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A NEW TAX LAW NO 7 & 8 FOR THE YEAR 2010. THIS IS A SUMMARY AND IF YOU WOULD LIKE MORE DETAILS, PLEASE LET US KNOW TO PUT YOU IN TOUCH WITH OUR TAX CONSULTANT IN LIBYA.
Your Platform to Libya New Tax Laws ( No. 7 & 8 of 2010 ) I - Income TAX: On the 28th of January 2010 the General People Congress issued a new income tax law no. (7) Of the year 2010 which replaced the income tax law no. (11) of the year 2004 and has come into force as from 28/04/2010 , the date of its publishing in MUDAWANAT AL TASHRI-AT ( The Official Gazette ) no. 4 of the year 2010. Hereunder is a summary of some important points of this law which have to be observed by all local and foreign tax-payers whether they are individuals or companies. 1. Tax on Salaries and Wages: A. New Tax Rates : The following new salary tax rates have to be deducted from the gross salary less employee social insurance contribution, employee social solidarity fund contribution and income tax exemptions mentioned below: No. Gross Salary Brackets Tax Rate Per Year Per Month 1 12,000 1,000 5% 2 Over 12,000 Over 1,000 10% B. Old Rates: Old rates were as follows: No. Gross Salary Brackets Tax Rate Per Year Per Month 1 4,800 400 8% 2 4,200 400 10% 4 Over 9,600 Over 800 15% 111 Harp Island Close, London, NW10 0DQ, UK – Tel +44208 208 3120 - Reg. No. 6554019. Email: email@example.com www.soclibya.com Your Platform to Libya Tax exemptions deductible from gross salaries are as follows: A. New Tax Exemptions: Social Status Per Year Per Month Single 1,800 150 Married man with no 2,400 200 children Married or widower or 2,400 +300 per 200 + 25 per each child divorced with children each child B. Old Tax Exemptions Per Social Status Per Month Year Single 1200 100 Married man with no children 1800 150 Married or widower or divorced with 2400 200 children Notes: For calculating the exemptions the year is considered to be 360 days divided to 12 equal months. 111 Harp Island Close, London, NW10 0DQ, UK – Tel +44208 208 3120 - Reg. No. 6554019. Email: firstname.lastname@example.org www.soclibya.com Your Platform to Libya II. Tax on Companies – Corporate Tax : A. New Tax Rates Bracket Income Tax Rate Jihad Tax Rate All net profit Flat rate of 20% 4% B. Old Tax Rates were as follows : Income Tax No. Brackets Jihad Tax Rate Rate First 200,000 15% 4% Following 300,000 20% 4% Following 500,000 25% 4% Following 500,000 30% 4% Following 500,000 35% 4% Over Following 40% 4% 2,000,000 Note : Responsibility of the Company's Manager for its Taxes: According to the new tax law , all companies are required to submit to the TAX DEPARTMENT an annual tax declaration on their income on the relevant form certified by an external auditor ( certified accountant ) within no later than four months from the end of their fiscal year. II - Jihad Tax Rates: A: Jihad tax rates on Salaries and Wages: This tax remained the same (unchanged). The Jihad Tax Rate of 3% is deductible from gross salaries less Employee Social Insurance Contribution and Employee's Social Solidarity Fund. B: Jihad tax rates on Companies: This tax also remained the same (unchanged), The Jihad tax rate on companies is 4 % of the net profit. 111 Harp Island Close, London, NW10 0DQ, UK – Tel +44208 208 3120 - Reg. No. 6554019. Email: email@example.com www.soclibya.com Your Platform to Libya III - Stamp Duty Law No. (8) Of the year 2010: On the 28th of April 2010 the General People Congress issued also a new stamp duty law no. (8) of the year 2010 concerning amendment of tax rates of some items subject to stamp duty according to the tax table attached with the income tax law no. (12) of the year 2004 . Law no(8) referred to has come into force from 28/04/2010 , the date of its publishing in MUDAWANAT AL TASHRI-AT ( The Official Gazette ) no. 4 of the year 2010 referred to above. The following important items and their tax rates extracted from the law may be of general interest: Item Old No. Details New tax rate no. rate Invoices ( purchase of cars and 1 24 A 3% 2% alike to be paid by the buyer ) Invoices ( purchase of materials 2 ) over 100 Libyan Dinar to be 24 B 2% 1% paid by the buyer Rental Contracts to be paid by 3 27 1% 1% the tenant Contracts for supplies , services 4 ,Contracting , Public works ... 28 A 2% 1% etc. to be paid by the contractor Sub- contracts to be paid by the 5 28 B 0.10% 0.10% sub-contractor 6 Opening of Letters of credit 33A 0.20% 0.20% Guarantee , Insurance … etc. of 7 35 0.50% 0.50% Value 8 Receipts 36 0.50% 0.50% Amounts paid by public organizations financed from the 9 general budget of the STATE to 43 0.50% 0.50% others to be paid by the receivers 111 Harp Island Close, London, NW10 0DQ, UK – Tel +44208 208 3120 - Reg. No. 6554019. Email: firstname.lastname@example.org www.soclibya.com Your Platform to Libya IV. Social Security Contributions (INAS) - Laws No. 13 of 1981 Details Rate Employee contribution 3.75 % of gross salary Employer contribution 11.25 % of gross salary Total Contribution 15 % of gross salary The total social security contribution of employees and employer should be paid by the employer directly to the Pension Department. V. Employee Social Solidarity Fund Contribution: A rate of 1 % of the gross salary should be deducted from the gross salary of each employee and should be paid to the Social Solidarity Fund Department. I hope that the above summary is useful to foreign as well as local companies and individuals operating in Libya. For those who need more details they are advised to contact the author on his following address: (Note: All amounts are in Libyan Dinar) 111 Harp Island Close, London, NW10 0DQ, UK – Tel +44208 208 3120 - Reg. No. 6554019. Email: email@example.com www.soclibya.com
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