Books and Records
Persons subject to income tax on the basis of actual profit are required to keep the journal, inventory book, general ledger, and salaries and wages register. For tax and fee assessment purposes, these records may be kept without being stamped or endorsed. Joint-stock companies and partnerships limited by shares are also required to keep a register of nominative shares.
Accounting records and documents must be kept for 10 years from the end of the year to which those records and documents relate, either at the taxpayer’s place of business or at the taxpayer’s residence.
- Cash Journal: All transactions relating in any way to the taxpayer’s commercial enterprise must be recorded in it day by day. At minimum, where the nature of the business prevents this, the monthly results of those transactions may be recorded, provided that all documents allowing the verification of those transactions day by day are kept throughout the legal period.
- General Ledger: The general accounting plan allows an institution to use subsidiary ledgers and subsidiary journals according to its requirements and needs, provided that the transactions recorded in the subsidiary books are periodically consolidated in the central journal and general ledger at least once a month.
- Inventory Book: The taxpayer must carry out an annual inventory of all elements of the establishment and close all accounts in order to prepare the balance sheet and the profit and loss account. At minimum, the balance sheet and the profit and loss account must be recorded in the inventory book. If this book does not include detailed inventory items, the related documents must be prepared and kept throughout the legal period.
Penalties
Any person who fails to keep accounting records and documents is subject to a penalty of 50% of the undeclared net tax, provided that it is not less than:
- LBP 750,000, seven hundred and fifty thousand Lebanese pounds, for joint-stock companies, including companies benefiting from exemptions.
- LBP 500,000, five hundred thousand Lebanese pounds, for partnerships and limited liability companies, including companies benefiting from exemptions, and institutions exempt from tax.
- LBP 100,000, one hundred thousand Lebanese pounds, for individuals and other taxpayers.
Any person who refuses to present records or documents proving the correctness of the declaration, or refuses to duly record certain transactions, is subject to a penalty of 50% of the due unpaid tax, provided that it is not less than:
- LBP 750,000, seven hundred and fifty thousand Lebanese pounds, for joint-stock companies, including companies benefiting from exemptions.
- LBP 500,000, five hundred thousand Lebanese pounds, for partnerships and limited liability companies, including companies benefiting from exemptions, and institutions exempt from tax.
- LBP 100,000, one hundred thousand Lebanese pounds, for individuals and other taxpayers.
In addition, a late payment penalty of 1% per month shall apply on the total of the unpaid tax due and the assessment penalty.