Income Tax Violations and Penalties Table (First, Second, and Third Schedules)
| Violation | Article | Penalty |
|---|---|---|
| Violations Related to Accounting Records and Supporting Documents | ||
| Failure to maintain accounting records and supporting documents. | Art. 114 |
50% of the undeclared net tax, subject to the following minimum penalties:
|
| Failure to present accounting records and supporting documents, or failure of the records to satisfy a legal requirement, such as maintaining aggregate entries without supporting detail, failure to follow chronological order, or failure to maintain details and supporting documents for aggregate inventory records. | Art. 115 |
50% of the unpaid tax due, subject to the following minimum penalties:
|
| Failure to issue an invoice where issuance is mandatory by law. | Art. 113 (Item 1) | 2% of the value of the transaction covered by the invoice. |
| Failure to show the tax identification number or other formal information on invoices or similar documents that are legally required, where such information does not affect verification of the correctness of the tax due. | Art. 113 (Item 2) | 0.5% of the value of the transaction covered by the invoice. |
| Failure to maintain the employee register, refusal to allow the administration to inspect it, or omission of employee names from the register. | Art. 123 | LBP 25,000 for each omitted name. |
| Failure to register employees using Form R3 or providing incorrect information about them. | Art. 124 | LBP 50,000 for each employee not registered with the tax administration within two months from the date of employment. |
| Failure to prepare schedules relating to coupons and securities. | Art. 127 | LBP 300,000. |
| Failure to maintain the two registers relating to the payment, sale, or purchase of coupons and other securities. | Art. 128 | LBP 300,000. |
| Failure to prepare a summary of Register No. 1 relating to payment transactions that required direct withholding of tax by the responsible person. | Art. 129 | LBP 300,000. |
| Violations Related to Tax Declarations | ||
| Failure to declare, or late declaration of, the commencement of business. | Art. 107 (Item 1) |
|
| Failure to notify, or late notification to, the administration of a partial cessation of business or of changes to taxpayer information in accordance with Item 2 of Article 32. | Art. 107 (Item 2) |
Partial cessation of business means cessation of a specific activity while the taxpayer continues another activity or owns another establishment other than the one sold or transferred. |
| Failure to file, or late filing of, the declaration of business results where the declaration is not amended by the administration. | Art. 109 |
Late filing: a penalty of 5% per month of the tax due according to the declaration. Failure to file: a penalty of 5% of the tax due according to the profit determined by the administration. In both cases, the penalty applies for each month of delay, with any fraction of a month treated as a full month, up to a maximum equal to the tax due, subject to minimum penalties of:
|
| Late declaration of business results where the declaration is amended by the administration. | Arts. 109 and 110 |
5% per month of the full tax due for each month of delay, with any fraction of a month treated as a full month, less any assessment penalty already paid by the taxpayer upon filing. The penalty may not exceed the total tax due and may not be less than:
In addition, the penalty under Article 110 is imposed at 20% of the difference between the net tax due and the net tax declared, subject to minimum penalties of LBP 750,000 for joint-stock companies and partnerships limited by shares, LBP 500,000 for partnerships, limited liability companies and entities excluded from tax, and LBP 100,000 for individuals, regardless of the assessment method applied to them. |
| Failure to file, or late filing of, the annual declaration (R5 + R6), regardless of payment. | Art. 109 |
5% of the tax due according to the declaration or as determined by the administration for each month of delay, with any fraction of a month treated as a full month, up to a maximum equal to the tax due, subject to minimum penalties of:
|
| Failure to file, or late filing of, the personal salaries and wages tax declaration (R8). | Art. 109 | 5% of the tax due according to the declaration or the profit determined by the administration for each month of delay, not exceeding the amount of tax and not less than LBP 100,000. |
| Failure to declare, or late declaration of, income from foreign shares and securities where such income is transferred abroad or received abroad. | Art. 109 |
5% of the tax due according to the declaration or the profit determined by the administration for each month of delay, not exceeding the tax due and subject to minimum penalties of:
|
| Failure to file, or late filing of, a declaration relating to amounts and securities that lapse by prescription. | Art. 109 |
In case of violation, the offender must pay the full amount that has lapsed by prescription, together with a penalty equal to 5% per month of that amount, subject to minimum penalties of:
|
| Amendment of an annual or periodic declaration. | Art. 110 | 20% of the tax due as a result of the amendment, subject to minimum penalties of LBP 750,000 for joint-stock companies and partnerships limited by shares, LBP 500,000 for partnerships, limited liability companies and entities excluded from tax, and LBP 100,000 for individuals, regardless of the assessment method applied to them. |
| Failure to declare, or late declaration of, cessation of business. | Art. 108 | LBP 2,000,000 for joint-stock companies and partnerships limited by shares, including companies benefiting from exemptions; LBP 1,000,000 for partnerships, limited liability companies and entities excluded from tax; and LBP 300,000 for individuals, regardless of the assessment method applied to them. |
| Omission of information from declarations where no additional tax results from the omission. | Art. 111 |
|
| Failure to submit, or late submission of, the statutory auditor's report. | Art. 112 |
5% of the tax due according to the declaration or the profit determined by the administration for each month of delay, with any fraction of a month treated as a full month, up to a maximum equal to the tax due, subject to minimum penalties of:
|
| Failure to submit, or late submission of, the periodic statement and failure to pay the tax within the legal deadline. | Art. 116 |
Late submission: 5% of the tax due according to the declaration filed by the taxpayer. Failure to submit the statement: 5% of the tax due according to the amounts determined by the administration. In both cases, the penalty applies for each month of delay, with any fraction of a month treated as a full month, up to a maximum equal to the tax due, subject to minimum penalties of:
|
| Failure to file, or late filing of, declarations for all types of income and failure to pay the tax, except declarations relating to the transfer of shares in limited liability companies and declarations of income from foreign shares and securities where transferred abroad or received abroad. | Art. 116 | 5% of the tax due according to the declaration, income, or profit determined by the administration for each month of delay, not exceeding the tax due and subject to minimum penalties of LBP 750,000 for joint-stock companies and partnerships limited by shares, including companies benefiting from exemptions; LBP 500,000 for partnerships and the limited liability companies described in the source, including companies benefiting from exemptions and entities excluded from tax; and LBP 100,000 for individuals, regardless of the assessment method applied to them. |
| Failure of an establishment to complete its self-investment process. | Art. 122 | 1% of the withheld amounts not invested for each month of delay, with any fraction of a month treated as a full month, beginning from the first day of the year following the business year from whose profits the invested amounts were deducted. |
| Failure to submit, or late submission of, the periodic statement where the tax was paid within the legal deadline. | Art. 125 | A fixed penalty equal to 5% of the tax due according to the declaration filed by the taxpayer or the tax determined by the administration, with a minimum of LBP 100,000 and a maximum of LBP 1,000,000 for each period. |
| Discrepancy between the declaration submitted to the Ministry of Finance and the declaration submitted to the National Social Security Fund. | Art. 126 | LBP 200,000 for each declaration. |