Tax on Movable Capital Income
Income Subject to Tax at the Rate of 10%
Distribution of Dividends in Lebanese Capital Companies
Declaration and Tax Payment Deadline
Within the month following the decision to pay dividends.
Assessment Penalty
5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH1.
- Advance payment notice S1.
- Distribution decision.
The tax on distributions by Lebanese capital companies is reduced from 10% to 5% in each of the following cases:
- When any Lebanese joint-stock company lists its shares on the Beirut Stock Exchange, starting from the first year following the year of share registration.
- When a Lebanese joint-stock company allocates at least 20% of its capital to Arab companies whose shares are traded on stock exchanges in their countries, or to foreign companies whose shares are traded on stock exchanges in OECD countries.
- When any Lebanese joint-stock company issues Global Depositary Receipts GDR equivalent to at least 20% of the number of its shares on the Beirut Stock Exchange.
The distribution tax for a given company must not be reduced below 5%, even if all three cases above apply together.
Distribution of Dividends of Foreign Capital Companies Operating in Lebanon
Declaration and Tax Payment Deadline
Within the annual declaration deadline, i.e. before 1/6.
Assessment Penalty
5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH2.
- Advance payment notice S1.
Allocations to Board Members Taken from Profits
Declaration and Tax Payment Deadline
Within the month following the decision to pay profits.
Assessment Penalty
5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH1.
- Advance payment notice S1.
- Copy of the decision.
Attendance Allowances for Board of Directors and General Assembly Meetings
Declaration and Tax Payment Deadline
Before 1/6.
Assessment Penalty
5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH2.
- Advance payment notice S1.
Interest on Secured Debts Subject to Chapter Three Tax
The tax is collected upon the request of the creditor or debtor by virtue of a collection order issued by the competent financial department.
Required Forms and Documents
Summary of secured contract.
- Copy of the insurance or mortgage contract.
- Copy of the real estate insurance registration certificate.
- Personal identification of the creditor and debtor if they do not have a personal number.
Funds Taken from Reserves or Profits to Redeem or Amortize Shares
Declaration and Tax Payment Deadline
Within the month following the decision to pay the amounts.
Assessment Penalty
5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH1.
- Advance payment notice S1.
- Copy of the general assembly decision relating to funds taken from reserves or profits to redeem or amortize shares.
Prizes and Premiums Paid to Creditors
Declaration and Tax Payment Deadline
Within the month following the decision to pay the amounts.
Assessment Penalty
5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH1.
- Advance payment notice S1.
- Schedule showing the due dates of interest and premiums.
Interest on Preferred and Ordinary Debts, Deposits and Guarantees
Declaration and Tax Payment Deadline
- Quarterly within 15 days from the end of the quarter when the tax for each quarter exceeds LBP 200,000.
- Annually in other cases within the annual declaration deadline.
Assessment Penalty
An assessment penalty is due for late quarterly or annual declaration at a rate of 5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH1 quarterly if the tax due exceeds LBP 200,000 in the quarter. In this case, an annual declaration, Form TH2, must be submitted and quarterly payments reconciled.
- Form TH2 when no quarterly declaration is due.
- Advance payment notice.
Profits from Transfer of Shares in Limited Liability Companies
Declaration and Tax Payment Deadline
Two months from the date of transfer.
Assessment Penalty
5% of the tax due for each month of delay, provided that it does not exceed the tax amount.
Collection Penalty
1% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
-
A letter addressed by the transferor to the head of the financial unit, including:
- Name of the transferor and registration number with the Ministry of Finance.
- Name of the company in which the transferred shares are owned and its registration number with the Ministry of Finance.
- Name of the transferee and registration number with the Ministry of Finance.
- Number of transferred shares.
- Value of the taxable profit.
-
Attached to it: the transfer contract.
- Partner identification, M2, for the new partner if they do not have a personal number.
- Copy of Form TH1.
- Copy of the advance payment notice, Form S1, after payment and the payment receipt.
Amounts and Securities That Lapse by Prescription
The Treasury is entitled to 50% of the value of amounts and securities lapsed by prescription.
Declaration and Tax Payment Deadline
Before the first of June of each year.
Assessment Penalty
In case of violation, the violator is required to pay the full amount lapsed by prescription with a penalty equal to 5% monthly of that amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH2.
- Advance payment notice S1.
- Detailed statement of the amounts and securities that lapsed by prescription.
Income from Foreign Shares and Securities Collected in Lebanon
Declaration and Tax Payment Deadline
Within the month following each half-year. The declaration is due every 6 months: before 1/8 for the first half and before 1/2 for the second half of the previous year.
Assessment Penalty
5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH1.
- Advance payment notice S1.
Profits, Interest and Income from Foreign Shares and Debt Securities When Transferred Abroad or Collected Abroad
- The declaration is the responsibility of the beneficiary.
Declaration and Tax Payment Deadline
Before the first of March of the year following the year in which the income was obtained.
Assessment Penalty
5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Taxpayer declaration on a form provided by the administration, TH2.
- Advance payment notice, S1, for payment of the tax due.
Loan Interest
Declaration and Tax Payment Deadline
Quarterly within 15 days from the end of the quarter when the tax for each quarter exceeds LBP 200,000.
Annually in other cases within the annual declaration deadline.
Assessment Penalty
An assessment penalty is due for late declaration at a rate of 5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH1 quarterly if the tax due exceeds LBP 200,000 in the quarter. In this case, an annual declaration, Form TH2, must be submitted and quarterly payments reconciled.
- Taxpayer declaration on Form TH2 when no quarterly declaration is due.
- Advance payment notice.
Note: The annual declaration for all movable capital income remains due even if quarterly declarations have been submitted.
Interest, returns and income belonging to institutions exempt from tax on industrial, commercial and non-commercial profits under permanent, temporary or partial exemptions remain subject to Chapter Three tax.
Income Exempt from Tax
- Amounts paid to return creditors’ and shareholders’ funds, if taken from other than the profit and loss account or profits.
- Repayments of shareholders’ and creditors’ funds in concession companies, even if deducted from reserves or the profit and loss account, when the reason for repayment arises from the obligation to hand over the facilities to the authority at the end of the concession period without compensation.
Income Subject to Tax at the Rate of 5%
Income Subject to Tax at the Rate of 5% Pursuant to Article 51 of Law No. 497/2003
Declaration and Tax Payment Deadline
Within 15 days from the end of the month during which it was paid.
The tax is paid by SWIFT transfer to the Treasury account at Banque du Liban and cannot be paid directly to treasury cash desks.
Assessment Penalty
An assessment penalty is due for late declaration at a rate of 5% of the tax due for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax amount.
Collection Penalty
1.5% monthly on the unpaid tax, plus the assessment penalty where due, with any fraction of a month considered a full month.
Forms and Attached Documents
- Form TH15.
- Form TH19.
- Advance payment notice S8.
- Annual declaration Form TH22.
Note: The annual declaration for all movable capital income remains due even if quarterly declarations have been submitted.
Interest, returns and income belonging to institutions exempt from tax on industrial, commercial and non-commercial profits under permanent, temporary or partial exemptions remain subject to Chapter Three tax.
Income Exempt from Tax
- Credit accounts opened with Banque du Liban in the name of the Lebanese Government, municipalities, and public institutions.
- Credit accounts opened with banks operating in Lebanon in the name of foreign diplomatic and consular missions and in the name of international institutions and organizations.
- Investments with the Lebanese Government and amounts deposited with Banque du Liban and banks operating in Lebanon by foreign states or their affiliated institutions, or by international institutions or organizations, including Lebanese Treasury bills that may be subscribed to by those states, institutions, and organizations.
- Deposits and accounts opened in the name of banks with Banque du Liban.
- Interbank deposits.