Lebanon has finally brought into effect a treaty signed with Italy in 2001 for avoiding double taxation pertaining to income-related taxes. The agreement has been activated since November 21, 2011.

The treaty applies to persons who are residents of one or both of the contracting states. It applies to taxes on income imposed on behalf of either of the two states.

In Lebanon, the treaty applies to tax on the profits of industrial, commercial, and non commercial professions, tax on salaries, wages, and pensions, tax on income derived from movable capital, and tax on built property.

According to the agreement, whenever a resident in Lebanon earns income taxed in Italy, Lebanon shall deduct from the payable tax the tax paid in Italy, as long as it doesn’t exceed the amount of the Lebanese tax. The same is applicable for residents in Italy.

Lebanon has inked similar treaties with several countries including France, Malaysia, Poland, and Turkey, as well as Armenia, Bahrain, Egypt, and the UAE.