemptions; LBP 1,000,000 for partnerships, limited liability companies, and institutions exempt from tax; and LBP 300,000 for individuals, regardless of the method of assessment. |
| Omission of information when completing declarations, where no additional tax results. | Art. 111 |
|
| Failure or delay in submitting the auditor’s report | Art. 112 |
5% of the tax due according to the declaration or the profit determined by the administration for each month of delay, with a fraction of a month considered a full month, up to a maximum equal to the tax due, provided that it is not less than:
|
| Failure or delay in submitting the periodic statement and failure to pay the tax within the legal deadline | Art. 116 |
In case of delay: 5% of the tax due according to the declaration submitted by the taxpayer. In case of failure to submit the statement: 5% of the tax due according to the amounts determined by the administration. In both cases, the penalty is imposed for each month of delay, with a fraction of a month considered a full month, up to a maximum equal to the tax due, provided that it is not less than LBP 750,000 for joint-stock companies and partnerships limited by shares, including companies benefiting from exemptions. LBP 500,000 for partnerships and limited liability companies, including companies benefiting from exemptions, and institutions exempt from tax. LBP 100,000 for individuals, regardless of the method of assessment. |
| Failure or delay in submitting the declaration for all types of income and failure to pay the tax, except for declaration of transfer of shares in limited liability companies and declaration of income from foreign shares and securities if transferred abroad or collected abroad. | Art. 116 | 5% of the tax due according to the declaration, income, or profit determined by the administration for each month of delay, provided that it does not exceed the tax amount and is not less than LBP 750,000 for joint-stock companies and partnerships limited by shares, including companies benefiting from exemptions; LBP 500,000 for partnerships and limited liability companies, including companies benefiting from exemptions and institutions exempt from tax; and LBP 100,000 for individuals, regardless of the method of assessment. |
| Failure of the institution to complete its self-investment process. | Art. 122 | 1% of the non-invested withheld amounts for each month of delay, with a fraction of a month considered a full month, starting from the first year following the business year from whose profits the invested amounts were withheld. |
| Failure or delay in submitting the periodic statement while the tax is paid within the legal deadline. | Art. 125 | Flat penalty of 5% of the tax due according to the declaration submitted by the taxpayer or the tax determined by the administration, with a minimum of LBP 100,000 and a maximum of LBP 1,000,000 for each period. |
| Mismatch between the declaration submitted to the Ministry of Finance and the declaration submitted to the National Social Security Fund. | Art. 126 | LBP 200,000 for each declaration. |