Imposition of Tax

General Information

Value Added Tax is a tax on the consumption of goods and services within Lebanese territory, whether locally manufactured or imported.

Taxable Transactions

Taxable transactions include the supply of property, including goods, movable and immovable property, and fixed assets, as well as the provision of services within Lebanese territory by taxable natural or legal persons.

They also include the importation of goods and services, whether or not the importer is registered for VAT.

Reference: Article 2 of Law No. 379 dated 14 December 2001 (Value Added Tax Law) .

Exempt Transactions with the Right to Deduct

Transactions exempt with the right to deduct are taxable transactions subject to a zero percent VAT rate. Goods or services are supplied without charging VAT, while the taxable person retains the right to deduct the VAT previously incurred in manufacturing, purchasing, or importing the goods, property, and services required for carrying out the activity.

Examples include exports and the international transport of passengers and goods.

Transactions Exempt from VAT without the Right to Deduct

Transactions exempt from VAT without the right to deduct include the supply of goods, property, and services without charging VAT and without allowing the person carrying out the transaction to deduct the VAT incurred in manufacturing, purchasing, or importing those goods, property, or services.

However, certain persons carrying out exempt transactions without the right to deduct may request a full or partial refund of VAT paid on specified purchases, in accordance with Article 59 of the law .

Transactions carried out within Lebanese territory in connection with the following activities are exempt from VAT:

1. Services provided by physicians or medical professionals, including hospitalization expenses.
2. Education.
3. Insurance, reinsurance, and healthcare benefits provided by mutual funds and employers, together with related services.
4. Banking and financial services.
5. Activities carried out by non-profit bodies and associations in pursuit of the purposes for which they were established, except for recurring activities whose exemption would create unfair competition with taxable businesses.
6. Public passenger transport, including transportation by taxi.
7. The supply of gold to Banque du Liban.
8. Betting, lotteries, and other games of chance.
9. The sale of constructed real estate.
10. The rental of constructed residential property.
11. The supply by farmers of their agricultural produce.

Reference: Article 16 of Law No. 379 dated 14 December 2001 (Value Added Tax Law) .

Goods and Items Exempt from VAT

1. Livestock, poultry, live fish, and agricultural food products sold in their natural state.
2. Bread, flour, meat, fish, milk, dairy products and their derivatives, rice, bulgur, sugar, table salt, vegetable oils, all types of pasta, and food preparations intended for infant nutrition.
3. Books and similar printed materials, magazines, newspapers, paper and cardboard used for writing or printing, newsprint in rolls or sheets, and printing ink.
4. Postage and fiscal stamps, and banknotes.
5. Gas intended for household consumption, including butane gas.
6. Seeds, fertilizers, animal feed, and agricultural pesticides.
7. Agricultural machinery.
8. Medicines and pharmaceutical products, including products intended for medical and pharmaceutical use, such as contraceptives, condoms, sanitary products, diapers, and similar hygiene products.
9. Medical instruments, devices, and equipment.
10. Precious and semi-precious stones, synthetic or reconstructed precious and semi-precious stones, pearls, diamonds, gold, silver, and other precious metals.
11. Banknotes and coins in circulation.
12. Yachts, other vessels, and pleasure or sports boats exceeding 15 metres in length, provided they belong exclusively to non-Lebanese persons.
13. Aircraft used for the transport of passengers and goods.

For further details concerning goods that are exempt from or subject to VAT, please consult the Harmonized Customs System .

Reference: Article 17 of Law No. 379 dated 14 December 2001 (Value Added Tax Law) .

Exemptions on Importation

1. The importation of goods whose supply within Lebanese territory is exempt from VAT under Articles 16 and 17 of the law.
2. Import transactions covered by customs legislation concerning exemptions granted to the Presidency of the Republic, Parliament, the Presidency of the Council of Ministers, the United Nations, diplomatic and consular bodies, and donations received by government departments, public institutions, and municipalities.
3. The importation of personal belongings, household effects, and samples with no commercial value, as defined under customs legislation.
4. The importation of military vehicles, weapons, and ammunition.

Reference: Article 18 of Law No. 379 dated 14 December 2001 (Value Added Tax Law) .