Lebanon taxes on a territorial basis: only Lebanon-source income is generally taxed. Lebanon has no Controlled Foreign Company regime. Lebanon operates a self-assessment system, with the Ministry of Finance conducting post-filing review.
The Lebanese tax year is the calendar year.
Lebanon's headline corporate income tax (CIT) rate is 17%.
The headline personal income tax (PIT) rate is 25% (business profits and employment).
The standard VAT/GST (or equivalent consumption tax) rate is 11%.
Individuals residing in Lebanon for 183 days or more, or maintaining an office or a permanent home constituting a habitual residence, are subject to Lebanese personal income tax. Lebanon adopts a territorial system: Lebanon-source income is taxed regardless of the taxpayer's residence, while foreign-source income is generally not taxed in Lebanon. Resident individuals are taxed at progressive rates (4%-25%) on local-source income, plus capital gains/securities income whether Lebanese or foreign-sourced (per Article 82 of the Income Tax Law, individuals must separately declare foreign movable-capital income - dividends, interest, and similar - transferred to or received abroad). Resident corporations are taxed at a standard 17% rate on profits generated through activity in Lebanon, consistent with the same territorial principle, subject to applicable DTTs.
A non-Lebanese entity has a Lebanon permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Lebanon on the entity's behalf, following the OECD Model Treaty definition as applied under Lebanese domestic law and any applicable tax treaty.
Lebanon has no CFC rules. Lebanon recognizes low-tax jurisdictions and permits companies incorporated there without discrimination, though Lebanese tax authorities always apply Lebanese tax law to foreign companies' Lebanon-source activity.
Lebanon has no clear or detailed thin capitalization rules.
Lebanon does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Lebanon does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; consistent with Lebanon's territorial (or primarily source-based) system described in Tax System above, foreign-source income generally falls outside the domestic tax base rather than being reported and then taxed.
Lebanon's territorial system already excludes most foreign-source income from the domestic tax base, functioning as a broader substitute for a conventional participation exemption.
Lebanon's territorial tax system limits the practical role of a foreign tax credit, since foreign-source income is generally outside the Lebanese tax base to begin with.
Lebanon maintains a network of approximately 34 double tax treaties, including Cyprus, Malta, France, and the UAE. Despite the treaty network, Lebanon's territorial tax principle has made practical implementation of DTT relief difficult, with implementation impediments frequently arising in practice.