Lebanon’s 2026 Budget Law: The Tax, Fee, and Fine Changes Businesses and Individuals Need to Know

Lebanon’s 2026 Budget Law, Law No. 40 of 2026, introduces important tax, fee, fine, VAT, inheritance, real estate, customs, and administrative changes that may affect companies, taxpayers, property owners, travelers, importers, and individuals with pending legal or fiscal matters.

The law was published in the Official Gazette, Issue 7, on February 10, 2026, and took effect immediately upon publication. Beyond approving the government’s annual spending and revenue figures, it includes a wide range of procedural and financial amendments that require careful review.

What Is Law No. 40?

Law No. 40 is Lebanon’s General Budget Law for 2026. It sets the government’s budget framework for the fiscal year, but it also includes several tax, fee, penalty, and procedural changes that have practical consequences for businesses and individuals.

The Headline Budget Figures

For the fiscal year running from January 1 to December 31, 2026, the law sets total budget appropriations and estimated revenue at the same amount.

Emergency and Additional Spending Powers

Under Article 85 of the Constitution, the President, acting on a Cabinet decision, may open exceptional or additional credits or transfer credits within the 2026 budget to meet urgent unforeseen needs. These measures are capped at LBP 1 trillion and must be submitted to Parliament for approval at its first subsequent session.

Grants, Loans, and Oversight

Foreign grants and loans extended to public administrations, public institutions, independent authorities, councils, funds, and other bodies managing public services remain subject to Court of Audit oversight. Unused credits funded by cash grants and loans are carried forward to subsequent years’ budgets.

Major Reform of Tax Penalties

One of the most important parts of Lebanon’s 2026 Budget Law is the reform of tax fines. The law makes settlement easier in some cases, while also increasing several underlying fines significantly.

Settlement of tax fines

The Minister of Finance may settle fines imposed and collected by the Ministry’s Directorate General of Finance for fines arising on taxes issued after the law’s publication, with maximum discount rates of 85% for verification or assessment fines, 75% for collection fines, and 60% for fixed lump-sum fines.

A reduced fine may not fall below LBP 200,000, or $3 for taxes collected in foreign currency.

Higher fixed and minimum fines

Effective from fiscal year 2026, several fixed lump-sum fines and minimum fines under the Tax Procedures Law are raised 25-fold. The law also resets certain minimum fines under Articles 109 and 110 to new fixed amounts depending on the taxpayer category.

One-Time General Fine Reduction

As a one-off measure, certain fines owed to the State, municipalities, municipal unions, public institutions, or other public-law bodies are reduced by 85%, provided the reduced fine and any principal due are paid in full within three months of the law’s publication. The reduced amount may not fall below LBP 200,000 or $5.

Higher Penalties for Beneficial-Ownership Non-Compliance

Article 18 significantly tightens Lebanon’s ultimate beneficial owner reporting regime and raises the associated fines, effective January 1, 2026. Companies should treat UBO filings and recordkeeping as a top compliance priority, because late, incomplete, inaccurate, or missing beneficial ownership information can now trigger very substantial penalties.

Currency Rules for Paying State Fees and Taxes

Most dues owed to the Lebanese State are payable in Lebanese pounds, converted at Banque du Liban’s official effective exchange rate where needed. Certain items remain payable in foreign currency, including selected state profit shares, specific taxes on foreign income, petroleum-related taxes, sea and air departure fees, consular fees, airport fees, and certain museum or heritage-site entry fees charged to non-Lebanese visitors.

New Fee on Foreign Trucks Entering Lebanon

Article 23 introduces a $50 fee per transaction on foreign trucks used for international freight, including certain transit, loading, and third-country transport permits. Trucks from countries that exempt Lebanese trucks from equivalent fees are exempt on a reciprocal basis.

VAT: Refund Deadlines and Deduction Rules

The 2026 Budget Law adjusts several VAT rules that may affect taxpayers and businesses.

• The periodic VAT declaration deadline is extended from 20 days to one month.
• Input VAT on touring cars is deductible only up to the VAT due on a car valued at $30,000 before VAT, subject to exceptions.
• Taxpayers may request refunds of excess deductible VAT once a year, while exporters may request refunds per VAT period.
• The minimum claimable VAT refund amount is LBP 200,000,000.
• Approved but unpaid refunds may accrue interest, capped at 9% annually, after the applicable waiting period.

Inheritance and Transfer Duty Changes

Article 45 significantly reworks Lebanon’s transfer duty rules for inheritances, gifts, and endowments. For events occurring after November 15, 2022, the tax-exempt portion of an inherited share is increased substantially, with different thresholds depending on the heir’s relationship to the deceased.

• LBP 2,400,000,000 for descendants, spouses, and parents.
• LBP 960,000,000 for other ascendants and siblings.
• LBP 480,000,000 for all other heirs.

The law also provides additional exemptions in certain family and disability-related situations, updates donation duty thresholds, and introduces a new estate exclusion for buildings destroyed or being destroyed due to Israeli attacks on Lebanon, while keeping the land value included.

Real Estate and Property-Related Deadlines

The law includes several important property-related measures. These include a five-year extension of certain deadlines governing non-Lebanese acquisition of property rights, a window to regularize undeclared property changes before June 30, 2026, continued use of the historic LBP 1,500 per US dollar rate for certain old land registry contracts through December 31, 2026, revised survey and demarcation costs, and a one-year extension for certain building-violation settlement deadlines.

Updated General Security Fees

Article 36 replaces the fee schedule for a wide range of General Security transactions, including Lebanese passports, residency cards, sponsor transfers, visa transactions, student residency, artist and musician permits, Palestinian travel documents, restricted-zone access, and media-related permits. Because the schedule includes many line items, each transaction should be checked individually.

Updated Port and Maritime Fees

Article 39 revises several port and maritime fees, including navigation and lighthouse dues, annual fees for vessel categories, cargo-handling fees, licensing fees for maritime agents and suppliers, and penalties for maritime violations. Pollution fines may reach LBP 12,000,000,000.

Incentives for Electric and Hybrid Vehicles

Article 53 extends customs incentives for cleaner vehicles imported within five years of the law taking effect. Fully electric vehicles may benefit from a full customs duty and excise tax exemption, plus a 70% exemption from registration and road or mechanical fees on first registration. Hybrid vehicles may benefit from an 80% customs duty and excise tax exemption, plus the same 70% registration and road or mechanical fee exemption.

Vehicle Exemptions for Persons with Disabilities

The law reaffirms exemptions for vehicles used by persons with disabilities, subject to value limits, Ministry of Social Affairs certification, and a five-year gap before another eligible vehicle may be purchased.

New Tax on Sayrafa Platform Profits

Article 52 confirms that profits realized by individuals and companies from operations conducted on Banque du Liban’s Sayrafa platform, where those profits exceed $100,000, remain subject to an additional exceptional tax of 17%, with only salary and wage-related exchange differences excluded.

Other Notable Provisions

• The government is authorized to legislate in customs matters by Cabinet decree through December 31, 2028.
• The threshold for accepting cash and in-kind donations to the State is increased to LBP 11,500,000,000 under specified procedures.
• Quarry and crusher licensing fees are increased.
• The Ministry of Education faces restrictions on additional teacher hiring funded through certain mutual-aid or school-related sources, with narrow exceptions.

What This Means for You

Given the scale of changes in the 2026 Budget Law, this is an important moment for businesses, property owners, taxpayers, heirs, importers, and individuals with pending tax, estate, immigration, real estate, or customs matters to review their position.

How Phoenix Law Firm Can Help

Phoenix Law Firm assists clients in understanding and responding to Lebanon’s 2026 Budget Law, including:

• Reviewing exposure to new tax and beneficial-ownership fines.
• Pursuing settlement where available.
• Structuring inheritance, gift, and estate planning around the revised transfer duty thresholds.
• Advising on real estate regularization deadlines.
• Confirming which General Security, port, customs, or administrative fees apply to a specific transaction.
• Assessing eligibility for electric, hybrid, or disability-related vehicle exemptions.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Each case depends on its own facts, deadlines, documents, and applicable procedures.