Lebanon's 2026 Budget Law introduced changes that warrant a fresh review of established tax processes.
For finance and tax teams, VAT deserves particular attention. The changes affect areas including VAT deduction and refunds, while the deadline for submitting periodic VAT returns has been extended to one month instead of 20 days.
Businesses should assess how the current rules affect their own compliance processes rather than relying on procedures established under earlier requirements.
Review VAT deduction and refund positions
The 2026 Budget includes amendments affecting the deduction and recovery of VAT.
Where deductible VAT exceeds VAT due for a period, the excess may be carried forward. Under the amended provisions, taxpayers may request a refund once the excess reaches at least LBP 200 million, subject to the applicable requirements.
The Budget also includes provisions relevant to exporters and certain taxpayers conducting exempt activities.
Businesses with material VAT credit balances should therefore review whether their existing recovery approach remains appropriate and whether refund opportunities are being identified in a timely manner.
Revisit established tax processes
VAT should form part of a broader tax health check.
Businesses should review filing responsibilities, supporting documentation, corporate income tax processes, withholding tax treatment and payroll-related tax compliance where relevant.
The objective is to identify procedures that may need to change following legislative developments and areas where historical practices may create unnecessary exposure.
Regional operations create additional requirements
Lebanese businesses operating, investing or trading elsewhere in the Middle East may face a very different set of tax priorities outside Lebanon.
The UAE and Oman are progressing with eInvoicing implementation. Qatar has launched Pillar Two registration for in-scope multinational groups, while Bahrain and Kuwait are advancing their DMTT regimes. Saudi Arabia's current Tax Amnesty Initiative also creates a time-sensitive consideration for eligible taxpayers with Saudi operations.
Businesses with a regional footprint should maintain visibility over these requirements rather than managing each development without a consolidated compliance calendar.
What should Lebanon businesses review now?
Finance and tax teams should reassess VAT processes and refund positions against the 2026 requirements and identify any broader compliance procedures that need updating.
Businesses with regional operations should also confirm that responsibility for developments in other jurisdictions is clearly assigned.
How BDO Lebanon can help
BDO Lebanon helps businesses assess the impact of current tax requirements, review existing compliance processes and identify potential exposures or recovery opportunities.
When did your organisation last test whether its tax processes still reflect the current rules?
Speak to our Lebanon tax professionals to identify which areas should be reviewed before year-end.
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