Non-Operation
A taxpayer who meets the conditions for commencement of business but does not intend to actually carry out the business must submit a registration application within the specified deadline, attached with a declaration of actual non-operation.
The taxpayer must also submit this declaration annually to the competent tax unit within the legal deadline for submitting the income tax declaration.
The non-operation declaration is submitted to the competent tax unit according to the form prepared by the Ministry of Finance, “M7”.
Taxpayers who annually submit a declaration of actual non-operation are exempt from the obligation to keep legal records and submit income tax declarations and the related financial statements, until they actually start business activity, at which point the procedures related to commencement of business shall apply.
Delay in Submitting the Non-Operation Declaration
In case of delay in submitting the non-operation declaration, the penalty under Article 109 of the Tax Procedures Law shall be imposed at its minimum amount:
- LBP 750,000, seven hundred and fifty thousand Lebanese pounds, for joint-stock companies.
- LBP 500,000, five hundred thousand Lebanese pounds, for partnerships, limited liability companies, and institutions exempt from tax.
- LBP 100,000, one hundred thousand Lebanese pounds, for individuals and other taxpayers.
In addition, a late payment penalty, collection penalty, of 1% of the unpaid tax due shall apply, plus the assessment penalty, starting from the expiry date of the original declaration deadline.