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.

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.

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 Lebanon if the good exists on the Lebanese territory at the date of supply.

 

Article 14: Place of supply of services

The supply of services takes place in Lebanon if the service is supplied within the

Lebanese territory.

The service is deemed to be taking place in Lebanon, unless the opposite is proven, if one

of the contracting parties has a fixed establishment in Lebanon, notwithstanding the following

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.