Living in Lebanon: salary tax, withholding tax on non-residents, and property purchase by a foreigner

This page reports on information published by the Lebanese Ministry of Finance and the Public Investment Promotion Agency (IDAL). Salary tax follows a scale ranging from 2 to 20 13T in Lebanese pounds. Payments made to individuals without a place of business in Lebanon are subject to a withholding tax of 15 13T calculated on presumed profit. A foreigner must generally obtain a decree to acquire real estate rights. The tax residency criteria for individuals are not detailed here.

Salaries: who is taxed and according to what scale?

The Ministry of Finance's page on income tax refers to Article 58 of the Income Tax Act. It distinguishes between two cases:

• For public funds, salaries, allowances, pensions and life annuities are taxable, whether the beneficiary resides in Lebanon or abroad; ;
• For private funds, sums paid to a person residing in Lebanon, and to a person residing abroad for services rendered in Lebanon, are taxable.

The annual installments, in Lebanese pounds (LL), are as follows.

Occasional wages paid per piece or quantity are taxed at 3 % without deduction. The page does not have a publication date. The IDAL guide dated 2016 uses the same brackets and rates.

Who is a resident: what the official pages specify

The ministry's website does not provide a general definition of residency. It only specifies, for staff of foreign embassies, that Lebanese employees and foreign employees who resided in Lebanon before being hired are considered residents. The 2016 IDAL guide also does not define residency for individuals.

This point is not detailed here: it falls under Lebanese income tax law, to be verified with the Ministry of Finance.

Between France and Lebanon, the convention of July 24, 1962, establishes an order of criteria when a person is a resident of both states: the center of vital interests, that is, the location of the closest personal and professional ties, followed by the longest period of residence, according to the BOFiP commentary. Details can be found on our page dedicated to the convention.

Non-residents: withholding tax on sums paid in Lebanon

The Ministry's "Tax on Non-Residents" page refers to sums received in Lebanon by individuals, companies, or institutions that do not have a place of business in Lebanon. It does not define non-resident status beyond this criterion. Two cases are distinguished:

• remuneration for a service: presumed profit of 50 % of gross receipts, then tax of 15 %; ;
• other sums paid, for example for the supply of materials or goods: presumed profit of 15 %, then tax of 15 %.

The taxpayer withholds the tax and pays it to the Treasury with their tax return. The 2016 IDAL guide summarizes the first case with a similar formula: 15 % applied to 50 % of the profit.

Dividends

IDAL states in its FAQ that the tax on dividend distributions is 10%. Its 2016 guide mentions the same rate, reduced to 5% under certain conditions that it does not specify. Neither page is precisely dated: confirm the applicable rate with the Ministry of Finance before making any decisions.

The Franco-Lebanese tax treaty stipulates that dividends and interest are taxable only in the beneficiary's country of residence, according to the French tax authorities (BOFiP). Exemption from withholding tax in Lebanon is subject to supporting documentation, which can be found on the treaty's website.

Buying property in Lebanon as a foreigner

According to IDAL's FAQ, a foreigner cannot acquire real estate rights in Lebanon without prior authorization. This authorization takes the form of a decree from the Council of Ministers, issued at the request of the Minister of Finance. The following points are outlined:

• The possession of up to 3,000 m² across the entire territory is exempt from the decree; ;
• A foreigner cannot own more than 3 % of the total area of Lebanon, nor more than 3 % of that of a province; ;
• In Beirut, the ceiling is 10 % of the area; ;
• A lease of more than ten years requires the decree; ;
• The decree becomes invalid if it is not used within one year, and the construction must be completed within five years of registration in the land register.

The page is undated. The 2016 IDAL guide also indicates that Lebanese property tax ranges from 0 to 14 % depending on the value of the property, with thresholds expressed in Lebanese pounds.

What this page does not cover

It does not detail the tax residency of individuals, Lebanese social security, domestic wealth and inheritance taxation, local savings and assurance-vie, or residency permits. These matters fall under Lebanese law and should be verified with the Ministry of Finance, the National Social Security Fund, and, for residency, the relevant administrative body. Balmont Conseil is neither a law firm nor a local tax advisor: local tax matters should be verified with a professional based in Lebanon. French matters, particularly the departure declaration and the accounts to be declared, are addressed in our pages on tax residency and exit tax.

What changes depending on your situation

• The location where you carry out your activity and the nature of your income: salary, remuneration for services, dividends, rents.
• The source of your remuneration: public funds or private funds.
• The property in question: surface area, location, duration of any lease.
• Your residency situation in France and Lebanon, year by year.

The rule depends on your situation. No results are guaranteed.