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VAT
DRAFT LAW
May 2001
VAT Lebanon –law 2.0 DRAFT
2
VAT draft law
Contents
Section
1: Charge of the value added tax
Article
1: Charge of the value added tax
Section
2: Scope of the tax
Article
2: Taxable transactions
Article
3: Taxable persons
Article
4: Calculation of the turnover
Article
5: Persons and transactions outside the scope of the tax
Article
6: Supply of goods
Article
7: Goods considered as tangible property
Article
8: Self-supplies of goods
Article
9: Transfer of going concern
Article
10: Supply of services
Article
11: Self-supplies of services
Article
12: The intermediate
Article
13: Place of supply of goods
Article
14: Place of supply of services
Article 15: Import transactions
Section
3: Tax exemptions
Sub-section
1: Exemptions within the Lebanese territory
Article
16: Exempted activities
Article
17: Exempted goods
Sub-section
2: Exemption at import
Article
18: Exemption at import
Sub-section
3: Exemption of exports, like transactions, international transport and
some of the intermediates operations
Article
19: Exemption of exports and like transactions
Article
20: Exemption of international transport
Article
21: Exemption of some of the intermediates operations
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Section
4: Due date of tax
Article
22: Due date of tax
Section
5: Taxable base
Article
23: Taxable base within the country
Article
24: Taxable base at import
Section
6: Tax rate
Article
25: Tax rate
Section
7: Tax period
Article
26: Tax period
Section
8: Deductions
Article
27: The right to deduct
Article
28: Input deductible tax
Article
29: Rules governing the right to deduct
Article
30: The excess of input deductible tax
Article
31: The right to deduct partially
Article
32: Adjustments of deductions
Section
9: Persons liable to tax and their obligations
Article
33: Persons liable to tax
Article
34: Scope of the obligations
Article
35: Registration and periodical returns
Article
36: Accounting obligations
Article
37: Retention of records, invoices and other accounting documents
Article
38: Issuance of tax invoices
Article
39: Payment of tax
Article
40: Non-residents obligations
Article
41: Obligations at import
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Section
10: Travel agencies transactions
Article
42: Travel agencies transactions
Section
11: Control
Article
43: Rules governing the control
Article
44: Professional confidentiality
Article
45: Cases and rules governing the direct assessment of the tax
Section
12: Collection of tax
Article
46: Collection of tax within the Lebanese territory
Article
47: Collection of tax at import
Section
13: Offences and penalties
Article
48: Offences and penalties
Section
14: Restitution of tax
Article
49: Restitution of tax
Section
15: Objections and appeals
Article
50: Rules governing the objections and appeals within the Lebanese territory
Article
51: Rules governing the objections and appeals at import
Section
16: Prescription
Article
52: Prescription
Section
17: Miscellaneous provisions
Article
53: Stamp duties
Article
54: Perishable amounts
Article
55: Abrogation of indirect taxes
Article
56: VAT Administration
Article
57: Transitional provisions
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Section
18: Executive provisions
Article
58: Special cases of restitution of tax
Article
59: Other special cases
Article
60: Details of application of the law
Article
61: Effectiveness of the law
VAT Lebanon –law 2.0 DRAFT
Section
1:
Charge
of the value added tax
Article1:
Introduction of the value added tax
An
introductory tax called “the value-added tax” is charged, paid and collected in
accordance with the provisions of this law.
The
expression “Tax”, whenever mentioned in this law, means the value-added tax.
The
expression “Lebanese territory” or “
means the Lebanese territorial lands, atmospheres and
waters.
Section
2:
Scope
of the tax
Article2:
Taxable supplies
Are
subject to VAT:
1-
The supply of goods and services transactions carried out by a taxable person
within
the Lebanese territory;
The
transactions, provided for in articles 8&11 of this law, are considered as
the supply
of goods and services for consideration.
2-Import transactions undertaken by any person, whether taxable or
not.
Article3:
Taxable persons
A
taxable person is every natural or juridical person who, in the course of an
independent
economic activity, excluding the exempted activities
provided for in article 16 of this law,
supplies goods and services for consideration but under the
condition of achieving a total
turnover exceeding 500 million LBP and covering four
successive quarters.
The
persons, whose turnovers vary between 250 million LBP and 500 million LBP, can
opt to the tax. In order to preserve the competitiveness of
the market, the Minister of Finance
may lower the turnover specified above below 250 million
LBP.
Article
4: Calculation of the turnover
The
turnover, mentioned in article 3 of this law, consists of the following
amounts:
- The
value of taxable transactions, excluding VAT;
- The
value of transactions provided for in articles19, 20 and 21 of this law.
The
calculation of this turnover does not take into consideration the following
amounts:
- The
value of transfer of capital assets;
- The
value of transactions provided for in articles 16 and 17 of this law.
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Article
5: Persons and transactions outside the scope of the tax
The
transactions dealing with non-built lands are outside the scope of the tax
Are
also outside the scope of the tax the State, municipalities and all public bodies
regarding the transactions they perform as public authority,
even if these transactions are for
consideration, except the following transactions that are
taxable:
-
Renting out private properties
-
Communication
-
Water and electricity
-
Audiovisual media
-
Consumer markets, slaughterhouses, and warehouses
-
Tobacco
- Car
parking
-
Seaports and airports
-
Co-ops
Article
6: Supply of goods
The
supply of goods means the transfer by the taxable person of the right to
dispose, as
an owner, of a movable or immovable tangible property, such
as sale or exchange.
Article
7: Goods considered as tangible property
For
the implementation of this law, the following are considered as tangible
properties:
1-
Electric current, gas, heat, refrigeration.
2-
Rights in rem related to immovable property provided
for in real estate property law:
Usufruct,
Long leasing, Option arising from sale promise, Right
of disposal,
“Ijaratayn”.
Article
8: Self-supply of goods by a taxable person
The
following shall be considered as self-supplies of goods for consideration:
1.
The application by a taxable person of goods forming part of his business
assets
where the value added tax on such goods has been partly or
wholly deducted,
provided for in article 27 and what follows of this:
a)
For his private needs or those of his staff, and more generally for purposes
other
than those of his business, or
b) To
transfer without consideration
2.
The application by a taxable person, for his business purposes, of goods that
he has
constructed, manufactured, bought, altered or imported, in
the course of his business, provided
that acquiring such goods or its components parts from
another taxable person does not allow
him a whole deduction.
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3.
The application by a taxable person of goods to perform non-taxable activity
where the tax on such goods or its components parts became
deductible upon their
acquisition or application in accordance with subparagraph
(2);
4.
The retention of goods by a taxable person or his successors when he ceases his
taxable economic activity provided that the VAT on such
goods or its components
parts became partly or wholly deductible upon their
acquisition.
Article
9: Transfer of going concern
No
tax is charged on the transfer of the totality or part of a business assets,
whether for
consideration or not, provided that the transferor and the
transferee are taxable persons.
Article
10: Supply of services
The
supply of services means any transaction that does not constitute a supply of
goods
within the meaning of articles 6 and 8 of this law, and
generally such transactions may include:
a) the transfer of intangible property whether represented or
not by a bond;
b) the obligation to refrain from an act or to allow an act.
Article
11: Self-supply of services by a taxable person
The
following shall be considered as self-supplies of services for consideration:
1.
The use by a taxable person of goods forming part of his assets for his private
needs
or those of his staff, and more generally for purposes other
than those of his business,
where the tax on such goods has been initially partly or
wholly deducted.
2.
The supply of a service by a taxable person free of charge for his private
needs or
those of his staff, and more generally for purposes other
than those of his business.
3.
The supply of a service by a taxable person for the purposes of his business,
where
the tax on such service, had it been supplied by another
taxable person, would not be
wholly deductible.
Article
12: The intermediate
The
intermediate, who acts in his own name but on behalf of his mandatory, becomes
a
taxable person since there will be two transactions, one
between the intermediate and his
mandatory, and another between the intermediate and the
third party.
If
the intermediate acts in the name and on behalf of his mandatory, then there
will be
only one transaction between the mandatory and the third
party.
Article
13: Place of supply of goods
The
supply of goods takes place in
at the date of supply.
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Article
14: Place of supply of services
The
supply of services takes place in
Lebanese territory.
The
service is deemed to be taking place in
of the contracting parties has a fixed establishment in
provisions:
a)
The place of supply of a service related to an immovable property is the place
where
this property is located;
b)
The place of supply of a service related to a tangible movable property is the
place
where this service is carried out.
Article
15: Import transactions
Importation
takes place when the merchandises are placed in the local consumption
according to the customs legislation.
Section
3:
Exemptions
from the VAT
Sub-section
1:
Exemptions
within the Lebanese territory
Article
16: Exempted activities
Are
exempted from the tax the transactions carried out within the Lebanese
territory and
related to any of the following activities:
1.
Services offered by medical doctors or those having a medical character, and
hospital fees;
2.
Education;
3.
Insurance;
4.
Banking and financial services;
5.
Non-profit organizations regarding the activities performed for non-profit
purposes, except
when exempting such repeated activities is likely to create
distortion of competition with
taxable businesses;
6.
Collective transport of persons, including transport by taxicabs;
7.
Supply of gold to the Central Bank;
8.
Betting, lotteries and other forms of gambling;
9.
10.
Residential letting of built properties;
11.
Farmer’s activities concerning the supply of their agricultural production.
The
details of application of this article are to be regulated by a decree issued
upon the
proposal of the Minister of Finance.
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Article
17: Exempted goods
The
following goods are exempted:
a)
Livestock, poultries and agricultural products sold in their raw state;
b)
Bread, flour, meat and fish, milk and yogurt and their derivatives, rice, borghol,
sugar, salt and macaroni and all different kinds of pasta;
c)
Books, magazines, newspapers, medicines and drugs, and butane for household
consumption;
d)
Seeds, fertilizers and animal feeds.
The
details of application of this article are to be regulated by a decree issued
upon the
proposal of both the Minister of Finance and the authorized
Minister.
Sub-section
2:
Exemptions
at import
Article
18: Exemptions at import
Are
exempted from the tax:
1.
The importation of goods exempted from the tax according to article 17 of this
law,
2.
The transactions provided for in the customs legislation and related to the
exemptions
specific to the Presidency of the Republic, United Nations
Organization, the political
and consulate exemptions, military privileges, and the
donations granted to the public
administrations and institutions,
3.
The personal luggage, household equipment, and the specimens with no commercial
value according to the criteria adopted by the customs law.
The
details of application of this article are to be regulated by a decree issued
upon the
proposal of the Minister of Finance.
Sub-section
3:
Exemptions
of exports and like transactions,
international transport and some of the
intermediates operations
Article19:
Exemptions of exports and like transactions
The
following transactions are exempted:
1.
The supply of goods dispatched or transported to a destination outside the
Lebanese
territory.
2.
The supply of goods and services in the free zones according to the conditions
and
restrictions determined by the customs legislation.
3.
The exportation of gold to the Central Banks.
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The
details of application of this article are to be regulated by a decree issued
upon the
proposal of the Minister of Finance.
Article20:
Exemptions of international transport
Are
exempted from the tax:
1)
The supply, alteration, repairing, maintenance, leasing, or letting of:
a)
Seagoing vessels used for navigation in the high seas and which fulfill
remunerated transport activity, rescue and assistance
seagoing vessels, or
those used for sea hunting.
b)
Means of transportation by air used for air navigation and which basically
carry out an international remunerated transport activity.
2)
The supply of services for consideration related to seagoing vessels and means
of
transportation by air with its cargoes.
3)
The international transport for persons and merchandises.
The
details of application of this article are to be regulated by a decree issued
upon the
proposal of the Minister of Finance.
Article
21: Exemptions of some of the intermediates operations
Services
supplied by intermediaries, acting in the name and on behalf of another person,
are exempted when these services are related to exempted
transactions according to articles 19
and 20 of this law or transactions taking place outside the
Lebanese territory, except for services
supplied by travel agencies.
The
details of application of this article are to be regulated by a decree issued
upon the
proposal of the Minister of Finance.
Section
4:
Due
date of tax
Article
22: Due date of tax
The
tax is due at the date of supply of goods and services.
If,
before the date of supply of goods and services, the price has been partly or
wholly
paid, then the tax is due at the date of payment based on
the value of the amount paid.
If,
before the date of supply of goods and services and before paying the price,
the
taxable person issues an invoice, then the tax is due at the
date of issuing the invoice.
As
for the imported merchandises, the tax is due when the customs duties become
due
according to the legislations in force.
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Section
5:
Taxable
base
Article
23: Taxable base within the country
1-
The taxable base is deemed to be the consideration that the supplier of goods
and
services has or will collect for supplying these goods and
services.
2-
Concerning the transactions mentioned in article 8 of this law, that is related
to the
self-supply of goods, the purchase price of these goods and
like goods is deemed to be the
taxable base, and when this price is impossible to be known
then the cost price, at the date of
carrying out such transactions, is deemed to be the taxable
base.
3-
Concerning the transactions mentioned in article 11 of this law, that is
related to the
self-supply of services, the total costs undertaken by a
taxable person in order to supply these
services, is deemed to be the taxable base.
4- In
case it is impossible to determine the consideration, the tax is charged on the
open
market value of the goods and services supplied. The open
market value of the supply of goods
and services is the price for a like transaction taking
place on the Lebanese territory between a
vendor and a purchaser at arm’s length, at the time of such
a supply under conditions of fair
competition.
5-
The taxes and duties, with all appendix expenses such as intermediary,
packaging,
transport, or insurance expenses, etc… are included in the
taxable base, excluding the valueadded
tax.
Article
24: Taxable base at import
At
import, the taxable amount is the same value applied to levy the Customs duties
in
addition to all taxes initially due, excluding the
value-added tax.
Section
6:
Tax
rate
Article
25: Tax rate
The
tax rate is 10%.
Section
7:
Tax
period
Article
26: Tax period
The
tax is calculated at the end of each month of the calendar year.
The
Minister of Finance may provide that the tax period is a quarter in the early
stage of
implementation of this tax.
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Section
8:
Deductions
Article
27: The right to deduct
The
right to deduct is the right given to a taxable person to deduct from the tax
due on a
certain transaction the value of the tax paid in respect of
the cost of this transaction or any of the
components forming part of the cost.
The
taxable person is entitled to deduct from the tax he is liable to pay for a
specific
period, the whole deductible tax for that same period.
The
right of deduction arises when the deductible tax is due.
Article
28: The deductible tax
The
deductible tax is the tax that is charged in respect of goods and services
purchased by
a taxable person from another taxable person, and goods
imported by a taxable person, in order
to perform through his economic activity, one of the
following transactions:
1.
The supply of taxable goods and services.
2.
The transactions related to exportation and like transactions, and international
transport pursuant to articles 19, 20 and 21 of this law.
The
tax charged on electricity, water, telecommunications consumed by a taxable
person,
is not eligible for deduction.
The
tax charged on the fixed assets acquired by a taxable person at an earlier date
of being
taxable shall also be eligible for deduction where these
assets are used for taxable transactions.
The
fixed assets shall mean tangible property, such as machines and tools,
dedicated for a
permanent use in the business as investment means.
The
rules and procedures of implementation of this article are to be regulated by a
decree
upon the proposal of the Minister of Finance.
Article
29: Rules governing the right to deduct
A
taxable person has the right to deduct provided that he hold a tax invoice
drawn up in
accordance with article 38 of this law, or a substitute
document, or an import document
established by the competent authorities.
Article
30: The excess of deductible tax
If,
at the end of a tax period, the amount of the deductible tax exceeds the amount
of the
tax due, then the excess shall be carried forward to the
following period.
The
taxable person has the right to claim, at the end of any calendar year, a
refund for the
excess of the input deductible tax covering this year.
The
exporters have the right to claim, at the end of any tax period, a refund of
the excess
deductible tax covering this period.
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As
for the taxable person who ceased to be taxable, he has the right to claim a
refund of
the excess of the input deductible tax after the
administration has approved his deregistration.
The
administration shall resolve the refund claim within three months starting from
the
date of receipt of the request.
In
case the administration approved, partly or wholly, the refund claim, it shall
pay the
due amount to the taxable person, otherwise an interest of
9% is due on the unpaid amount
starting the end of the 4th month
from the date the claim was submitted.
Article
31: The right to deduct partially
If
the taxable person, by way of supplying goods and services, performs
transactions in
respect of which tax is deductible, and others in respect of
which tax is not deductible, he is
entitled to deduct such part of the tax attributable to the
former transactions.
Article
32: Adjustments of deductions
The
initial deductions shall be adjusted where that deduction was higher or lower
than
that to which the taxable person was entitled to initially
deduct due to:
1.
Material mistakes;
2.
Change occurs in the factors used to determine the amount to be deducted at a
later
date of the tax period.
The
person who opt to be a taxable person and deregisters within 2 years from his
registration date, shall return to the treasury the
difference, if it exists, between the refunded tax
and the tax collected for the treasury, for the period
during which he was a taxable person.
Section
9:
Persons
liable for payment of tax and their obligations
Article
33: Persons liable for payment of tax
1.
Within the Lebanese territory:
According
to the provisions of this law, the taxable person and his legal successors are
liable to the tax provided that the supply of goods and
services, performed by him, are also
taxable.
If
the taxable person is non-resident in
the tax, pursuant to article 40 of this law. In case the
taxable person does not appoint a fiscal
representative, then the contracting party is liable for the
tax.
2.
At import
The
importer or the person treated as such is liable to the tax.
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Article
34: Scope of the obligations
The
obligations, provided for in this section, are applied to:
a)
The taxable person specified in article 3 of this law.
b)
Persons who perform exempted transactions that allow the right of deduction, as
mentioned in article 28(1) item 2 of this law.
Registration
and periodical returns : 35 Article
Every
taxable person shall submit:
1.
A registration request to the administration of the value-added tax: within
2
months starting from the last day of the quarter where the
conditions for being
taxable are available.
2.
A deregistration request: within 2 months from the end of the calendar year
where
the conditions for being taxable are not available.
3.
Periodical tax return: within 20 days from the end of the tax period as
determined
in article 26 of this law including, if necessary, the
amount of the deductible tax.
The
requests and returns shall be submitted to the competent tax authority on paper
or/and electronic forms prescribed for this purpose.
Article
36: Accounting obligations
The
method of keeping and organizing the necessary accounting documents, adopted by
the taxable person, is to be regulated by a decision of the
Minister of Finance enabling the
application and control of the tax.
Article
37: Retention of records, invoices, and other accounting documents
The
taxable person shall retain the records, invoices and other accounting
documents for a
period of 4 years from the end of the calendar year through
which the tax has arisen.
Article
38: Issuance of the tax invoice
Every
taxable person shall issue an invoice, or other document serving as an invoice
in
respect of all goods and services supplied by him to another
person.
The
invoice shall at least state clearly the following:
1.
The name, address, and registration number of the supplier of goods or services
at
the Ministry of Finance.
2.
The name and address of the person for the interest of whom
the invoice has been
issued.
3.
The description of the supply of goods and services.
4.
The serial number and date of the invoice.
5.
The due amount for the supply of goods and services.
6.
The tax chargeable with the applied tax rate.
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Article
39: Payment of tax
The
tax shall be paid, all at once, within the deadline of the periodical tax
return i.e. within
20
days from the end of each tax period, covering the taxable transactions
fulfilled through the
mentioned period, after deducting the value of the
deductible tax.
In
case of charging additional or supplementary amounts, the tax shall be paid
according
to reassessments notes within one month from the date of
notification of these assessments notes
to the taxable persons.
The
tax shall be paid to any of the accepted private banks or its operative
branches in
Article
40: Non-residents
When
the taxable person does not have a real or elected establishment in
shall appoint a fiscal representative who resides in
in
determined by the Minister of Finance.
This
fiscal representative shall be held jointly and severally liable for payment of
the tax
and penalties resultant from the taxable transactions, and
he shall be responsible, instead of his
mandatory, of all the required obligations provided for in
this law.
Article
41: Obligations at import
The
same rules and forms provided for in the customs legislation shall be applied
to the
tax declaration at import.
The
tax is paid at the time when the merchandises are placed in the domestic
consumption
according to the rules provided for in the customs
legislation.
The
collection of the tax will be banned temporarily in all customs situations
where the
duties are temporarily suspended according to the rules
provided for in the customs legislation.
Section
10:
Travel
agencies transactions
Article
42: Travel agencies transactions
The
travel agencies shall mean every natural or juridical person, who directly or
as an
intermediary, organizes and supplies travels or residences
in order to seek profits, sells travel
tickets, hotel accommodation, and meals, and organizes trips
and visits to vestigial places, and
generally, every person who sells to passengers services
related to transactions mentioned above
or branching from it.
The
taxable base and its rules of application for the travel agencies transactions
are to be
regulated by decrees adopted by the Council of Ministers,
upon the proposal of the Minister of
Finance.
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Section
11:
Control
Article
43: Rules of control
1-
The right of inspection:
Every
person, whether taxable or not, shall enable the competent tax officers, to
inspect
at the premises of the taxable person or those in relation
with him, records, invoices and other
documents allowing them to ensure the correct collection of
the tax due by him or by other
persons dealing with him.
Without
prejudice to bank secrecy law dated
person, including the public administrations, to use the
professional confidentiality in order to
prevent the tax officers from reviewing the records,
invoices and other documents which allow
them to ensure the correct collection of the tax due by the
taxable persons.
In
case the records and documents are electronically kept or preserved, the tax
officers
have the right to inspect the registered information on the
electronic documents and obtain them
as numerical or paper documents that can be read and
understood.
2- Information
granting:
Without
prejudice to bank secrecy law dated
or juridical, shall enable the competent tax officers, upon
their written request, to inspect his
records and documents with all the information they need to
ensure the correct collection of the
tax due by him or by the others.
Article
44: Professional confidentiality
Every
person, whose function, competence or authority, enables him to interfere in
assessing or collecting the tax, or in studying the
objections related to it, shall comply with the
professional confidentiality otherwise he will be prosecuted
at offence according to article 579 of
the Criminal Law.
The
professional confidentiality shall not be opposed in lawsuits that affect the
administration interests, or when the control or collection
departments perform their
administrative functions.
Article
45: Cases and rules governing the direct assessment of the tax
In
addition to the penalties provided for in article 48 of this law, the tax
authority can
undertake the direct assessment of the tax in the following
cases:
1. If
the taxable person does not submit the periodical tax return within the
determined deadlines.
2. If
the taxable person does not comply with his obligations provided for in the law
and regulations with regards to the duty to keep, handover
and retain the records
and accounting documents, and which hinders the tax
authority from performing
its functions related to inspection on these records.
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3. If
the taxable person does not issue an invoice, when it is mandatory, drawn up in
accordance with article 38 of this law, or in case he issues
an invoice containing
incorrect information.
The
direct assessment of the tax due is performed on the basis of the assessed
amounts regarding the transactions that occurred within a
certain tax period.
Section12:
Collection
of the tax
Article
46: Collection of the tax within the Lebanese territory
1.
Rules of collection:
The
rules of collection of direct taxes and similar taxes, provided for in the
decree-law
no. 147 dated
law, are applied to the collection of the VAT.
2.
Late payment penalty:
In
case the tax is not paid within the deadline of the periodical tax return, a
penalty of 3%
per month of the tax due shall be charged starting the end
of the tax payment deadline. The
penalty shall be computed on the total of all taxes due and
penalties. The fraction of a month is
considered as a whole month.
When
the payment of the tax appears to be insufficient, as a result of the audit or
the
direct assessment procedure, then a penalty of 3% a month of
the unpaid amount and the
appendix penalties shall be legally chargeable from the end
of the tax payment deadline.
3.
Privilege right of the Treasury funds:
The
Treasury, with regards to the taxes, penalties and other amounts due to the
State
under this law, has a public privilege of first degree on
all properties owned by the persons liable
to tax, and a legal forced mortgage on all their immovable
properties.
4- Non-residents:
Notwithstanding
the provisions of article 40 of this law, if the non-resident taxable person
does not appoint a fiscal representative, the tax and the
penalties due are collected from the other
contracting party.
Article
47: Collection of the tax at import
The
rules and procedures specified in the customs legislation are applied to the
collection
of the tax at import.
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Section13:
Offences
and penalties
Article
48: Offences and penalties
1.
Late or non-submission of the registration or deregistration request:
The
dissenter to article 35 (1), (2) of this law will be subject to a penalty
amounting 2
million LBP.
2.
Late periodical tax return:
The
late submission of the periodical tax return provided for in article 35 (3) of
this law
will be subject to a penalty of 10% of the tax due per month
late. The fraction of a month is
considered as a whole month. The penalty, somehow, shall not
exceed the double of the tax due
and shall not be less than 500 thousands LBP a month, in
addition to the late payment penalty
provided for in paragraph 2 of article 44 of this law.
3.
The incorrect tax return:
The
taxable person, who submits an incorrect tax return that does not reflect his
real
economic activity, will be subject to a penalty amounting
the double of the non-declared tax.
4.
The unjustified claim of refund:
Every
person, who, with the intention of fraud, claims a tax refund, will be liable
to a
penalty amounting the double of the tax claimed, in addition
to the implementation of the
Criminal Law provisions.
5.
Offences regarding invoices and documents:
Every
amount written down as a tax in an invoice or a similar document shall be due
and in case the person does not pay this amount within the
legal deadlines, the late payment
penalty is applied starting from the due date of the tax.
A
penalty that is equivalent to double of the tax due shall be charged to every
person who
refrains from issuing an invoice or similar document due to
article 38 of this law, when it is
mandatory, or in case he issues an invoice containing
incorrect information related to the name
or address of the concerned parties in the transaction,
description and quantity of the goods and
services supplied, or the price with its appendices.
A
penalty that is equivalent to double the tax due shall be charged to every
person who
shows an import document containing incorrect information
regarding the description, quantity,
or price of the merchandises or regarding the name of the
taxable person.
A
penalty that is equivalent to double the tax due shall be charged to every
person
who shows an export document containing incorrect
information regarding the quantity of the
merchandises that exceed the real quantity with its
appendices, the price that exceeds the real
price or regarding an incorrect description of the
merchandises.
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6.
Keeping, retaining, and producing the records and documents:
The
taxable person shall pay a penalty that varies between 5 and 10 millions LBP
when
he does not comply with the provisions of this law regarding
the keeping, handing over,
retaining, or producing the records, invoices or any other
accounting document.
7.
Intervention of a third party:
Every
person who intervenes in any of the offences provided for in the previous
paragraphs of this article, shall pay a penalty that is
equivalent to the mentioned tax and not less
than 5 million LBP.
8.
At import and export:
Concerning
the import and export transactions, the offences will be investigated,
apprehended, collected, and settled according to the
provisions of the customs legislation.
Section
14:
Restitution
of tax
Article
49: Restitution of tax
The
taxable person has the right to restitute, part or whole, of the tax paid in
case the
taxable transaction has been canceled or annulled, or in
case the price has been, partly or wholly,
unpaid or reduced at a later date of the transaction.
The
rules and procedures related to restitution of the tax that exceeds the amount
of the
tax due, are to be regulated by a decree upon the proposal
of the Minister of Finance.
Section
15:
Objections
and appeals
Article
50: Objections and appeals within the Lebanese territory
1.
Objections:
The
taxable person has the right to object on the amounts charged to him, or the
amounts
claimed according to article 49 of this law, by submitting a
written request to the tax authority
within one month from the date of notification of the
administration’s decision or from the date
of payment of the tax.
The
objection must be justified at the risk of dismissing it.
The
tax authority shall resolve the objection within six months from the date of
receipt of
the request. In case the mentioned deadline passed without
issuing any decision, the silence of
the tax authority shall be considered as an implicit
decision of accepting the objection.
The
tax authority shall notify the objector the result of studying the objection
within 15
days following the date of the decision.
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2.
The Appeal commission:
The
administration decisions that are partly or wholly dismissing the objection can
be
appealed before the appeal commission within one month from
the date of notification of the
administration decision.
One
or more first instance Commission, responsible of studying and settling the
appeals,
is to be formed by a decree. This commission is composed of:
- A
judicial or administrative judge of the fourth degree and above appointed upon
the
proposal of the Minister of Justice after the approval of
the Council of High Judiciary or the
Council
of State President
- An
employee from the Ministry of Finance belonging to the third
category and appointed by the Minister of Finance.
Reporter Member
- A
Representative of the Chamber of Commerce and Industry appointed Member
upon the proposal of the president of this Chamber
The
Commission takes its decisions by majority.
The
Commission shall resolve the appeals within six months following the date of
receipt of the appeal, and the reporter shall notify the
Commission decisions to the tax authority
and to the taxable person within 15 days from its date of
issuance.
2.
The Appeal before the State Council:
The
tax authority and the taxable person have the right to appeal directly, the
decisions of the appeal commission before the State Council
within 30 days starting from the
date of notification of the Commission decision.
The
abridged procedures are to be followed before the State Council.
The
appeal request by the taxable person is subject to a guarantee deposit
equivalent
to 8% of the appealed tax due. Every appeal that is not
attached to a receipt, proving payment of
the guarantee, will be formally dismissed.
The
taxable person recovers the guarantee if the State Council issues a decision
wholly for his interest. In case the mentioned decision has
been wholly for the treasury’s interest,
the guarantee will be for the treasury. If the decision has
been partly for the interest of the
taxable person, then the guarantee recoverable is equivalent
to the proportion of the tax that has
been discharged to him.
Article
51: Rules of objections and appeals at import
The
rules followed in the customs legislation are applied to the objections and
appeals of
the tax at import.
Section
16:
Prescription
Article
52: Prescription
The
amounts due to the treasury are prescribed within 4 years following the end of
the calendar year through which these amounts have been due.
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The
right of deduction is prescribed within 4 years following the end of the
calendar
year that follows the year through which the tax has been
paid.
The
right to claim, partly or wholly, the refund of the tax is prescribed within 4
years
following the end of the calendar year through which the tax
has been paid.
Section
17:
Miscellaneous
provisions
Article
53: Stamp duties
The
declarations, objections and statements and other documents related to this tax
are
exempted from the stamp duties.
Article
54: Perishable amounts
The
amounts due by the taxable persons, including the penalties, which do not
exceed
5’000
LBP are considered perishable, and the tax authority is discharged from
collecting those
amounts.
Article
55: Abrogation of indirect taxes
The
juridical or natural persons, who are mandatory or voluntarily taxable, are not
liable
to the 5% tax imposed on the hotels and restaurants
services, and the entertainment tax.
The
playing cards duty is abrogated starting from the date of effectiveness of this
law.
The
municipal duties charged according to articles 96, 97, and 98 of law no. 60
dated
abrogated at the date of effectiveness of this law.
Article
56: Administration of the VAT
The
administration, control and collection of this tax will be the responsibility
of a
division in the Ministry of Finance- Public Finance
Directorate- Revenue Department. The cadre,
functions, and employment conditions will be determined by a
decree adopted by the Council of
Ministers
upon the proposal of the Minister of Finance, after the approval of the Civil
Service
Board and an inspection undertaken by the “administration of
examination and direction”.
A
decree, adopted by the Council of Ministers upon the proposal of the Minister
of
Finance,
can determine the rules and conditions of contracting with one or more company
from
the private sector the management of the tourist tax refund
provided for in paragraph (a) of
article 58 of this law.
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Article
57: Transitional provisions
Notwithstanding
article 35 (1) of this law, every person, who can be liable to the tax
according to the provisions of this law, and whose turnover,
for the year 2000, exceeds 500
million LBP, shall submit a registration request within a
period starting from
In
this case, the supply of goods and services that take place after the date of
enforcement
of this law, and the import of merchandises placed in local
consumption after that date, are
taxable.
The
Minister of Finance may, by decision, adopt the necessary transitional measures
to the
application of this law to the contracts that are still
under execution at the date of enforcement of
this law.
Section
18:
Executive
provisions
Article
58: Special cases of restitution of tax
Decrees
adopted by the Council of Ministers, upon the proposal of the Minister of
Finance
shall determine the rules and conditions governing the following restitution
cases, and
its starting date of application:
a)
The tax charged on the purchases of any non-resident when transporting them
in his personal luggage outside
b)
The tax charged in
businesses that are not performing taxable businesses within
the Lebanese
territory.
c) A
part or the whole tax charged on some goods that have been acquired to
perform exempted activities according to article 16 of this
law, and this for
social considerations.
d) A
part or the whole tax paid by diplomatic bodies, consulate, international
organizations and their employees according to the
international treaties.
Article
59: Other special cases
Decisions
issued by the Minister of Finance shall determine the rules and conditions
governing the following special cases, and its starting date
of application:
a) A
special scheme concerning the accounting, invoicing and chargeability of tax,
for
the taxable persons who perform cash businesses.
b)
Special rules for calculating the turnover concerning related persons who run
at the
same time different businesses and establishments.
The
taxable base related to the supply of used goods is to be regulated by a decree
upon
the proposal of the Minister of Finance.
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Article
60: Details of application of the law
The
details of application of the provisions of this law are regulated by decisions
issued
by the Minister of Finance, when no specific provision has
been made in this regard.
Article
61: Effectiveness of the law
This
law will be effective from
from