Non-Practice of Business
A taxpayer who meets the conditions for starting a business but does not intend to actually carry out the activity must submit a registration request within the specified deadline, together with a declaration of non-practice of business.
The taxpayer must also submit this declaration annually to the competent tax unit, within the legal deadline applicable to the income tax declaration.
The declaration of non-practice of business is submitted to the competent tax unit using the form approved by the Ministry of Finance.
Taxpayers who submit the annual declaration of non-practice of business are exempt from the obligation to keep legal records and to submit income tax declarations and the related financial statements, until the business is actually carried out. Once the activity begins, the procedures related to starting a business apply.
Delay in submitting the declaration of non-practice of business:
In case of delay in submitting the declaration of non-practice of business, the penalty provided for in Article 109 of the Tax Procedures Law is imposed as follows:
- LBP 750,000 seven hundred and fifty thousand Lebanese pounds for joint-stock companies.
- LBP 500,000 five hundred thousand Lebanese pounds for partnerships, limited liability companies, and institutions exempt from tax.
- LBP 100,000 one hundred thousand Lebanese pounds for individuals and other taxpayers.
In addition, a late payment penalty (collection penalty) of 1% is applied on the unpaid due tax, plus the assessment penalty, starting from the expiry date of the original declaration deadline.