Objection Before the Financial Unit
The competent tax department must examine all points raised in the objection on the basis of the information available to it. For this purpose, it may request in writing any necessary clarifications from the objector, together with any documents and supporting records it considers necessary.
If the taxpayer does not respond, a report documenting the matter is prepared and presented to the taxpayer for signature. If the taxpayer refuses to sign, the employee records that refusal in the report, and the tax department issues its decision on the basis of the information available to it.
The competent directorate must decide on the objection within six months from the date on which it is filed. The Revenue Director and the Director of Value Added Tax, each within their respective area of competence, may extend this period once for an additional three months upon the proposal of the head of the competent department through the administrative hierarchy, where justified reasons exist.
The tax administration may accept the objection in whole or in part. It may also reconsider the assessment where new or previously undisclosed facts or elements are discovered, whether submitted by the taxpayer or identified by the administration itself during its review of the objection.
The competent tax department must notify the objector of the tax administration's decision, including its full reasoning and conclusion, whether the decision reverses or confirms the contested decision. Notification must be carried out in accordance with the procedures prescribed by law, and the decision must be deposited with registered mail before the end of the original period for deciding the objection or any applicable extended period.
If the periods granted to the tax administration for deciding the objection expire without a decision being issued, this is deemed an implicit decision accepting the objection. The Director of the Tax Administration must notify the Director General of Finance of such cases, together with the reasons and the names of the employees responsible for the delay, so that the necessary measures may be taken against the employee at fault.
Objections Committees
Pursuant to Article 99 of the law, an objector whose objection has been rejected in whole or in part by the tax administration may challenge that decision before the Objections Committees within two months from the date of notification of the contested decision.
The challenge must be submitted in the form of a reasoned written petition, accompanied by a copy of the contested decision and all supporting documents. It is registered with the competent tax unit, and the head of the competent department forwards it, together with the full file, to the competent Objections Committee. The challenge is then entered in the committee's register with a reference to the registration number previously assigned in the tax administration's special register.
The objector may send the challenge against the tax administration's decision by registered mail in the form of a registered open card with acknowledgment of receipt. In such a case, the postal stamp date on the correspondence is considered the filing date of the challenge.
The committee meets upon invitation of its chair. Its sessions are valid only when the chair and all members are present, and the committee is bound by the duty of professional secrecy prescribed by law.
The Objections Committee may invite the taxpayer to attend its sessions and may also invite any other person whose testimony or clarification it considers necessary. It may appoint experts where required at the expense of the objecting party and may conduct any investigations it considers useful, including seeking assistance from employees of the competent tax administration. The taxpayer may be assisted by lawyers or experts of their choice and may request to be heard by the committee.
All summonses, notices, communications, decisions, and other correspondence are served on the objector through the usual administrative methods against receipt. If this is not possible, they are sent to the objector's place of residence by registered mail with acknowledgment of receipt.
If the taxpayer fails to attend committee sessions despite having been summoned, or fails to provide requested information, documents, or supporting records, the committee decides the objection on the basis of the contents of the file.
The taxpayer may not raise before the committee claims other than those included in the objection. However, if the committee's investigations reveal undeclared income that has not been assessed, the committee must refer the objection file to the competent tax administration for the necessary action. The committee may not examine issues that were not raised by the taxpayer or award amounts exceeding those contested.
Subject to the tax laws and regulations in force, the Objections Committees apply the procedures followed before the summary-judgment courts. Their decisions are taken by majority vote and must state the reasons on which they are based.
The rapporteur must notify the committee's decision within thirty days from its issuance to the head of the competent tax department in the Revenue Directorate or the regional finance offices, the head of the tax unit in matters relating to the Value Added Tax Directorate, and the objector. The objector is notified in accordance with the notification procedures set out in the Tax Procedures Law.
The head of the competent department in the Revenue Directorate or the regional finance office in the governorates must notify the Revenue Director, through the administrative hierarchy, of the Objections Committee's decision, together with a recommendation on whether or not to appeal it. The Revenue Director then refers the file to the Tax Legislation Department for review before making a final decision on whether to appeal before the State Council.
In matters relating to the Value Added Tax Directorate, the Tax Legislation and Policies Department reviews the file and forwards it through the administrative hierarchy to the Director of Value Added Tax for a final decision on whether or not to appeal.
State Council
Both the taxpayer and the tax administration may appeal a decision of the administrative court or the Objections Committee before the State Council in accordance with its procedural rules within one month from the date of notification of the decision. This is a forfeiture deadline for both the tax administration and the taxpayer.
An appeal filed by the taxpayer is admissible only if the taxpayer deposits security equal to five percent (5%) of the contested amounts of tax and penalties, excluding the late-payment penalty. Any appeal not accompanied by a receipt proving payment of the security deposit is rejected on procedural grounds.
When the final decision is issued, if the appeal is accepted, the security deposit is applied toward payment of the tax due and any remaining balance is refunded to the taxpayer.
If the appeal is rejected, the security deposit paid in accordance with Article 101 of the Tax Procedures Law and the security deposit paid under this provision are forfeited.
Security deposits may be paid in cash at Treasury offices. They may also be paid through banks operating in Lebanon or their branches, through any LibanPost office, or through any other company contracted by the Ministry of Finance for this purpose.
Common Provisions
When a taxpayer files an objection before the tax administration, all compulsory collection procedures are temporarily suspended pursuant to Article 66 of the Tax Procedures Law until the taxpayer is notified of the final decision issued on the objection. This suspension applies only to collection of the contested tax. Collection penalties continue to apply in accordance with Item 3 of that article. The tax administration also retains the right to offset amounts owed by the taxpayer against amounts due to the taxpayer and may send the taxpayer a letter or notice.
The late-payment penalty provided for in Article 55 of the Tax Procedures Law continues to accrue throughout the objection period, provided that this period does not exceed 12 months from the date on which the objection was filed within the legal deadline before the tax administration.
If the final decision is issued in favor of the tax administration by rejecting the objection on procedural grounds, the collection penalty is recalculated from the beginning of the period during which its accrual had been suspended. If the objection is accepted procedurally but rejected or amended on the merits, the collection penalty applies from the date of the final decision.
If the objection is accepted in whole or in part by the tax administration, the Objections Committees, or the State Council, a taxpayer who has already paid the assessed amounts is entitled to recover any excess amount paid together with the statutory interest due on that balance.