The Minister of Finance in the caretaker government, Ghazi Wazni, signed a decision related to the application details concerning exemptions from income tax, transfer fees, and property taxes as stated in item "Fourth" of Law No. 185 dated 19/8/2020 (Extension of deadlines and granting some tax and fee exemptions) and Article 6 of Law No. 194/2020 (Protection of areas affected by the explosion in the Port of Beirut and support for its reconstruction).
The decision includes the following:
- **Article 1**: This decision specifies the application details of exemptions related to income tax, transfer fees, and property tax as stated in item "Fourth" of Law No. 185 dated 19/8/2020 and in Article 6 of Law No. 194/2020.
1. Concerning income tax: (Items one and eleven of Article 6 of Law No. 194/2020)
- **Article 2**: Amounts paid and in-kind donations donated for the purpose of assisting taxpayers or citizens affected by the Beirut Port explosion on 4/8/2020 are considered deductible expenses from the income of institutions subject to taxation based on actual profit from 5/8/2020 until 31/12/2021, whether the donation was made directly to affected taxpayers or indirectly through donations to organizations or associations that pay these amounts to the affected individuals, or that use them to finance the rehabilitation and reconstruction of their properties and institutions.
- **Article 3**: To benefit from the provisions of Article 2 of this decision, the following conditions must be met:
1. A written notice from the donating taxpayer must be submitted to the relevant financial department by 31/01/2021, stating the value of cash donations from profits of 2020 or the value of in-kind donations, and by 31/01/2022, for the donations from profits of 2021.
2. These donations must be recorded in proper accounting records.
3. The name of the beneficiary or the entity receiving the donation must be listed in the records issued by the committee specified in Article 2 of Law No. 194 dated 16/10/2020.
4. The donating taxpayer must retain documentation related to the amounts and in-kind donations, including:
- The identity of the recipient and signature on the proof of receipt of funds or in-kind donations, if donated directly.
- A signed receipt from the organizations or associations if donated through them.
5. The amounts donated must not exceed the profits of the year in which the donation was made, excluding carried-over results whether profits or losses.
6. The financial cycle during which the donation was made must not result in losses.
- **Article 4**: If the affected recipient is subject to income tax based on actual profit, the amounts or value of the in-kind donations are considered exceptional revenues. If subject to tax based on fixed profits, the amounts or value of in-kind donations are considered revenue to be declared as part of operational income.
- **Article 5**: Beneficiaries of the provisions of item eleven of Article 6 of Law No. 194/2020:
- Taxpayers based on actual profit.
- Taxpayers optionally based on fixed profit, public works contractors, and land transport companies subject to fixed profit taxation.
1. **Taxpayers based on actual profit**:
- The book value of tangible fixed assets listed in the taxpayers' balance sheets as of 31/12/2019, which have been completely damaged as a result of the explosion and cannot be reused, will be deductible from profits subject to tax.
- However, partially damaged assets that have been repaired and returned to use will have the repair costs treated as capital expenses, added to the asset cost, and depreciated according to applicable rates.
- Exceptionally, losses from tangible fixed assets can be carried forward for an additional five years, totaling eight years after 2020, provided the loss of 2020 is covered by profits of the second year.
2. **Taxpayers optionally based on fixed profit**:
- The book value of damaged tangible fixed assets and affected inventory will be deducted from their income for the year 2020, with any excess losses deducted from 2021 income.
- **Article 6**: Taxpayers whose accounting records were lost or destroyed due to the Beirut Port explosion on 4/8/2020 must reconstruct their accounting information for the years 2012 to the date of publication of Law No. 194/2020.
- **Article 7**: Estates of Lebanese who died on 4/8/2020 or later due to the explosion are exempt from transfer fees as stipulated in Decree No. 146 dated 12/6/1959.
- **Article 8**: Life insurance amounts benefiting heirs of a Lebanese deceased due to the Beirut Port explosion on or after 4/8/2020 are exempt from transfer fees, provided the declaration is made within the specified timeframe.
- **Article 9**: All assistance, gifts, and donations, proven to be provided to affected individuals after 4/8/2020 up to 28/8/2021, are exempt from transfer fees.
- **Article 10**: Transfer fees legitimately paid are non-refundable.
- **Article 11**: The heirs are required to submit declarations and evidence as outlined in the Minister's decision No. 609/1, including a commitment that the death was due to the explosion.
- **Article 12**: The relevant fiscal units will verify the identities of beneficiaries of the transfer fee exemptions.
- **Article 13**: Exemptions from property tax are applicable to residential and non-residential units that were demolished or damaged due to the Beirut Port explosion from 1/1/2020 to 31/12/2021.
- **Article 14**: Owners and investors of these buildings are beneficiaries of this exemption.
- **Article 15**: Relevant units will count properties that benefit from the exemption.
- **Article 16**: The exemption remains until the completion of repair works if they extend beyond 31/12/2021.
- **Article 17**: Owners and investors are exempt from submitting requests to stop property tax but must notify the relevant financial department when repair works are completed.
- **Article 18**: Direct estimates for these properties previously approved remain valid upon reconstruction, provided the internal divisions remain unchanged.
