Decision of Ministry of Finance No. 620/1 dated August 21, 2018 relating to the implementing provisions of articles 23, 47 and 48 of the Budget Law No. 144 dated 31/07/2019

The Ministry of Finance (MoF), has issued and published the here below Decision No. 620/1 dated August 21, 2019  defining the implementing provisions of articles 23, 47 and 48 of the Budget Law No. 144 dated 31/07/2019.

This MoF decision clarifies on the one hand that a seventh tax bracket was added for taxpayers whose salaries and wages exceed 225 million Lebanese Pounds (150,000 USD) (article 23 of the Budget amending article 58 of the Income Tax Law).

The new progressivity is as follows:

  • 2% on the portion of the net taxable income not exceeding 6,000,000 LBP.
  • 4% on the portion of the net taxable income exceeding 6,000,000 LBP and not exceeding 15,000,000 LBP
  • 7% on the portion of the net taxable income exceeding 15,000,000 LBP and not exceeding 30,000,000 LBP
  • 11% on the portion of the net taxable income exceeding 30,000,000 LBP and not exceeding 60,000,000 LBP.
  • 15% on the portion of the net taxable income exceeding 60,000,000 LBP and not exceeding 120,000,000 LBP.
  • 20% on the portion of the net taxable income exceeding 120,000,000 LBP and not exceeding 225,000,000 LBP.
  • 25% on the portion of the net taxable income exceeding 225,000,000 LBP.

 

The tax rebates currently in force (a deduction applied to a given amount before the calculation of the taxable income) defined by virtue of article 31 of the Income Tax Law will be applicable and deducted from the taxable base.

 

On the other hand, the said decision determines the implementing provisions of the taxation of retirement pensions on income tax.

This taxation will be as follows:

 

  • 1% on retirement pensions not exceeding LBP 6 million (4,000 USD).
  • 2% on pensions ranging from 6 million Lebanese pounds (4,000 USD) to 15 million Lebanese pounds (10,000 USD).
  • 3,5% on pensions ranging from 15 million Lebanese Pounds (10,000 USD) to 30 million Lebanese Pounds (20,000 USD).
  • 5,5% on wages and salaries and pensions ranging from 30 million Lebanese Pounds to 60 million Lebanese Pounds (40,000 USD).
  • 7,5% on pensions ranging from 60 million Lebanese Pounds (40,000 USD) to 120 million Lebanese Pounds (80,000 USD).
  • 10% on pensions ranging from 120 million Lebanese Pounds to 225 million Lebanese Pounds (150,000 USD).
  • 12.5% on retirement pensions over 225 million Lebanese Pounds.

 

A tax rebate (a deduction applied to a given amount before the calculation of the taxable income) of ten million Lebanese Pounds (LBP 10,000,000) or approximately 6,600 USD is added to the other granted family allowances and will be deducted from the taxable base.

 

Finally, this decision assimilates the indemnities paid by the professional orders (including liberal professions), mutuals and insurance companies (insurance pensions) to the retirement pensions covered by this decision.

Download (PDF, 182KB)