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. Sale of built properties;

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.

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.

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.