Auditor’s Report
A report prepared by a licensed expert office expressing its opinion on the financial statements for the relevant fiscal period, and whether these statements fairly present the financial position in accordance with the applicable accounting and auditing rules, or stating any reservations or qualifications regarding those statements, if any.
Persons Required to Submit an Auditor’s Report
- All capital companies carrying out business, regardless of the volume of such business, as well as branches of foreign companies resident in Lebanon.
- Capital companies that declare a profit in any year and that carried out business in previous years.
- Partnerships whose turnover exceeds LBP 750,000,000 or whose number of employees exceeds 25.
Note: The Commercial Code requires joint-stock companies, S.A.L., under Article 172, to appoint auditors in the constitutive general assembly or in the ordinary general assemblies held for this purpose. Auditors may not be appointed for a first term renewable for more than three years.
As for limited liability companies, S.A.R.L., the Commercial Code provides that an auditor must be appointed when the number of partners exceeds five, or when the company’s capital or number of partners reaches the legally required threshold. The appointment is made by a decision issued by the president of the court within whose jurisdiction the company’s head office is located, upon the request of the board of directors during the two months following the incorporation of the company. A similar decision is then issued each year during the month following the ordinary general assembly.
In all cases, partners may not appoint more than one auditor on behalf of the taxpayer.
Deadline for Submitting the Auditor’s Report
Before the first of September of the year following the business year for capital companies.
Before the first of July for taxpayers following a special fiscal year.
Taxpayers following a special fiscal year must submit the report to the Revenue Directorate within three months from the expiry of the declaration deadline.
Note: The auditor’s report and the attached financial statements may be submitted in French or English, as they are considered essential documents. The tax administration retains the right to request from the taxpayer an official translation into Arabic, at the taxpayer’s expense and responsibility, of any contracts, correspondence or documents it needs, in accordance with Article 31 of Law No. 44 dated 11/11/2008, the Tax Procedures Law.
Penalties in Case of Delay
Assessment penalty, Article 112 of the Tax Procedures Law:
5% of the tax due according to the declaration for each month of delay, with any fraction of a month considered a full month, starting from the expiry of the tax deadline, provided that the penalty is not less than:
- LBP 750,000 for joint-stock companies, including joint-stock companies benefiting from exemptions.
- LBP 500,000 for partnerships required to submit this report and for limited liability companies, including companies benefiting from exemptions.
Collection penalty: 1% for each month of delay on the assessment penalty, starting from the expiry of the report submission deadline, with any fraction of a month considered a full month.