Taxes in Libya

The Tax Authority operates under Libya's Ministry of Finance. Tax offices in Tripoli, Benghazi and municipalities handle taxpayers according to the activity centre, principal establishment or location of taxable assets, while local administrative practice may vary. The main income-tax framework is based on Income Tax Law No. 7/2010, Executive Regulation Decision No. 592/2010, Law No. 2/2017 and the 2025 amendment to Article 25 of Law No. 1/2025. The official Tax Authority portal provides services for taxpayer registration, income-tax returns, certificates, stamp duty and wage tax, although the nationwide digital rollout remains transitional. Personal income tax covers trade, industry, crafts, partner income, independent professions, employment and equivalent income, and interest on bank deposits. Commercial profits are taxed at 15%, industrial and craft profits at 10%, partner income at 10%, independent-profession income at 15% and bank-deposit interest at 5%. Employment income is taxed at 5% on the first LYD 1,200 and 10% on the excess. An annual taxable-income exemption is available up to LYD 1,800 for a single taxpayer, LYD 2,400 for a married taxpayer without dependent children and an additional LYD 300 for each minor child. Insurance premiums can qualify within statutory limits. Corporate income tax generally applies to national companies, foreign-company branches and other legal persons carrying out commercial, industrial, craft or real-estate-investment activities. The corporate rate is 20% on taxable net income. A company may use a cash or accrual basis for the year, and documented business costs can be deductible. Certain allocations of a foreign head office's administration, services, interest or commissions are capped at 5% of approved administrative expenses. The Tax Authority may estimate a branch's income by reference to its share of global revenue. Losses may be carried forward for up to five years, and gains from selling capital assets or a business are included in taxable income rather than handled under a separate capital-gains tax identified in the reviewed framework. A company generally files an annual return certified by a Libyan registered accountant or auditor within one month after approval of its financial statements and no later than four months after the end of the fiscal year. A partnership return is due within 90 days after the tax year ends. Employers withhold employment tax and submit worker and income data; current specialist guidance also reports monthly salary declarations. Tax of up to LYD 100 is paid in one instalment. Tax above LYD 100 is paid in four instalments during the 10th to 25th of March, June, September and December. Late payment can add 1% for each month or part of a month of at least 15 days, subject to a maximum of 12%. The Tax Authority can issue an estimated assessment when a return is not filed and an additional assessment when a return is concealed, false or incomplete. Non-filing can result in a penalty equal to the final assessed tax. Bookkeeping or document obstruction can attract fines of LYD 1,000 to LYD 50,000, late-payment violations can attract fines of LYD 500 to LYD 10,000 and intentional evasion can lead to a penalty of at least four times the unpaid tax. The 2025 amendment removed the limitation period for State claims whose previous limitation periods had not ended, creating possible historical exposure that requires case-specific review. A taxpayer can object to a Tax Authority notice within 45 days. The objection fee is 0.5% of the disputed tax, with a minimum of LYD 10. A primary committee generally has a target of two months for its decision. An appeal can be filed within 15 days, with a fee of 1% of the disputed tax and a minimum of LYD 20. The primary assessment remains payable during an appeal. Companies and partnerships need their books and supporting documents to challenge an assessment effectively, and the taxpayer carries the burden of proof. Settlement may be possible before the primary committee issues its decision; the appeal committee's decision is final under the reviewed framework. Stamp duty applies to specified documents, transactions, contracts and records and is generally due when a document is created, used or a transaction occurs. A document created abroad can become taxable when it is used in Libya. Main supply, service and public-works contracts generally attract 1%, subcontract assignments approximately 0.1%, transfers of real estate for consideration 3%, gratuitous transfers of real estate between living persons 2%, transfers of vehicles 2% and transfers of other movable property above LYD 100 at 1%. Current specialist guidance commonly reports a 0.5% payment through the Tax Department, while exemptions can apply to public bodies, diplomatic bodies and specified family transfers. Current specialist tax summaries reviewed for Libya identify no VAT and no general excise tax. Customs duties, import levies and related service fees are handled by the Customs Authority and are separate from the income-tax system. Social-security payments, Social Unity Fund contributions and other payroll contributions are also outside this post except where their tax treatment creates a direct connection. Law No. 44/1970 formally lists a Jihad Tax with rates of 4% on taxable non-agricultural profit or income, 2% on exempt income and 1% to 3% on salary bands. The Supreme Court Constitutional Circuit declared that law unconstitutional on 3 February 2025, while a legal database still marks it active. Its current collection, refund and application status therefore requires confirmation from the Tax Authority or a Libyan tax lawyer rather than an assumption that the surcharge is settled. Libyan companies and foreign-company branches can face taxation on Libyan and foreign-source income under the rules applicable to them, while foreign income of Libyan citizens and resident foreigners can fall within listed exemptions. Libya has tax conventions in force with India, Pakistan, Sudan, Egypt, the Arab Maghreb Union, France, Malta, the United Kingdom, Slovakia, Serbia, Syria and Singapore according to the Tax Authority's official treaty list. Treaty relief, tax residence, permanent-establishment status, source allocation and foreign-tax credits depend on the specific treaty and facts. A reported Libya-Italy ratification completed in December 2025 still requires confirmation of its effective date and current text.