Capital Gains Taxation in Lebanon
Definition of Capital Gains
In Lebanon, capital gains are defined as profits derived from the disposal of capital assets, including:
- Real estate properties
- Stocks and shares
- Bonds and debentures
- Business assets
There is no distinction between short-term and long-term capital gains for tax purposes.
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains in Lebanon are taxed at a flat rate of 10%. This rate applies to all categories of capital gains, regardless of the holding period or the nature of the asset disposed of.
Legal Framework
The taxation of capital gains in Lebanon is governed by the Income Tax Law (Law No. 144/2001), specifically Article 33. This article outlines the definition of capital gains, the methodology for calculating taxable gains, and the applicable tax rates.
Legal Reasoning and Policy Objectives
The Lebanese capital gains tax system aims to generate revenue for the government while ensuring that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals. By applying a flat tax rate to capital gains, Lebanon seeks to maintain a neutral tax treatment across different sources of income and promote investment.
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