## 32. Summary of the Tax System ## Source details **Canonical URL:** [32. Summary of the Tax System](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07148.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07148.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07148.pdf.json) --- ### 1. TAXES ON INCOME, PROFITS, AND CAPITAL GAINS — A. Individuals - Tax on agricultural income - Nature: Tax levied on income from the pure agricultural exploitation of agricultural land. - Exemptions/Deductions: Income generated from the first 10 years from the Law’s entry into force. Personal allowances: (a) single person LD 1,200; (b) married person with no dependent children LD 1,800; (c) married person, widowed, or divorced, with dependent children LD 2,400. In addition: (a) life assurance premiums on the life of the taxpayer, his wife, or dependents up to a maximum of LD 600 annually; (b) premiums on general insurance up to LD 420 annually. - Rates: A flat rate of 5 percent. - Tax on industrial and commercial profits - Nature: Income from commercial, industrial, or trade activities. - Exemptions/Deductions: Personal allowances as above. In addition: life insurance premiums up to LD 600 annually; premiums on general insurance up to LD 420 annually. - Rates (LD) (In percent): - Commercial Profits: - First 10,000 ............... 20% - Next 20,000 ............... 25% - Next 30,000 ............... 30% - Additional Income ......... 35% - Industrial Profits: - First 10,000 ............... 15% - Next 20,000 ............... 20% - Next 30,000 ............... 25% - Additional Income ......... 30% - Tax on income from abroad - Nature: Income from abroad of Libyan and foreign residents in the country are subject to this tax. - Exemptions/Deductions: Salaries, wages, and similar income received for work performed abroad are exempt. - Rates: A flat rate of 20 percent. - Tax on interest income - Nature: Interest resulting from deposits with banks. - Exemptions/Deductions: Savings accounts are exempt. - Rates: A flat rate of 5 percent. - Tax on income in entities that apply the phrase “partners, not employees” - Nature: Income of partners in all production entities that apply the phrase “partners, not employees”. - Exemptions/Deductions: Personal allowances as above. In addition: life insurance premiums up to LD 600 annually; premiums on general insurance up to LD 420 annually. Others: (a) depreciation on all assets used to generate income; (b) bad debt; (c) sums paid under the social security system, or other approved schemes not to exceed 10 percent of the total collected; (d) taxes and fees paid in connection with the activity taxed; (e) contributions to government recognized non profit charitable entities, not in excess of 2 percent of net income. - Rates (LD) (In percent): - First 10,000................ 10% - Next 20,000 ............... 15% - Additional Income ......... 20% - Tax on noncommercial profits - Nature: Applies to income from the liberal professions. - Exemptions/Deductions: Personal allowances as above. In addition: life insurance premiums up to LD 600 annually; premiums on general insurance up to LD 420 annually. Others: (a) depreciation on all assets used to generate income; (b) bad debt; (c) sums paid under the social security system, or other approved schemes not to exceed 10 percent of the total collected; (d) taxes and fees paid in connection with the activity taxed; (e) contributions to government recognized non profit charitable entities, not in excess of 2 percent of net income. - Rates (LD) (In percent): - First 10,000................ 15% - Next 20,000 ............... 20% - Next 30,000 ............... 25% - Additional Income ......... 30% - Tax on wages and salaries - Nature: Applies to income from labor and any income from any service or function, whether permanent or temporary. The tax is deducted at source by the employer. - Exemptions/Deductions: Personal allowances as above. In addition: (a) contributions to social security, or other approved schemes; (b) amounts received as reimbursement for expenses incurred in performing duties; (c) deductions or fines; (d) monetary allowances for leave accumulated at end of service. Others: (a) depreciation on all assets used to generate income; (b) bad debt; (c) sums paid under the social security system, or other approved schemes not to exceed 10 percent of the total collected; (d) taxes and fees paid in connection with the activity taxed; (e) contributions to government recognized non profit charitable entities, not in excess of 2 percent of net income. - Rates (LD) (In percent): - First 4,800.......... 8% - Next 4,800 ........ 10% - Additional Income ......... 15% - Jihad tax - Nature: An additional tax levied on all taxable income. - Exemptions/Deductions: None. - Rates (LD) (In percent): - 0–50 per month ............. 1% - 50–100 per month........... 2% - Over 100 ......................... 3% ### 1. TAXES ON INCOME, PROFITS, AND CAPITAL GAINS — B. Corporation - Tax on companies - Nature: Companies and branches of foreign companies in Libya are subject to this tax. Petroleum companies are subject to special provisions concerning royalties, income tax, and production sharing. - Exemptions/Deductions: Establishment expenses as defined by the Law. - Rates (LD) (In percent): - First 200,000................ 15% - Next 300,000 ............... 20% - Next 500,000 ............... 30% - Next 500,000 ............... 35% - Additional Income ......... 40% ### 2. TAXES ON GOODS AND SERVICES - General sales tax - Nature: Does not exist. - Exemptions/Deductions: None. - Rates: None. - Excises - Nature: Excise taxes apply to a number of commodities whether domestically-produced or imported. Taxes on petroleum products are specific and are the same on both imports and domestic production. Taxes on all other commodities are ad valorem and are lower on domestic production as a protective measure. - Exemptions/Deductions: None. - Rates: - For petroleum products, the taxes are in the range of 7–32 dirhams per liter. - For other commodities, the rates are in the range of 2–5 percent on domestic production (Production Tax) and 15–25 percent on imports (Consumption Tax). ### 3. TAXES ON INTERNATIONAL TRADE - Import duties - Nature: Duties are levied on imports classified according to Brussels classification. - Exemptions/Deductions: None. - Rates: Two import duty rates: 10 percent for tobacco products and zero for all other goods. - Export taxes - Nature: Duties are levied on a small number of agricultural products, textiles, precious metals, and medicines. Exports of public corporations are exempt. - Exemptions/Deductions: Exports of public corporations are exempt. - Rates: - Export taxes are specific for agricultural products and range from LD 100 to LD 1,500 per kilo. - Exports of manufactured products are subject to a 50 percent tax. ### 4. SOCIAL SECURITY - Social security - Nature: Applies to wages and salaries. - Exemptions/Deductions: None. - Rates: - Employees contribute 3.75 percent and employers 11.25 percent. ### 5. OTHER TAXES - Stamp duties - Nature: Levied on a range of instruments and transactions including bills of exchange, leases, contracts, mortgages, and licenses. - Exemptions/Deductions: Documents and actions drawn up or concluded by public agencies; documents and actions drawn up or concluded by government-recognized organizations for professional, social, cultural, charitable, or athletic activities; documents and actions drawn up or concluded by foreign diplomatic or consular entities, subject to reciprocity; documents and actions drawn up or concluded by certain international organizations; documents related to Pilgrimage to Mecca; documents related to studies in various educational institutions; documents or actions drawn up or concluded by persons drawing basic pensions or wages; documents submitted by persons seeking employment; other exemptions specific to each stamp duty also apply. - Rates: The duty is specific to each action as stipulated by its Law. - The Great Man-Made River (extra-budgetary tax) - Nature: Extra-budgetary tax levied on sales of gasoline, diesel, cigarettes, and airline tickets. - Exemptions/Deductions: None. - Rates: - Gasoline (per liter) .LD 0.020 - Diesel (per liter) .....LD 0.005 - Cigarettes (per cigarette) .LD 0.010 - Airline tickets................. 10% *Source: _cr07148 - 32. Summary of the Tax System (Updated: November 2006).* ### 1. Summary of Real Sector Statistics, 2001–05....................................................................3 ### Summary of Real Sector Statistics, 2001–05 ### Real sector and GDP composition - 1. Summary of Real Sector Statistics, 2001–05 - 2. Sectoral Distribution of GDP at Current Prices, 2001–05 - 3. Sectoral Distribution of GDP at Constant 1997 Prices, 2001–05 ### Investment and capital formation - 4. Gross Fixed Capital Formation by Economic Sector, 2001–05 - 17. Central Government Development Expenditures, 2001–04 ### Labor and employment - 5. Labor Force and Employment, 2000–04 ### Prices, consumer goods, and subsidies - 6. Consumer Price Index (End of Period), 2001–06 - 7. Consumer Price Index (Average), 2001–06 - 8. Retail Prices of Selected Items in Tripoli, 2001–05 - 18. Food Subsidies, 2001–05 - 12. Domestic Retail Prices of Petroleum Products, 2001–06 ### Energy, petroleum, gas, and related production - 9. Great Man-Made River Financial Operations, 2000–04 - 10. Domestic Production of Petroleum Products, 2001–06 - 11. Domestic Consumption of Petroleum Products, 2001–06 - 13. Production and Exports of Gas and Petrochemicals, 2001–06 - 14. Production of Crude Oil and Exports of Crude Oil and Refined Products, 2001–06 ### Fiscal operations and government expenditure - 15. Consolidated Fiscal Operations, 2001–06 - 16. Government Administrative Expenditure, 2001–05 ### Financial sector, monetary aggregates, and banking - 19. Summary Accounts of the Central Bank of Libya, 2001–06 - 20. Summary Accounts of the Deposit Money Banks and Regional Banks, 2001–06 - 21. Monetary Survey, 2001–06 - 22. Foreign Assets and Liabilities of the Central Bank and Commercial Banks, 2001–06 - 23. Summary Accounts of the Libyan Foreign Bank, 2001–06 - 24. Loans Disbursed by the Agricultural Bank, 2001–06 - 25. Loans Disbursed for Housing and Construction Projects by the Savings and Real Estate Investment Bank., 2001–06 - 26. Loans Disbursed by the Development Bank, 2001–06 - 27. Distribution of Credit Facilities by Commercial Banks, 2001–06 - 28. Interest Rate Structure, 2001–06 ### External sector and trade - 29. Balance of Payments, 2001–05 - 30. Composition of External Trade, 2001–05 - 31. Direction of Trade, 2001–05 *Source: _cr07148 - 1. Summary of Real Sector Statistics, 2001–05* ### 32. Summary of the Tax System........................................................................................ ### 32. Summary of the Tax System........................................................................................ ### Update - Updated: November 2006 *Source: _cr07148 - 32. Summary of the Tax System (Updated: November 2006).* ### 1. TAXES ON INCOME, PROFITS, AND CAPITAL GAINS ### 1. TAXES ON INCOME, PROFITS, AND CAPITAL GAINS ### A. Individuals - Tax on agricultural income - Nature: Tax levied on income from the pure agricultural exploitation of agricultural land. - Exemptions/Deductions: Income generated from the first 10 years from the Law’s entry into force. Personal allowances: (a) single person LD 1,200; (b) married person with no dependent children LD 1,800; (c) married person, widowed, or divorced, with dependent children LD 2,400. In addition: (a) life assurance premiums on the life of the taxpayer, his wife, or dependents up to a maximum of LD 600 annually; (b) premiums on general insurance up to LD 420 annually. - Rates: A flat rate of 5 percent. - Tax on industrial and commercial profits - Nature: Income from commercial, industrial, or trade activities. - Exemptions/Deductions: Personal allowances as above. In addition: life insurance premiums up to LD 600 annually; premiums on general insurance up to LD 420 annually. - Rates (LD) (In percent): - Commercial Profits: - First 10,000 ............... 20% - Next 20,000 ............... 25% - Next 30,000 ............... 30% - Additional Income ......... 35% - Industrial Profits: - First 10,000 ............... 15% - Next 20,000 ............... 20% - Next 30,000 ............... 25% - Additional Income ......... 30% - Tax on income from abroad - Nature: Income from abroad of Libyan and foreign residents in the country are subject to this tax. - Exemptions/Deductions: Salaries, wages, and similar income received for work performed abroad are exempt. - Rates: A flat rate of 20 percent. - Tax on interest income - Nature: Interest resulting from deposits with banks. - Exemptions/Deductions: Savings accounts are exempt. - Rates: A flat rate of 5 percent. - Tax on income in entities that apply the phrase “partners, not employees” - Nature: Income of partners in all production entities that apply the phrase “partners, not employees”. - Exemptions/Deductions: Personal allowances as above. In addition: life insurance premiums up to LD 600 annually; premiums on general insurance up to LD 420 annually. Others: (a) depreciation on all assets used to generate income; (b) bad debt; (c) sums paid under the social security system, or other approved schemes not to exceed 10 percent of the total collected; (d) taxes and fees paid in connection with the activity taxed; (e) contributions to government recognized non profit charitable entities, not in excess of 2 percent of net income. - Rates (LD) (In percent): - First 10,000................ 10% - Next 20,000 ............... 15% - Additional Income ......... 20% - Tax on noncommercial profits - Nature: Applies to income from the liberal professions. - Exemptions/Deductions: Personal allowances as above. In addition: life insurance premiums up to LD 600 annually; premiums on general insurance up to LD 420 annually. Others: (a) depreciation on all assets used to generate income; (b) bad debt; (c) sums paid under the social security system, or other approved schemes not to exceed 10 percent of the total collected; (d) taxes and fees paid in connection with the activity taxed; (e) contributions to government recognized non profit charitable entities, not in excess of 2 percent of net income. - Rates (LD) (In percent): - First 10,000................ 15% - Next 20,000 ............... 20% - Next 30,000 ............... 25% - Additional Income ......... 30% - Tax on wages and salaries - Nature: Applies to income from labor and any income from any service or function, whether permanent or temporary. The tax is deducted at source by the employer. - Exemptions/Deductions: Personal allowances as above. In addition: (a) contributions to social security, or other approved schemes; (b) amounts received as reimbursement for expenses incurred in performing duties; (c) deductions or fines; (d) monetary allowances for leave accumulated at end of service. Others: (a) depreciation on all assets used to generate income; (b) bad debt; (c) sums paid under the social security system, or other approved schemes not to exceed 10 percent of the total collected; (d) taxes and fees paid in connection with the activity taxed; (e) contributions to government recognized non profit charitable entities, not in excess of 2 percent of net income. - Rates (LD) (In percent): - First 4,800.......... 8% - Next 4,800 ........ 10% - Additional Income ......... 15% - Jihad tax - Nature: An additional tax levied on all taxable income. - Exemptions/Deductions: None. - Rates (LD) (In percent): - 0–50 per month ............. 1% - 50–100 per month........... 2% - Over 100 ......................... 3% ### B. Corporation - Tax on companies - Nature: Companies and branches of foreign companies in Libya are subject to this tax. Petroleum companies are subject to special provisions concerning royalties, income tax, and production sharing. - Exemptions/Deductions: Establishment expenses as defined by the Law. - Rates (LD) (In percent): - First 200,000................ 15% - Next 300,000 ............... 20% - Next 500,000 ............... 30% - Next 500,000 ............... 35% - Additional Income ......... 40% ### 2. TAXES ON GOODS AND SERVICES - General sales tax - Nature: Does not exist. - Exemptions/Deductions: None. - Rates: None. - Excises - Nature: Excise taxes apply to a number of commodities whether domestically-produced or imported. Taxes on petroleum products are specific and are the same on both imports and domestic production. Taxes on all other commodities are ad valorem and are lower on domestic production as a protective measure. - Exemptions/Deductions: None. - Rates: - For petroleum products, the taxes are in the range of 7–32 dirhams per liter. - For other commodities, the rates are in the range of 2–5 percent on domestic production (Production Tax) and 15–25 percent on imports (Consumption Tax). ### 3. TAXES ON INTERNATIONAL TRADE - Import duties - Nature: Duties are levied on imports classified according to Brussels classification. - Exemptions/Deductions: None. - Rates: Two import duty rates: 10 percent for tobacco products and zero for all other goods. - Export taxes - Nature: Duties are levied on a small number of agricultural products, textiles, precious metals, and medicines. Exports of public corporations are exempt. - Exemptions/Deductions: Exports of public corporations are exempt. - Rates: - Export taxes are specific for agricultural products and range from LD 100 to LD 1,500 per kilo. - Exports of manufactured products are subject to a 50 percent tax. ### 4. SOCIAL SECURITY - Social security - Nature: Applies to wages and salaries. - Exemptions/Deductions: None. - Rates: - Employees contribute 3.75 percent and employers 11.25 percent. ### 5. OTHER TAXES - Stamp duties - Nature: Levied on a range of instruments and transactions including bills of exchange, leases, contracts, mortgages, and licenses. - Exemptions/Deductions: Documents and actions drawn up or concluded by public agencies; documents and actions drawn up or concluded by government-recognized organizations for professional, social, cultural, charitable, or athletic activities; documents and actions drawn up or concluded by foreign diplomatic or consular entities, subject to reciprocity; documents and actions drawn up or concluded by certain international organizations; documents related to Pilgrimage to Mecca; documents related to studies in various educational institutions; documents or actions drawn up or concluded by persons drawing basic pensions or wages; documents submitted by persons seeking employment; other exemptions specific to each stamp duty also apply. - Rates: The duty is specific to each action as stipulated by its Law. - The Great Man-Made River (extra-budgetary tax) - Nature: Extra-budgetary tax levied on sales of gasoline, diesel, cigarettes, and airline tickets. - Exemptions/Deductions: None. - Rates: - Gasoline (per liter) .LD 0.020 - Diesel (per liter) .....LD 0.005 - Cigarettes (per cigarette) .LD 0.010 - Airline tickets................. 10% *Sources: Various published sources.* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2007/_cr07148.pdf_