Taxation

Refund of Value Added Tax

Quarterly Refunds for Export and International Transport Transactions

A taxable person whose annual exports amount to LBP 50 million may request, at the end of each tax period, a refund of excess deductible VAT in a proportion equivalent to the percentage of quarterly exports. This has applied since 1 July 2004.

An exporter-classification request must be submitted to the Taxpayer Services Department in order to qualify for quarterly refund applications.

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Semi-Annual Refunds

A taxable person may submit a request for the refund of excess deductible VAT after the end of the second quarter of any calendar year.

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Annual Refunds

A taxable person may submit a request, after the end of any calendar year, for the refund of the excess deductible VAT balance calculated at the end of that year.

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Refunds for Certain Exempt Transactions under Article 59

Who Is Eligible under Article 59?

Eligible persons are those carrying out transactions exempt under Articles 16 and 17 of the law. Their activities include:

Manufacturing medicines.
Manufacturing exempt food products listed in Article 17 of the Value Added Tax Law.
Hospital services and medical laboratories.
Activities carried out by non-profit bodies and associations in relation to their VAT-exempt operations.
Education.
Public passenger transport.
Publishing books, magazines, and newspapers.
Manufacturing paper and cardboard.
Manufacturing pharmaceutical products.

The refund request must be submitted at the end of each quarter using the designated Form Q7-3.

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VAT Refunds for Embassies, Diplomatic Bodies, and International Organizations

The following bodies and persons benefit from the right to a refund:

Diplomatic missions and career consulates in Lebanon, subject to reciprocity.
United Nations organizations operating in Lebanon.
International and regional organizations.
Diplomats, consuls, and employees of the organizations listed above.

Conditions and Procedures for Refunds

The principle of reciprocity must apply.
The VAT must relate to goods and services used in carrying out official duties and activities.
The value of a single invoice must exceed LBP 300,000.
Refund requests must be submitted using forms prepared by the tax administration at the end of each month. The request must be filed no later than six months from the date of purchase.
The refund request must be submitted through the Ministry of Foreign Affairs and Emigrants and is accepted only when certified by that ministry.

Reference: Decree No. 7295 and its amendments dated 26 January 2002 (Diplomatic Bodies) .

Refunds for Non-Resident Businesspersons

Non-resident businesspersons are natural or legal persons, whether foreign nationals or Lebanese persons residing abroad, who have no permanent place of business or permanent residence in Lebanon and whose purpose in visiting Lebanon is to organize or participate in conferences, lectures, or exhibitions.

Refund Conditions

The person must be registered with the tax administration in the country of residence or the country in which the profession is practised.
The person must not carry out any activity in Lebanon, whether involving the supply of goods or services and whether taxable or non-taxable.
The VAT paid must exceed LBP 1,000,000 during one visit or several visits.
The refund request must be submitted before the end of the sixth month of the year and must cover a twelve-month period preceding the submission date.

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Refund of the Cost of One Cash Register

Persons who follow the simplified system for preparing and issuing invoices, under Decision No. 294/1 dated 6 March 2002 concerning persons who use the cash basis of accounting, and who have obtained approval from the tax administration to use that system, may submit a request to the VAT Directorate, Tax Compliance Department, for reimbursement of the cost of one approved cash register.

The machine must have been acquired after 31 January 2002 and must comply with the specifications imposed by the Directorate under Instruction No. 1819/S1 dated 23 October 2004.

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Refunds for Tourists

Tourists may recover VAT paid on certain goods or property purchased in Lebanon, subject to the following conditions:

The purchases or goods must be carried as part of the tourist's personal luggage.
The goods must have been purchased from a trader registered with the tax administration.
The total value of a single invoice must be at least LBP 150,000.
The purchases must be taken out of Lebanon within three months from the date of purchase, meaning the invoice date.
The purchases must be new and must not have been used in Lebanon.

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