Tax on Non-Residents
Definition
Amounts received in Lebanon by persons, companies, or institutions that do not have a place of business in Lebanon, for activities subject to income tax, as well as profits, revenues, and proceeds earned in Lebanon, are of two types:
- Compensation for services: Work in which expertise and personal effort are predominant, such as technical consulting, occasional brokerage activities, and other professional and technical services.
- Other amounts paid to non-residents: Amounts paid for activities involving the provision of materials, supplies, and other items, and not services.
Tax Calculation
Compensation for services: The taxable amount is calculated by applying a profit rate of 50% to the original revenues, then applying a tax rate of 15%.
Other amounts paid to non-residents: The taxable amount is calculated by applying a profit rate of 15% to the gross revenues, then applying a tax rate of 15%.
Withholding and Declaration of Tax
Any person who pays amounts to non-residents must declare these amounts within the deadline set for declaring their own profits, after withholding the tax due from them. This withheld tax must be paid to the Treasury together with the declaration.
Penalty
Failure to include the amounts paid to non-residents in the annual declaration:
5% of the tax due according to the amounts determined by the administration for each month of delay, with any fraction of a month considered a full month, up to a maximum equal to the tax due, provided that it is not less than:
- LBP 750,000 for joint-stock companies, including joint-stock companies benefiting from exemptions.
- LBP 500,000 for partnerships and limited liability companies, including companies benefiting from exemptions, and institutions exempt from tax.
- LBP 100,000 for individuals.
In addition, a collection penalty, late payment penalty, of 1.5% applies for each month of delay, with any fraction of a month considered a full month.
Forms
- F26: Statement of amounts paid to non-residents, personal income tax declaration or income tax declaration for sole proprietorships.
- A26: Statement of amounts paid to non-residents, income tax declaration for partnerships.
- SH26: Statement of amounts paid to non-residents, income tax declaration for capital companies.
- The tax is paid through the advance payment notice, S1, Chapter One section.