Commencement of Business
Declaration of commencement of business must be submitted by the taxpayers listed below:
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Natural persons:
Natural persons include every person who carries out, individually or in cooperation with others:
- Commercial or industrial professions, for example: blacksmithing and car mechanics, bookstores, grocery stores, etc.
- Non-commercial or non-industrial activities, liberal professions, for example: lawyers, doctors, etc.
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Any activity that generates income which is not subject to another income tax and is not classified above.
The persons mentioned above are responsible for declaring the commencement of work of their employees.
When a natural person adds an activity in the same workplace declared to the competent tax department, the person must amend the related information within the two-month period provided for in Item 2 of Article 32 of the Tax Procedures Law.
When a natural person carries out a new activity in another workplace, the person must declare the commencement of a new business within a period of two months, while observing the provisions of Decision No. 368/1 dated April 4, 2002, relating to persons who manage or carry out similar or related businesses or activities at the same time in multiple establishments with respect to value added tax.
When should registration take place?
Anyone who starts a new business must notify the financial departments within two months from the date of commencement of business.
The dates of commencement of business are determined as follows:
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Natural persons:
The date of commencement of business is determined based on one of the following criteria:
- The date of the first activity that may generate income subject to profits tax, Chapter One.
- The date of registration in the commercial register.
- The date of issuance of any document proving that a commercial transaction took place, for example: an invoice or receipt.
- The date of hiring an employee.
- The date of renting or using a place to practice the profession or business.
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The date of the license to practice the profession or registration with the syndicate for liberal professions, except for:
- Lawyers: from the date their registration is transferred to the general roll.
- Pharmacists: from the date of registration in the commercial register.
- If multiple criteria apply, the earliest date shall be adopted.
- Employees: from the date of employment.
Commencement of Business Declarations and Attached Documents
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Individuals, sole proprietorships and liberal professions:
- Commencement of Business Form M10.
- Personal identification form M11.
- Copy of the commercial register certificate for registered persons.
- Copy of the identity card, or individual civil status record for single persons, or family civil status record for married persons.
- Copy of the license to practice the profession and copy of the syndicate registration card or membership certificate, for those required to join a syndicate.
- Copy of the lease agreement, title deed, investment contract, or certificate from the owner stating that the occupancy is tolerated, attached with a copy of the title deed, or a notice and information document for non-surveyed properties.
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Employee:
- Application to register a new employee/user, R3.
- Copy of the family civil status record for a married employee.
- Copy of the individual civil status record or identity card for a single employee.
- Copy of the passport for a foreign worker.
From the date the taxpayer is notified of their tax registration number, the taxpayer must comply with all obligations imposed by the law and its implementing texts, and all effects of registration shall apply in their favor and against them.
Penalties
- A penalty of LBP 300,000 is imposed on every individual who fails to submit a registration application to the tax administration within the legal deadlines.
- A flat penalty of fifty thousand Lebanese pounds is imposed on every employer who fails to register employees with the tax administration, for each employee or wage earner who is not registered within the specified deadlines, or for providing incorrect information about them.
When the declaration of commencement of business includes an activity subject to more than one type of tax, this declaration shall be considered a declaration for all types of taxes, except value added tax.