What exactly is the Value Added Tax (VAT)?
The value added tax is a tax on consumption of goods and services provided in Lebanon, whether produced locally or imported from a foreign country. A VAT is an important feature of modern tax systems. Over the last two decades, it has been implemented in both developing and developed countries and is currently applied in more than 125 countries. Typically, VAT has been used as a substitute for production and sales taxes, as well as for custom tariffs.

How can I get a VAT Tourist Refund?
Tourists departing from Lebanon are entitled to a VAT refund on goods purchased during their stay. Every foreigner or Lebanese person residing abroad, and whose stay in Lebanon does not exceed three continuous months, is entitled to ask for a VAT refund. A VAT refund is not applicable to services (hotels, telecommunications, car rentals, guided tours, etc), foods and beverages (restaurants, cafes, supermarkets), fuel, or tobacco.

What are the conditions required for a VAT Refund?
The goods must be transported in the tourist’s personal luggage and must have been bought from a VAT registered retailer. The total value for each invoice from each store must exceed 150,000 LBP per day. The purchases should be exported from Lebanon within three months of the date of purchase. As long as the tourist is still within the time limit determined above, the goods don’t necessarily have to be transported upon the tourist’s departure from Lebanon. Finally, the purchases should be new and not used in Lebanon.

How can I obtain VAT Tourist Refund?
First, ask the VAT registered retailer to issue an invoice containing the retailer’s VAT registration number, name, and address as well as the description and value of the transaction and the amount of VAT paid. Then obtain a refund claim from that retailer (or at the airport when departing) and fill it out. Present the customs administration at the point of departure with the goods, the VAT refund claim, and the invoices related to that refund. Note that the customs administration will keep the original invoices and inspect the goods for which a refund is claimed.

What goods and services are exempt from VAT?
There are two kinds of exemptions. Some goods and services are exempted for social reasons: the aim is to lessen the burden of the tax on middle and low-income families. Such exemptions include, among others, medical services, hospital fees, education, activities performed by non-profit organizations for non-profit purposes, and farmers’ activities related to the supply of their agricultural production. Other goods and services, such as banking and financial services, are exempt for administrative reasons or to avoid double taxation, as for insurance, sale and rent of built property (except commercial rent), and lottery.

Why does Lebanon need to implement a VAT?
Apart from being an important element of tax reform, VAT implementation is compatible with the international trend in tax policy reforms. Over the last two decades, many countries have introduced VAT as a step toward modernizing their tax systems. Moreover, revenues from VAT will help reduce budget deficit and national debt. Perhaps most importantly, VAT is a major step in Lebanon’s preparation for entering into international trade agreements. As a taxation alternative, VAT has an inherent mechanism that ensures tax collection and encourages fiscal transparency, thus serving public and national interest.