Tax Structure

Summary of the Tax Structure

December 2003

SUMMARY OF THE TAX STRUCTURE

1. Personal Income Tax

Nature of tax - Comprehensive encompassing all sources of income earned in Lebanon (both monetary and in- kind). - For non- residents, not applicable to income earned outside a permanent establishment. - Consists of a number of scheduler income taxes. Rates and personal exemptions differ from one tax to another. ▪ Tax on commercial, industrial profits and professional income ▪ Tax on wages and salaries ▪ Tax on income from movable capital Income on moveable capital is defined as: ▪ Various incomes resulting from shares, shares in interest and founders’ share issued by joint stock companies or financial, industrial, commercial, civil and other public or private bodies; ▪ Directors’ fees; ▪ Fees paid to shareholders for attending general assemblies; ▪ Sums taken out of the reserves or profits for redeeming or depreciating shares, shares in interest and founders’ shares before the suspension of activities; ▪ Distribution of reserve funds and profits effected in the form of free shares or in any other form; ▪ Interest proceeds and revenues of debentures and loans granted by the state, the municipalities and other public or private bodies and institutions and by companies; ▪ Premiums paid to creditors and debenture holders; ▪ Interest on security debts, their proceeds and revenues; ▪ Interest on preferential and ordinary debts, their revenues and income, unless resulting from commercial operations; ▪ Interest on deposits and monies in trust, whatever be the trust and whoever may be the owner thereof; and current accounts, the proceeds and revenues thereof. Rates - Tax on movable capital: 10%, withheld at source on the gross receipts without any deduction or payable when filing the annual tax return. - Tax on commercial, industrial profits and professional income: on individuals and partnerships carrying on commercial and industrial activities. Assessed on real profits...