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MoF Decision No. 267/1 dated 22/04/2021 relating to the exemption of the transfer of shares and bonds from the fiscal stamp duty

The Ministry of Finance (MoF), has issued and published the here below Decision No 267/1 dated April 22, 2021 (Official Gazette No 17 dated 29/04/2021) that lists documents and securities exempted from the fiscal stamp duty in order to develop the Lebanese financial market. Among those documents and securities figures CDs, bonds, transfer of shares agreements, Lebanese treasury bonds. However, it should be highlighted that contrary to a well-established custom, the Ministry has conditioned and limited the exemption to the sole transactions executed in the financial market. Thus, it has interpreted implicitly the intention of the legislator and even distorted it by adding provisions which are not envisaged by the law. Therefore, it is to be feared that this does not correspond to an extensive interpretation of the law and therefore to an excess of power and consequently to an infringement of the principle of parallelism of forms and competences and hierarchy of norms, given that a law or decree can only be changed by another law or another decree.

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MoF Decision No. 142/1 dated 22/03/2021 relating to the collection of the inheritance tax on the value of the compensation for the expropriation of property of a deceased

The Ministry of Finance (MoF), has issued and published the here below Decision No 142/1 dated March 22, 2021 (Official Gazette No 13 dated 01/04/2021) which presents three possible cases concerning the application and the collection of the inheritance tax on the value of the compensation payable for the expropriation of property of a deceased. The solutions differ depending on whether the expropriation order and the attachment decision are both issued after the date of death, before it, or one before and the other after. In the first assumption, no inheritance tax are imposed on the value of the expropriation indemnity, but the immovable property enters into the estate and the transfer costs will be calculated based on the whole area of the immovable property. In the second assumption, inheritance tax applies based on the areas acquired. Finally in the third assumption, the inheritance taxes apply on the value of the entire real estate.

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MoF Decision No. 148/1 dated 26/03/2021 implementing the provisions of articles 2 and 3 the Laws No 199/2020 relating to the extension of the suspension of legal and tax obligations and tax exemptions.

The Ministry of Finance (MoF), has issued and published the here below Decision No 148/1 dated March 26, 2021 which has determined the modalities of implementation of articles 2 and 3 of the Law No 199 dated 29th December 2020 that had further extended the suspension of the legal and tax obligations set by the Law No 160/2020 and the Law No 185/2020 and granted some tax discounts and exemptions.

This MoF decision has extended till the 27th August 2021 (inclusive) the deadline to benefit from the following articles of the Law #144 (Budget Law 2019):

  •  Article 21: Total exemption on tax penalties due by governmental entities for infringements occurred before the 1/8/2019.
  • Article 32: 85% discount on tax penalties for infringements occurred by taxpayers before the 1/8/2019.
  • Article 38: Additional deadline for tax objections.
  •  Article 39: Total exemption on penalties due by taxpayers concerned by the application of the Article 53 of the Income Tax Law for violations occurred till the year 2018.
  •  Article 40: Settlement by installments of unpaid taxes withheld at the source and Value Added Tax related to periods before the 31st December 2018.
  • Article 41: Amnesty equal to 50% of the amounts of the objected tax adjustments (excluding penalties) held at the objection committee but not yet concluded by the latter as at 31 March 2019.
  • Article 49: Exceptional Revaluation of fixed assets recorded in the books of the taxpayer before the 1st January 2019 at the condition that its revaluated value should not exceed its market value as at 31 March 2020. The revaluation variance is subject to 3% tax and should be paid together with a request for approval from the Ministry of Finance who has the right to refuse it.
  • Article 51: Obligation to Municipalities to provide the Ministry of Finance before the 31st December 2019 with a comprehensive survey of all the entities and individuals occupying non-residential properties in their jurisdictions.
  • Article 58: Smoking licenses for touristic establishments.
  • Article 69: Rescheduling of the tax installments established before 1/8/2019.

This MoF decision has also extended till 30th June 2021 the payment of the taxes defined by the Law No 160 and the Law No185 in addition to those that were due before the date of this decision. All the tax installments that were due during the period of suspension of the legal and tax obligations set by the Law No 160 and the Law No 185 are to be settled before the 30th June 2021 without delay penalties.

It is worth noting that the article 5 of this MoF decision has clearly specified that the deadlines for the tax fillings have not been extended and have to be submitted according to the schedule set in the former MoF Memo No 1000 dated 8 December 2020 that defined the new deadlines for the tax filling according to the Law No 85 dated 19th August 2020. However, the tax deadlines that have fallen during the total lockdown period from 14th January 2021 till 7th February 2021 or within any other lockdown period will be extended by this lockdown period starting from the 7th February 2021 or from the ending date of any other lockdown period.

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MoF Decision No. 35/1 dated 28/01/2021 relating to the mechanism for benefiting of the tax reduction in connection with the protection of the environment.

The Ministry of Finance (MoF), has issued and published the here below Decision No 35/1 dated January 28, 2021 (Official Gazette No 5 dated 04/02/2021) specifying the modalities of application of the tax reduction procedure in accordance with the provisions of Article 20 of the Law on Environmental Protection No 444 dated 29/07/2002. In this regard, any taxpayer who would like to benefit from the tax reduction relating to activities that protect the environment under the conditions provided in Decree No. 167 of 17/12/2017, should submit a request to this effect to the Ministry of environment. Having received a preliminary approval, the taxpayer should complete the applications attached to Decree 18/1 dated 13/01/2020, and attach them to the annual tax return, as well as a declaration from the Ministry of the Environment proving receipt of this request as well as a copy of the documents presented. The legal tax reduction is mentioned in the income tax return under the category reserved for special exemptions. It is only considered legal and deductible after a decision adopted by the Ministry of the Environment to this effect. If the request is refused, the beneficiary of the reduction should pay the entire reduced tax with the fines provided for in Article 110 of the Tax Procedures Law, as well as the fines due for late payment. The Ministry of the Environment decides on the request within 15 days from the day on which the taxpayer’s request is submitted, otherwise the request is considered as tacitly accepted.

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MoF Decision No. 801/1 dated 24/12/2020 relating to the determination of the estimated value of the elements of the inheritance located outside Lebanese territories and subject to inheritance taxes.

The Ministry of Finance (MoF), has issued the Decision No 801/1 dated December 24, 2020 (here below), published in the Official Gazette No 51 dated 31/12/2020, which indicates the procedures for determining the estimated value of inheritance assets located abroad. First, it defines the assets as any movable or immovable property located abroad, either transferred by a Lebanese or a foreignor residing in Lebanon without prejudice to the provisions to the contrary of the double taxation treaties duly signed by Lebanon with the concerned foreign country. In addition to that, it defines the Lebanese resident as every person to whom apply the provisions and criterions of clause 11 of the first article of the Law No. 44 dated 11/11/2008 (law on tax procedure).

Finally, it specifies that the determination of the estimated value of property located abroad is carried out on the basis of an official declaration emanating from the competent official bodies in the state concerned, including a detailed list of these assets with their estimated value, under the condition that this declaration be agreed by the diplomatic body representing Lebanon in this State, as well as the agreement of the Minister of Foreign Affairs in Lebanon.

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MoF Notification No. 2528/1 dated 03/08/2020 relating to the presentation of personal formalities and paperwork of taxpayers to the Department of Value Added Tax by email.

The Ministry of Finance (MoF), has issued and published the here below Notification No 2528/1 dated August 3, 2020 (Official Gazette No 13 dated 01/04/2021) by imposing on taxpayers the obligation to submit their formalities and paperwork online at the mentioned email. No request in person is admissible. Notices of receipt, as well as the presentation of taxes due are available on the website of the Ministry of Finance.

 

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MoF Decision No. 54/1 dated 15/02/2021 extending the deadline for filling the declaration of income from foreign movable assets of Lebanese residents.

The Ministry of Finance (MoF), has issued and published the here below Decision No 54/1 dated 15th February 2021 which has extended the deadline for filling the declaration of income from foreign movable assets until the 31st March 2021 knowing that the payment of the related 10% tax on these proceeds is due before the 1st April 2021.

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MoF Decision No. 47/1 dated 08/02/2021 implementing the provisions of the Laws No 185/2020 and 194/2020 relating to tax exemptions.

The Ministry of Finance (MoF), has issued and published the here below Decision No 47/1 dated February 08, 2021 which has determined the modalities of implementation of the tax exemptions mentioned in the article 4 of the Law #185 dated 19th August 2020 and in the article 6 of the Law #194 dated 27th August 2020. These exemptions cover income tax, inheritance tax and built property taxes to the benefit of the taxpayers who suffered from the Beirut Port blast of the 4th August 2020.

According to the article 2 of this MoF decision, any donation granted between the 5th August 2020 and the 31 December 2021 directly or indirectly through an NGO to persons or taxpayers having suffered from the Beirut Port blast of the 4th August 2020 is considered as an income tax deductible expense for the entity granting this donation subject to certain conditions listed in the article 3 of this decision.

However, the article 4 of this MoF decision didn’t exempt the entity or person receiving this donation from the income tax contrary to the paragraph 5 of the article 6 of the Law #194/2020 that exempted all donations from any tax or fees.

On the other hand, the article 5 of this MoF decision clarifies how to record the damaged tangible assets in the accounting books of the corporate taxpayers having suffered from the Beirut Port blast:

  • If the tangible asset is totally damaged, its net book value as at 31 December 2019 should be written-off as an extraordinary loss deductible from the taxable profit subject to income tax.
  • If the tangible asset is partially damaged, the rehabilitation costs have to be capitalized and depreciated at the same rate used for the depreciation of the initial tangible asset.

The losses resulting from the write-off of the totally damaged tangible assets and inventory can be carried forward for 5 additional years starting from the fiscal year 2020 (i.e. till the FY 2028).

Article 6 of this decision requires from the taxpayers, who suffered a total destruction of their accounting records and archives from the Beirut Port blast, to reconstruct these accounting records for the period from the fiscal year 2012 till the 27th August 2020 (date of the Law #194/2020) by requesting copies of the destroyed documents from third parties such as bank statements, customs manifest, invoices and related documents from clients and suppliers, and from their audit reports.

This decision also exempted the families of the deceased persons from the inheritance tax and the buildings in the damaged area from the built property tax for the years 2020 and 2021

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Memo of the National Social Security Fund (NSSF) No. 654 dated 07/01/2021 concerning the implementing provisions of the Law No. 199 dated 29/12/2020 relating to the extension of the deadlines and the granting of certain tax exemptions.

The National Social Security Fund (NSSF) has issued and published the here below Memo No.654 dated 07/01/2021, extending till August 27th 2021 the discount on penalties mentioned in the articles 22 & 23 of the Budget Law 2020 (Law #6/2020) and the suspension of deadlines until the 30th June 2021 in compliance with the Law #199 of the 29th December 2020.

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MoF Decisions No. 11/1 and 14/1 dated 12/01/2021 extending the delay for the declaration and payment of taxes on wages & slaries as well as VAT.

The Ministry of Finance (MoF), has issued and published the here below Decisions No 11/1 and 14/1 dated 12th January 2021 which have extended the deadlines to present the 4th quarter of 2020 Tax on wages & salaries (R10) and Value Added Tax (VAT) declarations and the payment of the related taxes until the 15th February 2021 inclusive.

 

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