Category: Notifications & Regulations

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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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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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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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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The National Social Security Fund (NSSF) has issued and published the here below Memo No.654 dated 07/01/2021, extending till August 27^th 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 29^th December 2020.

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The Ministry of Finance (MoF), has issued and published the here below Decisions No 11/1 and 14/1 dated 12^th 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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The Ministry of Finance (MoF), has issued and published the here below Notification No. 114/S1 dated 15/01/2021 to remind the taxpayers undertaking industrial, commercial and non-commercial activities or professional services to invoice the end consumer in LBP including the VAT amount (i.e. the VAT amount should represent 11% of the initial invoice amount in LBP) and give him a copy of this invoice in compliance with the Article 25 of the Consumer Protection Law. Any infringement to this regulation will be criminally prosecuted and will subject the offender to applicable taxes and penalties.

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The Ministry of Finance (MoF), has issued and published the here below Decision No. 893/1 dated 31/12/2020 which acknowledges the difference of exchange resulting from the purchase of goods or assets in foreign currencies at the black market rate. According to this MOF decision, this difference of exchange should be added to the cost of the goods in the Profit & Loss statement or to the cost of the asset in the Balance Sheet. It has to be recorded in the revenues of the seller as well.

Any pending difference of exchange on goods or assets in progress or stock not yet sold at the closing date of the financial statements should be recorded in a separate Balance Sheet account “Difference of Exchange-Assets or Liabilities” until this good is sold.

This is a first step made by the MOF to ease the business in Lebanon in this hyperinflation environment, hoping other decisions will be made to further clarify this major issue that the Lebanese companies are facing among other problems resulting from the current financial and economic crisis.

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By virtue of the Administrative Instruction No. 988/S2 dated 02/12/2020 issued by the director of the Revenue Branch of the Ministry of Finance, the public officers are required to reinforce the inspection of the identity of the beneficial owners in compliance with the laws and regulations in force, as a prelude to the follow-up report which will be submitted by Lebanon to the Global Forum on Transparency in June 2021.

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By virtue of the MoF Decision No. 691/1 dated 19/11/2020, the new forms No. S1/J and S4/J (here below) related to the declaration and payment of the tax on movable capital assets have replaced the forms using the same numbering which were subject of the MoF Decision No. 1432/1 dated 17/09/2018.

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