Lebanon – Updates on oil & gas taxation, lump-sum levy, built property tax and penalties

Lebanon – Updates on oil & gas taxation

KPMG in Lebanon reports that new decrees on the application of the Petroleum Law no. 132 are expected to be issued. KPMG in Lebanon understands that the Ministry of Finance is expected to recommend a different tax treatment from the current tax law for companies in the oil and gas sector in Lebanon, for both income tax and value added tax purposes.

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Lump-sum levy postponed until 2016

The Ministry of Finance issued a decision1 that extends until 2016 the application of Lebanon’s annual lump-sum duty on taxpayers subject to income tax (holding companies and offshore companies are exempt). Depending on the type of taxpayer, the duty amount can vary from 50,000 to 2 million Lebanese pounds (LBP).

Built property tax declarations

As of 2 January 2015, taxpayers that are subject to built property tax and that have revenues exceeding LBP 20 million in respect of one section must submit a personal tax declaration electronically in respect of 2014 revenues2. Taxpayers must also have submitted requests of eligibility and registration on the website of the Ministry of Finance by 28 February 2015, or they face late filing penalties, which may be reduced as follows.

Reduced penalties

For late filing and late tax payment penalties incurred up to 2 March 2015, the deadline to settle penalties has been extended until 30 June 2015 inclusive3,  as follows:

Penalties

for late filing 
Reduction

%
Period
Proportional  85% For violations incurred before 15 November 2014
Lump-sum 60%
Proportional 75% For violations incurred from 16 November 2014 to 2 March 2015
Lump-sum 60%

 

Penalties

for late payment 
Reduction

%
Period
Proportional

75% For violations incurred before 15 November 2014
Proportional

65% For violations incurred from 16 November 2014 to 2 March 2015

 Source: KPMG in Lebanon, 2015

Footnotes

Decision no. 142/1 dated 22 February 2015 relating to the application of article 29 of Law 173 dated 2000. 

Decision no. 17/1 dated 12 January 2015. 

3 Decision no. 687/1 dated 24 July 2015.

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