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Law No. 182 dated 12/06/2020 amending the Law No. 83 dated 10/10/2018 relating to the protection of whistleblowers

The here below Law No. 182 dated 12/06/2020, published in the Official Gazette No. 25 dated 12/06/2020, added to article 9 of the Law No. 83 dated 10/10/2018 relating to the protection of whistleblowers, the following paragraph:

Whistleblowers benefit from all the provisions of this Law if they present their disclosure to the competent prosecutor’s office in addition to the Commission. Corruption detectors, witnesses, experts and victims also benefit from the guarantees provided for in the provisions of all paragraphs of chapter seven-bis (articles 370-2 to 370-6) of the Code of Criminal Procedures by virtue of the Law No. 164/2011 on the suppression of human trafficking.

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Decision No. 255/1 dated 07/06/2020 relating to the determination of the implementing provisions of articles 1 and 2 of the Law No. 160 relating to the legal deadlines for tax rights and obligations which fall within the competence of the Public Finance Directorate.

The Ministry of Finance (MoF) has issued the here below Decision No. 255/1 dated 07/06/2020 published in the Official Gazette No. 44 dated 12/11/2020 relating to the determination of the implementing provisions of articles 1 and 2 of the Law No. 160 relating to the legal deadlines for tax rights and obligations which fall within the competence of the Public Finance Directorate.

The deadlines provided for by the Law No. 160 dated 05/08/2020 relating to the exercise of taxpayers, including diplomatic and consular institutions and international organizations, their rights and the fulfillment of their fiscal obligations, in particular those stipulated in the Law on fiscal procedures as well as in other laws, and the provisions contained in the Law No. 6 dated 05/03/2020 (Budget Law and annexed budgets of 2020) relating to taxes and fees, and in particular:

A) Concerning the deadlines relating to taxpayer’s obligations:

· The declaration relating to the start of activity;

· The application for registration of an employee.

· The application for registration for the value added tax.

· The submission of periodic and annual declarations related to all types of taxes and fees;

· The request for modification of the information.

· Cessation of activity.

· The submission of the declaration relating to the beneficial owner.

· The forced settlement of taxes and fees.

· The request relating to the installment of inheritance tax.

· Registration of documents and records.

B) Concerning the rights granted by virtue of the Law on Tax Procedures as well as by other tax laws:

· The response to the preliminary results assessment;

· The objection to the tax adjustment before the Tax Administration;

· The objection before the Objection (Appeal) Committee;

· The filing of an appeal of the Objection Committee’s decision before the State Council.

C) Concerning the rights and obligations provided for in Law No. 6 of 5/3/2020 (Finance Law and related Budgets 2020):

· Article 20 relating to the imposition of an additional tax payable by banks, financial institutions and financial intermediation institutions according to its turnover for the year 2019.

· Article 22 relating to certain articles provided for by the Law No. 144 dated 07/31/2019 (General budget and annexed budgets for 2019).

The suspension of the deadlines provided for by the Law No. 160 of 05/08/2020 includes moreover the deadlines relating to the exercise by the tax administration of its rights and obligations and in particular:

– The deadlines relating to the completion of the adjustment and the notification to taxpayers of the preliminary results.

– The deadlines relating to the issuance of final adjustments in response to the preliminary adjustment results;

– The deadlines relating to the recovery of main and additional taxes and fees.

– The deadlines to decide the restitution requests submitted before the Tax Administration;

– The deadlines to decide on the objections submitted before the Tax Administration; The deadlines to appeal the decisions of the Objection Committee before the State Council and to prepare a reply

This Decision also specifies the suspended deadlines relating to the exercise by the tax administration and by the taxpayers of their rights and obligations.

The period between 10/18/2019 and 7/30/2020 shall not be counted within the deadlines granted to taxpayers to fulfill their tax obligations related to all types of taxes and fees which are collected by the Public Finance Directorate.

The period between 10/18/2019 and 7/30/2020 shall not be counted within the deadlines granted to the tax administration to recover all kinds of taxes and fees which are collected by the Public Finance Directorate.

The deadlines set by the tax administration for the taxpayer to undertake a specific procedure the law did not provide for a legal deadline in compliance with the provisions of Clause 1 of Article 9 of the Tax Procedures Law do not benefit from the provisions of the suspension

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MoF Decision No. 245/1 dated 07/06/2020 relating to the determination of the elements constituting the turnover of banks, financial institutions and financial intermediation companies to be adopted in order to settle the flat-rate tax provided for in article 20 of the Law No. 6/2020

The Ministry of Finance (MoF) has issued the here below Decision No. 245/1 dated 07/06/2020 published in the Official Gazette No. 44 dated 12/11/2020 determining the elements constituting the turnover of banks, financial institutions and financial intermediation institutions to be adopted in order to settle the flat-rate tax provided for in article 20 of Law No.6/2020. Indeed, constitutes the turnover:

a) Concerning banks, financial institutions and financial intermediaries which adopt form (B1) for the annual declaration of the activity’s results: in the aggregate the sum of the accounts of the seventh category contained in form B13 (declaration of profit and loss) of the aforementioned declaration and consequently of the declaration attached to the Decision.

b) Concerning financial intermediation institutions which adopt form (S1) for the annual declaration of the activity’s results: in the aggregate the sum of the accounts of the seventh category contained in form s16 (declaration of profits and losses) of the aforementioned declaration and consequently the declaration attached to this Decision.

The tax shall be paid by virtue of tax rolls attached to the decision (S 13), a copy of which shall be given to the Ministry of Finance, similar to the invoice relating to article 51 of the Law No. 497/2003 and its modifications, in order for the competent authority before the Ministry of Finance to register it in the tax system provided for this purpose.

The tax paid by each bank, financial institution and financial intermediation company is considered to be a deductible charge from the income of the fiscal year 2020, and the penalty paid due to late payment (if any) of the tax within the deadline provided for in article 20 of the Law No. 6/2020, or the due penalty which must be paid and the amount of which is less than what is due, is considered to be a deductible charge.

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MoF Decision No. 244/1 dated 07/06/2020 relating to the tax treatment of profits made by insured in the form of investment returns as regard to the premiums paid to insurers and underwriters.

The Ministry of Finance (MoF) has issued the here below Decision No. 244/1 dated 07/06/2020 published in the Official Gazette No. 44 dated 12/11/2020 relating to the tax treatment of profits made by insured in the form of investment returns as regard to the premiums paid to insurers and underwriters, by adding a new paragraph to article 2 of the MoF Decision No 393/1 dated 22/4/2017.

Thus, the net profits referred to in the first paragraph of the said article are determined by the difference between the paid amounts by the insurance company to the insured or to the contracting party and the value of the premiums relating to the investment and allotted to the constitution of the funds. Shall not be included however in the calculation of these premiums:

– Life insurance premiums.

– Commissions paid to brokers and intermediairies.

– All expenses collected by the insurance company.

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MoF Decision No. 243/1 dated 07/06/2020 relating to the determination of the implementing provisions of the Law No. 160/2020 concerning the exemption of donations granted due to the spread of the Coronavirus.

The Ministry of Finance (MoF) has issued the here below Decision No. 243/1 dated 07/06/2020 published in the Official Gazette No. 44 dated 12/11/2020 relating to the determination of the implementing provisions of the Law No. 160 dated 05/08/2020 concerning the exemption of donations granted for the benefit of public administrations, institutions and municipalities funded by sources in Lebanon due to the spread of the Coronavirus.

In fact, are exempt from all taxes and fees, import operations related to donations received by the administrations of the State, public institutions and municipalities granted by internal sources in order to fight against the spread of the Coronavirus, provided that the donations are accepted in accordance with the laws and rules in force.

In order to benefit from the said exemption, the following conditions must be met:

– The donation must be used exclusively to fight against the spread of the Coronavirus;

– A draft form of putting in local consumption IM4 should be organized, and the legal documents necessary for customs clearance of the goods should be attached, in particular the text relating to the acceptance of the donation, in accordance with legal principles, provided however to obtain the authorization allowing to include the code 200 to the list of cases which benefit of the exemption or reduction of fees provided for in cell No. 37 of the customs declaration.

– The party benefiting from the exemption must mark the draft import declaration indicating that the goods that shall be exempted are intended to be used exclusively to fight against the spread of the Coronavirus. In the event that the imports are part of the financial donation, the form should also be marked by indicating that the goods that shall be exempted are purchased from the granted donation.

– Following the completion of the form’s several steps, the donations shall be registered in a special exemption register before the Beirut Customs Presidency, in return of a commitment from the concerned parties to present a receipt certificate within three months as of the date of exit of the goods from the customs.

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What Tax Policy for Lebanon? Lessons from the Past for a Difficult Future

73889bcc-18c6-4fcd-b702-a36525800cb5What Tax Policy for Lebanon? Lessons from the Past for a Difficult Future
DATE: MONDAY 2 Nov. 2020
TIME: 4pm-5:30pm (Beirut time)
Registration link: https://us02web.zoom.us/webinar/register/7016037307852/WN_553QCFhQTtyeRnryTpp1mw

Speakers:
•    Karim Daher, Attorney at Law, member of the UN FACTI panel, President of the Lebanese Association for Taxpayers’ Rights (ALDIC)
•    Alain Bifani, former Director General of Finance, Ministry of Finance in Lebanon
•    Lydia Assouad, PhD Candidate at the Paris School of Economics, research fellow at the World Inequality Lab
Moderator:
•    Ishac Diwan, Professor of Economics, Paris Sciences et Lettres
Overview:
The goal of this webinar is to evaluate the Lebanese taxation system and to think of how to make it more inclusive, fair, and efficient. The discussion will focus on the recent performance of the taxation system and explore future reforms by contrasting the needs in the near future to support the stabilization and recovery phase, and in a second phase to support a new sustainable growth model anchored in both competitiveness and social justice.

You can register to attend by clicking the button below. You will receive a Zoom confirmation email should your registration be successful. Alternatively, you can watch the event live on our Facebook page.

The webinar will be in English with Arabic interpretation available on Zoom only.

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Law No. 194 dated 16/10/2020 relating to the protection of the damaged and affected areas and their reconstruction following the explosion of the port of Beirut.

The Law No.194 dated 16/10/2020 (here below), relating to the protection of the damaged and affected areas and their reconstruction following the explosion of the port of Beirut was published in the Official Gazette Journal No. 41 dated 22/10/2020.

In fact, it should be highlighted herein that the Draft Bill proposed by the Aldic (ref: Your Rights/Draft Bills) has been fully incorporated into article 6 of this Law which is related to exemptions from taxes and fees. This Draft Bill was presented in order to mitigate the serious consequences that could result if the provisions contained in the Decree-Law No. 146/1959 were applied, in particular articles 16 and 44 of this Decree-Law on aid and donations provided for the benefit of the victims of the explosion and thus prevent a return of the tax authorities a posteriori against the taxpayers benefiting from any aid in cash or kind (repair of windows, woodwork, renovation of facades …) which would exceed 1,600,000 LBP for natural persons and 100,000,000 LBP for charities. It should be noted in this regard that in accordance with aforesaid articles 16 and 44 of the Decree-Law No. 146/1959, are only exempted from taxation, donation not exceeding 1,600,000 LBP (the surplus being taxed) as well as donation granted to a charitable or sport or cultural or religious or artistic association, not exceeding 100,000,000 LBP (the surplus being taxable).

This being said, the main objective of this Law is to protect the affected areas, to encourage donations and aid, to avoid any intention aiming to profit from the damaged properties or to carry out a posteriori blackmail against the beneficiaries of this aid.

According to this Law, are subject to deduction from the taxable income, all aids and donations made by companies subject to the income tax on the basis of actual profit (article 7-9 of the Income Tax Law) as well as sums paid by these companies aiming to overcome the damages suffered by taxpayers and citizens owing to the explosion of the port of Beirut, as of 05/08/2020 and until 31/12/2021, whether the donations have been provided directly to the concerned persons or indirectly through institutions, organizations and associations and thus, up to an amount equivalent to their annual net profit during the year in which the aid was granted, provided that these aids are supported by supporting documents.

All the donations and local or foreign aids provided to public administrations and institutions, municipalities, the federation of municipalities and other persons of public law, by virtue of a letter issued by the High Relief Commission are exempt from taxes. In order to benefit from the exemption provided for by this Law, the names of local and foreign associations, religious organizations and communities, and persons of public law which contribute in any way to the reconstruction, restoration and repair of damaged areas, shall be registered before the High Relief Commission and/or before a committee chaired by the Lebanese Army.

In order to ensure that the assistance is distributed in full transparency and to help the greatest number of people affected by the explosion, the aforementioned associations are required to draw up a detailed list of aid and donations in cash and in kind before the High Relief Commission and/or a committee chaired by the Lebanese army.

Donations and foreign aid in cash and in kind as well as all the transactions aimed at their execution are exempt from:

· All fees, especially the fiscal stamp duty and customs fees, including the minimum customs, financial and port fees, and the fee imposed by virtue of Article 59 of Law No. 144 dated 31/07/2019 (General Budget Law and annexed Budgets for 2019)

· VAT (Value Added Tax) on import transactions and operations related to these donations and aids.

Besides, the said Law exempts, with the right to deduct, money delivery operations and services which are subject, by nature, to the value added tax, provided by natural or legal persons, to the benefit of these administrations, public institutions, municipalities, federations of municipalities and other persons of public law, associations, organizations and religious communities, in execution of these donations and aid.

Likewise, this Law also exempts, with the right to deduct, money delivery operations and services which are subject, by their nature, to value added tax, and which are supplied by individuals or legal entities, for the benefit of these administrations, public institutions, municipalities, federations of municipalities and other persons of public law, associations, organizations and religious communities, in execution of these donations and aid.

Those who lost their vehicles in the explosion will also be exempt from taxation in connection with the said vehicles.

Contrary to the provisions of articles 16 and 44 of Decree-Law No. 146 dated 06/12/1959 and its amendments (Law on inheritance tax), all aid and donations in cash and in kind provided to associations, organizations, religious communities, persons of public law and natural persons affected by the port explosion are exempt from inheritance tax, regardless of the extent of the damage suffered, thus escaping the application of the brackets and limits provided for by the aforementioned articles 16 and 44.

Likewise, and contrary to the provisions of article 15 of the Decree-Law No. 146/1959, the amounts provided for in life insurance policies are exempt from inheritance tax insofar as the beneficiaries of this life insurance are the legal heirs of a Lebanese person who died following the explosion of the port of Beirut.

 

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