Start of Business

Start of Business

The start of business declaration must be submitted by the taxpayers listed below:

1. Capital companies: joint-stock companies, limited liability companies, partnerships limited by shares, holding companies, and offshore companies.
2. Partnerships: general partnerships, limited partnerships, and civil companies.
3. Institutions exempt from tax on industrial, commercial and non-commercial profits: including, but not limited to, universities, associations, schools, and similar institutions.
4. Institutions temporarily exempt from income tax on profits: for example, industrial institutions that have been granted exemption under specific conditions.

All the categories mentioned above are responsible for declaring the start of business of their employees.

When a company starts a new activity, or carries out the same activity in another place of business, this is considered a branch of the company and not a new start of business. In such case, the company must submit an information amendment declaration.

When should registration take place?

Every person who starts a new business must notify the financial authorities within two months from the date of starting the business.

The start of business dates are determined as follows:

• Capital companies: the date of registration of the company in the Commercial Register.
• Partnerships: the date of registration in the Commercial Register.
• Institutions exempt from tax on profits:
  • Capital companies and partnerships: the date of registration of the company in the Commercial Register.
  • Individual establishments:
    • The date of the first activity that may generate taxable income subject to tax on profits.
    • The date of registration in the Commercial Register.
    • The date of issuance of any document proving a commercial transaction, such as an invoice or receipt.
    • The date of employing an employee.
    • The date of renting or using a place to practice the profession or activity.
    • If several criteria apply, the earliest date shall be adopted.
  • Associations, schools, universities, and hospitals owned by non-profit associations: the date of license or official notification.
• Employees: from the date of employment.

Start of Business Declarations

The required documents and forms can be viewed through the following link:

Required Documents

Penalties

1. Any person who does not submit a registration request to the tax administration within the legal deadlines shall be subject to a penalty of:
   • LBP 2,000,000 for joint-stock companies.
   • LBP 1,000,000 for partnerships, limited liability companies, and institutions exempt from tax.
   • LBP 300,000 for individuals and other taxpayers.
2. Any employer who does not register employees with the tax administration shall be subject to a fixed penalty of LBP 50,000 for each employee who is not registered within the specified deadlines, or in case incorrect information is provided.

When the start of business declaration includes an activity subject to more than one type of tax, the declaration is considered a declaration for all types of taxes, except Value Added Tax.

When is registration for Value Added Tax required?