Taxation

Value Added Tax

Table of Value Added Tax Violations and Penalties

Violation of the provisions of the law through failure to comply with tax obligations exposes the taxable person to several financial penalties.
For a single violation, the highest penalty among the penalties imposed under Article 48 of the law shall apply.
The offender remains subject to general laws in everything that does not conflict with the provisions of the Value Added Tax Law, such as the Penal Code, the Code of Civil Procedure, and procedures for collecting indirect taxes.
What types of penalties apply to the taxpayer for each type of violation?

Type of Violation	Applicable Penalties
1- Delay or failure to submit the registration request	LBP 2,000,000 for joint-stock companies. LBP 1,000,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 300,000 for individuals and other taxpayers.
2- Failure to notify any change to the taxpayer’s name, address, activity, or legal form	LBP 200,000 for joint-stock companies. LBP 100,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 50,000 for individuals and other taxpayers.
3- Delay or failure to declare final cessation of business	LBP 2,000,000 for joint-stock companies. LBP 1,000,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 300,000 for individuals and other taxpayers.
4- Delay or failure to submit the periodic declaration	5% of the tax due according to the declaration or the profit determined by the tax administration for each month of delay, or fraction of a month, provided that the penalty does not exceed 100% of the tax due for each declaration and is not less than: LBP 750,000 for joint-stock companies. LBP 500,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 100,000 for individuals and other taxpayers.
5- Incorrect declaration	20% of the difference between the net tax due and the net tax declared, provided that the penalty is not less than: LBP 750,000 for joint-stock companies. LBP 500,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 100,000 for individuals and other taxpayers.
6- Submission of an amended periodic declaration	Within the original declaration deadline: no assessment penalty is due. Within 30 days from the end of the original declaration deadline: no assessment penalty is due, provided that the amendment does not result in additional tax exceeding 10% of the tax due. If the amendment results in additional tax exceeding 10% of the tax due, a penalty of 20% of the difference between the net tax due shall be imposed.
7- Omission of information in the declaration	Penalty amount: LBP 200,000 for joint-stock companies. LBP 100,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 50,000 for individuals and other taxpayers. If the omission does not result in additional tax.
8- Failure to issue an invoice when this is mandatory	2% of the value of the transaction subject of the invoice.
9- Failure to show the tax number or other formal information on the invoice	0.5% of the value of the transaction subject of the invoice.
10- Failure to keep accounting records and documents	Penalty of 50% of the undeclared non-net tax, provided that it is not less than: LBP 750,000 for joint-stock companies. LBP 500,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 100,000 for individuals and other taxpayers.
11- Obstruction of tax audit procedures	Penalty of 50% of the due unpaid tax, provided that it is not less than: LBP 750,000 for joint-stock companies. LBP 500,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 100,000 for individuals and other taxpayers.
12- Preventing the execution of compulsory collection procedures	Penalty of 5% monthly of the value of the tax required to be collected by force, provided that it does not exceed the amount of the tax to be collected and is not less than: LBP 750,000 for joint-stock companies. LBP 500,000 for partnerships, limited liability companies, and institutions exempt from tax. LBP 100,000 for individuals and other taxpayers.
13- Issuing an invoice without legal right	Three times the tax stated on the invoice, imposed on persons not registered for VAT.
14- Issuing an invoice in violation of Article 38 of the law	25% of the tax due on the transaction subject of the invoice.
15- Failure to pay an amount stated in an invoice or any similar document as tax	1.5% of the tax amount for each month of delay.

Reference: Chapter One of Title Four of Law No. 44, Tax Procedures.